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Abstract
EU State aid law has sought to enable people with disabilities to obtain employment, yet has not been explicitly included in the toolbox of policy options to improve the availability and choice of accessible technology within the EU Internal market. This seems to be the consequence of an inherent bias against State intervention in the market, which is mostly unwelcome since it can limit open and free competition. This also reiterates the ‘less-aid’ policy and the purely economic approach to State aid professed by the European Commission. Against this background, this article discusses the potential for EU State aid policy to foster both ‘design for all’ and innovative assistive devices for people with disabilities. It seeks to argue that the goal of an EU-wide market of accessible technology can be achieved using EU State aid law. In particular, this article aims to highlight that a more targeted use of EU State aid law can lead developers to increase the production of accessible goods, to adjust or reduce prices and to provide consumers with a greater degree of choice in a greater number of marketplaces. Whilst it adopts a legal approach, this analysis relies inter alia on economic evidence and recalls the pamphlet recently published by Mazzuccato, from which the title of this work has drawn inspiration.
Acknowledgement
This article is part of an ongoing research into the implementation of the UN Convention on the Rights of Persons with Disabilities in the European Union. It builds upon the research conducted when I was ‘Lead researcher’ of the Work Package 7 of the EU-funded project DISCIT on ‘Active Citizenship Through the Use of New Technologies’ (www.discit.eu), and on a previous article published in European State Aid Law Quarterly. This article is one of the outcomes of DISCIT. I am grateful to anonymous reviewers for their insightful comments, and to Mr Charles O'Sullivan and to Anthony Giannoumis for their valuable support.
Conflict of interest disclosure
No potential conflict of interest was reported by the author.
Notes
1. The Treaty on the functioning of the European Union (TFEU) clarifies the division of competences between the EU and Member States. It distinguishes among three main types of competence: exclusive competences, shared competences and supporting competences. The TFEU draws up a non-exhaustive list of the fields concerned in each case. In fields under the exclusive competences (Article 3 of the TFEU), the EU alone is able to legislate and adopt binding acts in these fields. The Member States’ role is therefore limited to applying these acts, unless the Union authorizes them to adopt certain acts themselves. In areas that correspond to shared competences (Article 4 of the TFEU), the EU and Member States are authorized to adopt binding acts in these fields. However, Member States may exercise their competence only in so far as the EU has not exercised, or has decided not to exercise, its own competence. When the EU is given a supporting competence (Article 6 of the TFEU), it can only intervene to support, coordinate or complement the action of Member States. Consequently, it has no legislative power in these fields and may not interfere in the exercise of these competences reserved for Member States (Ex multis Rossi Citation2012 and Tridimas Citation2012).
2. Council Decision 2010/48/EC, OJ 2010 L 23/35. The Council decision to accede to the UNCRPD (see ft. 6) is accompanied by an Annex (Annex II) containing a Declaration of Competence, in compliance with Art. 44(1) UNCRPD. The following matters are declared to be within the exclusive competence of the Union: State aid with respect to both the common market and the Common Customs Tariff and matters affecting its own public administration (e.g., recruitment of staff, etc). The Declaration clarifies that competence is shared between the EU and its Member States with respect to non-discrimination, the free movement of goods, persons, services and capital, agriculture, transport by rail, road, sea and air, taxation, internal market, equal pay for men and women, trans-European network policy and statistics. A list of policy fields (in which the EU can exercise supporting competences) includes vocational training and social cohesion. An Appendix, attached to the Declaration, lists an illustrative set of legislative measures in which Union competence is engaged (at least to some extent) in broad fields such as accessibility, independent living, social inclusion, work and employment, personal mobility, access to information, statistics and data collection and international cooperation
3. Communication from the Commission ‘European Disability Strategy 2010–2020: A Renewed Commitment to a Barrier-Free Europe’ of 15 November 2010, SEC(2010) 1324 final. The Commission drafted a Commission Staff Working Document to accompany the Strategy. This document outlined the initial plan to implement the EDS 2010-2020 and contained a list of actions foreseen for the period 2010–2015 (SEC (2010) 1324 final).
4. See supra nt. 2.
5. See also Commission Staff Working Document ‘Report on the implementation of the UN Convention on the Rights of Persons with Disabilities by the European Union’ of 5 June 2014, SWD(2014) 182 final.
6. AAL refers to ubiquitous computing and sensing, ubiquitous communication, and intelligent user interfaces.
7. The Strategy refers to ‘Design for all’. In this article, this term is used as a synonym of universal design (UD). Both these terms will be used interchangeably. The origins of Universal Design date back to the early 1950s. Because of the high number of veterans of the Second World War, the public had slowly developed an interest in the needs of disabled people (Gassmann and Reepmeyer Citation2008). The theorization of ‘universal design’ started later, namely in 1997, when a group of architects, led by Ronald Mace, laid down the seven rules of universal design: equitable use, flexibility in use, simple and intuitive use, perceptible information, tolerance for error, low physical effort, and size and space for approach and use. This means that the design must be useful and marketable to people with diverse abilities and the same means of use are to be provided for all users. The design must accommodate a wide range of individual preferences and abilities. The use of the design must be easy to understand, regardless of the user's experience, knowledge, language skills, or current concentration level, and must provide necessary information effectively to the user, regardless of ambient conditions or the user's sensory abilities. The design must minimize hazards and adverse consequences of accidental or unintended actions, and can be used efficiently and comfortably and with a minimum of fatigue. The seventh principle alludes to the fact that appropriate size and space is provided for approach, reach, manipulation, and use regardless of user's body size, posture or mobility. Article 2 UNCRPD provides a legal definition of universal design, which constitutes a firm point of reference. This provision states that ‘universal design’ is ‘the design of products, environments, programmes and services to be usable by all people, to the greatest extent possible, without the need for adaptation or specialized design’.
8. See Ferri, Giannoumis, and O'Sullivan (Citation2015). See infra Section 2 of this article.
9. Standards are technical specifications defining requirements for products, production processes, services or test-methods (Borraz Citation2007; Lemley Citation2002). They are generally selected by Standard-Setting Organizations (SSOs), i.e. industry groups that typically consist of participants in an industry who have expertise in the technologies and products at issue, and evaluate technologies, products, or methodologies. European Standards are under the responsibility of the European Standardisation Organisations (CEN, CENELEC, ETSI) and can be used to support EU legislation and policies. See http://ec.europa.eu/growth/single-market/european-standards/index_en.htm (last accessed 1 April 2015).
10. Art. 3 TFEU.
11. See supra nt. 3.
12. Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty OJ 2014 L 187/1.
13. Commission Regulation (EC) No 800/2008 of 6 August 2008 declaring certain categories of aid compatible with the common market in application of Articles 87 and 88 of the Treaty – General Block Exemption Regulation OJ 2008 L214/3 (amended by Commission Regulation (EU) No 1224/2013 of 29 November 2013 amending Regulation (EC) No 800/2008 as regards its period of application OJ 2013 L320/2).
14. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions COM (2012) 209, 8.5.2012 (Communication on State Aid Modernisation).
15. Community framework for State aid for research and development and innovation, OJ 2006 C 323/1.
16. Community guidelines on State aid to promote risk capital investments in small and medium-sized enterprises OJ 2006 C 194/2.
17. Communication from the Commission – Framework for State aid for research and development and innovation OJ 2014 C 198/1.
18. Guidelines on risk finance aid for 2014-2020 OJ 2014 C19/4.
19. Article 107(2) TFEU lists aid that: (a) has a social character and is granted to individual consumers, provided that such aid is granted without discrimination as regards the origin of the products; or (b) makes good the damage caused by natural disasters or exceptional occurrences. It also mentions at letter (c): ‘aid granted to the economy of certain areas of the Federal Republic of Germany affected by the division of Germany, in so far as such aid is required in order to compensate for the economic disadvantages caused by that division’. This exemption is of limited practical relevance, and indeed it is now about to be ex lege repealed.
20. Article 107(3) TFEU also mentions (d) aid to promote culture and heritage conservation where such aid does not affect trading conditions and competition in the EU to an extent that is contrary to the common interest, and provides that other categories of aid may be included in a decision of the Council on the proposal of the Commission.
21. Case 730/79, Philip Morris, [1980] ECR 2671.
22. Ex multis Case T–17/03 Schmitz-Gotha Fahrzeugwerke v Commission [2006] ECR II–1139, paragraph 41, and Joined Cases T–267/08 and T–279/08 Région Nord-Pas-de-Calais and Communauté d'agglomération du Douaisis v Commission [2011] ECR II–1999 ; Case T–319/11, ABN Amro Group NV v Commission 8 April 2014 (not yet published).
23. In the specific area of State aid, the Commission is bound by the guidelines and communications that it adopts, in so far as they do not depart from the rules in the Treaty and are accepted by the Member States. See inter alia Joined Cases T–267/08 and T–279/08 Région Nord-Pas-de-Calais and Communauté d'agglomération du Douaisis v Commission [2011] ECR II–1999, paragraphs 129 and 132.
24. Risk capital is a broad concept that includes a growing number of types of investment. In the EU legal order, it has been defined as ‘equity and quasi-equity financing to companies during their early-growth stages (seed, start-up and expansion phases), including informal investment by business angels, venture capital and alternative stock markets specialized in SMEs including high-growth companies (hereafter referred to as investment vehicles)
25. Commission Staff Working Document Impact Assessment Accompanying the Communication From The Commission ‘Framework for state aid for research and development and innovation’ SWD (2014) 163 http://ec.europa.eu/smart-regulation/impact/ia_carried_out/docs/ia_2014/swd_2014_0163_en.pdf (last accessed 15 April 2015).
26. Council Regulation (EC) No 994/98 of 7 May 1998 on the application of Articles 92 and 93 EC [now Articles 107 and 108 TFEU respectively] to certain categories of horizontal State aid OJ 1998 L142/1.
27. After 1998, following the Enabling Regulation, the Commission adopted several regulations that provide for certain exemptions. In 2006, the Commission adopted the De minimis Regulation, recently replaced by a new regulation. Measures that fulfil the criteria of the De minimis do not constitute ‘state aid’ and therefore do not need to be notified to the Commission for approval. See Commission Regulation (EC) No. 1998/2006 of 15 December 2006 on the application of Articles 87 and 88 of the Treaty to de minimis aid, OJ 2006 L 379/5. Commission Regulation (EC) No. 1407/2013 of 18 December 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid, OJ 2013 L 352/1.
28. Commission Regulations (EC) 68/2001 OJ 2001 L10/20, 70/2001 OJ 2001 L10/33, 2204/2001 OJ 2001 L337/3, and 1628/2006 OJ 2006 L32/29.
29. Se supra nt. 15. For a general account of the GBER see (Nicolaides Citation2014).
30. The aid must be transparent in the meaning of the GBER. Recital 20 of the GBER states that ‘Transparent aid is aid for which it is possible to calculate precisely the gross grant equivalent ex ante without a need to undertake a risk assessment’, and Art. 5 lists categories of aid that are transparent as such (e.g. aid comprised in loans, aid comprised in fiscal measures). Aid granted under the GBER must be under the thresholds laid down in Art. 6. In this regard, it has been widely acknowledged that the ceilings have also been substantially raised as compared with the existing ones, implying that individual aid of larger amounts may be provided without preliminary notification to the Commission. This Regulation exempts only aid that has an incentive effect (Art. 8 GBER).
31. http://ec.europa.eu/competition/state_aid/modernisation/rdi_framework_faq_en.pdf (last accessed 15 April 2015).
32. Para. 12 of the Communication on State aid Modernisation.
33. Defining the relevant market means determining the scope of the competition rules in respect of restrictive practices and abuses of a dominant position, as well as the scope of the merger regulations. The definition is less relevant in the context of State aid, although the notion of market is still necessary to understand the distortive potential of the State intervention.
34. Commission Notice on the definition of relevant market for the purposes of Community competition law OJ 1997 C 372/5.
35. ‘Removing Obstacles for the Disabled', Policy Brief of European Commission – DG Justice available at http://ec.europa.eu/justice/citizen/document/files/disabled_en.pdf (last accessed 15 April 2015).
36. See the projects listed in the DISCIT 7.1 deliverable, available at http://discit.eu/publications (last accessed 15 April 2015).
37. Parker, a coordinator of ASTERICS, an EU funded project, explains: ‘What I would call the “old” AT-market is dominated by isolated applications and devices, each addressing a specific disability or focusing on a specific ability of the user. This is in principle good, since it means that each device can be brilliantly optimised in its functionality’. See at: http://ec.europa.eu/digital-agenda/en/news/adaptive-assistive-technologies-people-disabilities (last accessed 15 April 2015).
38. Several studies on the use of AT at home have shown that one-third are abandoned early and lie unused (Scherer and Galvin Citation1996; Kittel et al. Citation2002; Scherer Citation2005) because these devices are not ‘consumer friendly’, and are not easy to use. An investigation conducted in the US has confirmed that people with disabilities require ‘improved design for compatibility, durability, and customizability’ and advocates for ‘consumer input during market research, product design, and product testing’ (Lenker et al. Citation2013). Interestingly, the participants in this research study articulated concerns about product usability, as well as ideas for new product features: ‘Need a screen that doesn't wash out in sunlight’; ‘GPS built into chair for location in emergency’ … ‘Make cell phone electronics compatible with wheelchair controls’ (Lenker et al. Citation2013).
39. See at http://www.atis4all.eu/default.aspx (last accessed 15 April 2015).
40. A study conducted in Germany with regards to assistive devices for people with ASL shows that, outside of other bureaucratic problems, public financing covers only low prices assistive devices (Henschke Citation2012).
41. For example, Caccamo and others (2014) observe that, especially in developing (or low income) countries, normal hearing aids are expensive and consequently out of reach to disadvantaged populations. The average price of high quality hearing aids ranges between $1000 and $6000, therefore limiting the availability and access for many even in developed countries (Caccamo et al. Citation2014).
42. The iPhone and the android operating system are opposite examples. The same with Windows and even iOS. All were initially inaccessible and have become more accessible.
43. In this article, innovation is conceived, in line with the Community framework for State aid for research and development and innovation, OJ 2006 C 323/1, as ‘related to a process connecting knowledge and technology with the exploitation of market opportunities for new or improved products, services and business processes compared to those already available on the common market, and encompassing a certain degree of risk'. Product innovation is referred to changes to the products themselves, encompassing the creation of new products or the improvement of existing products.
44. The valley of death describes the point at which a business has a working prototype for a product or service that has not yet been developed enough to earn money through commercial sales (Ford, Koutsky, and Spitwak Citation2007).
45. Article 114 TFEU confers to EU the power to adopt legislation which has as its object the establishment and functioning of the internal market. Up to now, Article 114 has provided the legal basis for a number of instruments (Waddington Citation2009, Citation2013). Declaration No. 22 to the Treaty of Amsterdam stipulates that in drawing up measures under what is now Article 114, ‘the institutions of the [EU] shall take account of the needs of persons with a disability.’ The rationale behind many accessibility-related legislations adopted under Article 114 TFEU is the elimination of barriers in the Internal market and harmonization of standards of goods and services offered in the EU (Waddington Citation2009). As the Court of Justice has consistently held that to justify recourse to Article 114 TFEU as legal basis what matters is that the measure adopted on that basis must actually be intended to improve the conditions for the establishment and functioning of the internal market (Case C-376/98, Germany v. Parliament and Council, [2000] ECR I-8419; Case C-380/03 Germany v. European Parliament and Council, [2006] ECR I-11573). Certainly, the Treaty intends to confer on the legislature a discretion in selecting the method of harmonization (minimum or maximum) most appropriate for achieving the desired result (Weatherill Citation2011).
46. http://ec.europa.eu/smart-regulation/impact/planned_ia/docs/2012_just_025_european_accessibiliy_act_en.pdf (last accessed 30 April 2015).
47. COM (2008) 426. On the proposal see Waddington (Citation2011b).
48. See infra Section 4. See also Draft Commission Notice on the notion of State aid pursuant to Article 107(1) TFEU, available at http://ec.europa.eu/competition/consultations/2014_state_aid_notion/draft_guidance_en.pdf (last accessed 30 April 2015).
49. Amongst others, see Veritas project, available http://veritas-project.eu/index.html (last accessed 30 April 2015).
50. Key enabling technologies (KETs) encompass micro-/nanoelectronics, nanotechnology, photonics, advanced materials, industrial biotechnology and advanced manufacturing technologies (which are relevant in developing accessible technology). Communication from the Commission ‘A European strategy for Key Enabling Technologies – A bridge to growth and jobs’ of 26 June 2012, COM(2012) 341 final.
51. Commission Communication Europe 2020 – A strategy for smart, sustainable and inclusive growth, of 3 October 2010, COM(2010) 2020 final.
52. Communication from the Commission Europe 2020 – Flagship Initiative Innovation Union, of 6 October 2010, COM(2010) 546 final.
53. Communication from the Commission ‘Taking forward the Strategic Implementation Plan of the European Innovation Partnership on Active and Healthy Ageing’, of 29 February 2012, COM (2012) 083 final.
54. Communication from the Commission, Proposal for a Decision on the participation of the Union in the Active and Assisted Living Research and Development Programme jointly undertaken by several Member States, of 10. July 2013, COM(2013) 500 final. The AAL JP was created by 20 EU Member States and three associated countries in 2008. The EU decided to match participating countries’ support with funding from the 7th Framework Programme for Research and Technological Development (FP7), based on Article 185 TFEU.
55. In this article, we limit ourselves to note that, despite the commitment towards transparency and inclusiveness adopted by the Commission in its communication ‘A strategic vision for European Standards’ and in the Regulation (EU) No 1025/2012, the capacity of the European standardization process to produce widely accepted and legitimate standards is questioned (Werle and Iversen Citation2006). As stated in Regulation (EU) No 1025/2012, OJ 2012 L 316/12 SSOs ‘are subject to competition law to the extent that they can be considered to be an undertaking or an association of undertakings within the meaning of Articles 101 and 102 TFEU’. With the Guidelines on the application of former Article 81 EC (now, of course, Article 101 TFEU), and then in 2011, with their revised version (‘2011 Guidelines’), the Commission provided guidance on standard setting and laid down its general policy toward technological standardization: see Communication from the Commission ‘Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements’, OJ 2011 C 11/1. The ‘2011 Guidelines’ set out possible restrictive effects that standard-setting agreements can give rise to. In addition, they explicitly refer to the creation of barriers to entry and foreclosure concerns, and to the problem of patent hold-up. Whilst accessibility standards are more ‘coordinative standards’, it is surprising that the Commission did not refer to possible restraints to competition in this context.
56. The Framework also details the boundaries of the Commission's margin of appreciation to approve R&D aid under Article 107(3)(b) TFEU (i.e. aid for important projects of common European interest). These rules and their application are however out of the scope of this analysis (von Wendland 2012).
57. Para 6 of the 2006 R&D&I Framework.
58. R&D-aid approved under the Framework was granted to different sectors. Several aid measures favoured microelectronics and to a lesser extent ICT-sector. See: Commission Staff Working Paper ‘Mid-Term Review of the R&D&I Framework’ of 10 August 2011.
59. Commission Staff Working Paper ‘Mid-Term Review of the R&D&I Framework’ of 10 August 2011.
60. State aid No N 114/2008 – Germany ‘Guidelines on the granting of aid for research, innovation and technology of the Land of North Rhine-Westphalia’ OJ 2008 C 256.
61. State aid N 193/2008 – Spain – Aid scheme supporting the realisation of projects of technological development and innovation in the Basque region (programme INNOTEK) OJ 2008 C/253.
62. State aid N 188/2008 – Spain Spanish national Research, development and innovation scheme OJ 2008 C/238.
63. State aid: Commission approves €400 million aid to STMicroelectronics for the Nano2017 research programme, Press release IP/14/733 of 25 June 2014.
64. State aid N 406/2009 – Germany (Free State of Bavaria) – Risk Capital Scheme ´Clusterfonds Seed GmbH & Co. KG OJ 2010 C158. See also the letter of the Commission of 12.05.2010, K(2010)2979 final.
65. Aid measure N 756/2007 – Spain – Risk capital measure INVERTEC 2009- 2011 OJ 2009 C108.
66. State aid SA.32520 (2011/N) – Germany Risk Capital Scheme ´High-Tech Gründerfonds II, OJ 2012 C70.
67. See http://www.en.high-tech-gruenderfonds.de/2014/03/fresh-capital-for-desino/ (last accessed 30 April 2015).
68. See at http://www.finsmes.com/2013/08/exelonix-raised-funding-high-tech-gruenderfonds.html (last accessed 30 April 2015).
69. State aid N 263/2007 – Germany (Saxony) – Saxon Early Stage Fund (Technology Founder Fund Saxony) OJ 2008 C93.
70. Recital 20 of the GBER stated that ‘Transparent aid is aid for which it is possible to calculate precisely the gross grant equivalent ex ante without a need to undertake a risk assessment’, and Article 5 lists categories of aid which are transparent as such (e.g. aid comprised in loans, aid comprised in fiscal measures).
71. In the case of investment funds targeting exclusively SMEs located in assisted areas, at least 30% of the funding was to be provided by private investors.
72. Article 31(4) GBER.
73. SA.32588 Oberösterreichischer Hightechfonds OJ 2011 C110.
74. X77/2010 Fondo Nazionale per l'Innovazione - Capitale di rischio OJ 2010 C75.
75. SA.36232 Förderprogramm "Hochtechnologien für das 21. Jahrhundert OJ 2013 C 213.
76. See http://www.forschungsstiftung.de/index.php/Antragstellung/Foerderrichtlinien.html (last accessed 30 April 2015).
77. The scope of measures that no longer need to be notified to the Commission for prior approval has been widened under the new GBER.
78. State aid: Commission adopts new rules facilitating public support for research, development and innovation; European Commission – IP/14/586 of 21 May 2014.
79. See: Answer of industriAll Europe to the consultation by the Commission on State Aid for Research, Development & Innovation (R&D&I), available http://ec.europa.eu/competition/consultations/2013_state_aid_rdi/index_en.html (last accessed 15 April 2015)
80. Article 3(3) TEU.
81. In compliance with Art. 44 UNCRPD, the final decision on the conclusion of the Convention contains a Declaration of competence, specifying which areas of the agreement fall within the competence of the EU and which fall within that of its Member States, or are of shared competence between them.
82. Among the new categories there are also: aid schemes to make good the damage caused by natural disasters, social aid for transport residents of remote regions, aid for broadband infrastructure, aid for culture and heritage conservation, including aid schemes for audio-visual works, aid for sport and multifunctional recreational infrastructures, investment aid for local infrastructure.