Threading the needle from ‘interoperability’ to ‘gatekeeping’: quest for a layered model

ABSTRACT

‘Interoperability’ means the ability for two different and independent information and communication technology (ICT) systems to exchange information and use that information. Whether or to what extent ICT interoperability needs to be regulated vis-a-vis the new technological challenges, poses a compelling question for the law and policy makers. Given this overarching question, this study first attempts to evaluate the issue from a multidisciplinary legal viewpoint and secondly examines the architectural settings of cloud computing and the Internet of Things (IoT). It is concluded that a layered regulatory model can respond to the ICT interdependent layers, as peculiarities of both the cloud and the IoT architectures are all-encompassed by such a model. It is also considered that a bottom-up, ex-ante and holistic approach developed under the layered regulatory model could address wide-ranging gatekeeping activities, responding not only competition concerns but also techno-social concerns, which constitute the main thread of ICT interoperability and accompanying problems. Finally, it is proposed this model can be transposed into the EU law, and to that end, it is suggested that the model replace the core measures of the electronic communications regulatory framework, along with a set of principles i.e. transparency, fairness, accountability and corresponding remedies.

KEY WORDS:

• Interoperability
• layering
• gatekeeping

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Scholarly there exist different definitions made so far. Among these, Sutor’s definition is notable which refers to ‘[t]he ability for two different and independent software applications to exchange information without loss of data, semantics or metadata’ (Sutor 2011, 215). One can also refer to Samuelson’s definition: ‘[t]he capability to communicate, execute programs, or transfer data among various functional units in a manner that requires the user to have little or no knowledge of the unique characteristics of those units’ (Samuelson 2009, 1946–1947). For the definition introduced by the Institute of Electrical and Electronics Engineers (IEEE) see IEEE Standards Glossary (2016).

2 See Software Directive, Arts. 5(3) and 6.

3 Competition law is widely invoked under the EU law so as to ensure interoperability, particularly where an abuse of dominance was found to have taken place or in case any kind of collaboration between the undertakings, i.e. vertical and horizontal agreements and concerted practices, is anti-competitive. Respectively, Articles 101 and 102 of the TFEU are relied on with regards to these cases, namely for the abuses of dominant position and anti-competitive agreements. Likewise, there might be a case denoting effective competition being significantly impeded because of a merger/acquisition, which can end up with interventions, i.e. rejection or clearing conditions, under EU Merger Regulation.

4 Interoperability based rules and remedies can be found under the 2018 European Electronic Communications Code (EECC) which constitutes the EU regulatory framework for electronic communications. For instance, Article 62(1) of the EECC imposes an interoperability obligation on broadcasters to ensure that technical services (e.g. conditional access) enabling ‘digitally-transmitted services to be received by viewers’ be given to all access seekers in a non-discriminatory way. Secondly, the interconnection obligation, which enables end-to-end connectivity as well as interoperable Europe-wide networks and services, is given special emphasis under various provisions e.g. Article 61(2) of the EECC. Thirdly, SMP undertakings might be subject to the obligations of ‘grant[ing] open access to technical interfaces, protocols or other key technologies that are indispensable for the interoperability of services or virtual network services’ and ‘prov[ision] of specific services needed to ensure interoperability of end-to-end services to users, or roaming on mobile networks’ according to the EECC (EECC, Art. 73/1(f, h)). While the first two obligations are envisaged for all the relevant undertakings regardless of their market powers, the last one is envisaged specifically for dominant operators.

5 Originally, many EU rules and principles are often based on or inspired of their US law counterparts such as some exceptional rights under IPR law, essential facilities doctrine under competition law or access obligations under sector-specific regulations. EU law and institutions, however, forge ahead by enacting newer remedies, e.g. right to data portability, net neutrality obligations which pose a widened legal response and measures. More clustered and detailed measures come up with certain challenges of fragmentation as well as risk of false positives. From this point of view, not only is a multi-disciplinary field of research possible but also revisiting of the regulatory frontiers is better enabled on wider contours of the EU system.

6 The internet layers and governing protocols i.e. developed under Open Systems Interconnection (OSI) or TCP/IP stacks lay the ground for development of the ‘layering theory’, which generally means adapting the IP layers to policy and regulatory approaches. The vital role of the protocol layering within the IP ecosystem came to the fore in the late 1990s and had a remarkable influence on the literature with regards to the reconstructing of the regulatory policies.

7 In a layered model, where the layers are to be dealt with on a regulatory basis, ‘gatekeeping’ emerges as another key concept. While the abovementioned layers provide the necessary layout for ex ante regulation, the ‘gatekeeping’ refers to the activities that capture ‘competition’ and ‘techno-social’ concerns which need to be addressed within the layered regulatory model.

8 ‘Techno-social’ is one of the key attributes used in this study inspired by the work of Frischmann, and Selinger who authored a book called ‘Re-Engineering Humanity’. In their book, they define and frequently refer to the term of ‘techno-social engineering’. According to their definition, techno-social engineering refers to ‘processes where technologies and social forces align and impact how we think, perceive and act’ (Frischmann and Selinger 2018, 4–5). Based on this definition, the ‘techno-social concerns’ is conceptualized to mean the concerns mostly manifested in algorithmic/AI-driven software that manipulates online users affecting their behaviours and choices leading up to unfair outcomes and/or transformative effects.

9 The legal definition of a TPM is given under Article 6(3) of the Directive 2001/29/EC (InfoSoc Directive 2001) which basically states that a TPM is any technology (software or hardware) which restricts access to a copyrighted material without the consent of the copyright holder.

10 Software Directive, Art 6(1).

11 SAS v WPL judgement para 39.

12 In the following period, while SAS has succeeded with their claims as to breach of contract based on the original contract terms under the local state (North Carolina) law, their subsequent attempt for extraterritorial enforcement orders to compel WPL to make payments from England failed. Regarding the recent Court of Appeal’s decision (anti-suit injunction) to block US extraterritorial enforcement measures, see SAS Institute Inc v World Programming Limited (2020) EWCA Civ 599.

13 See Vezzoso (2012, 159) reading; ‘ … [t]he functional character of APIs, being even stronger than with computer programs in general, would very often place them well below the originality threshold, and the general support in favour of interoperability expressed by the Software Directive could possibly present a further counterargument [against copyrightability of interfaces]’.

14 See Otero (2015, 86) reading; ‘Since a computer program’s form of expression is functional, variations of its expression will not matter because these possible variations come from utility reasons and not the ’aesthetic freedom’ or whim of its developer. Therefore, expression and function merge. … ’.

15 Regarding the latter issue of free flow of information, see Elkin-Koren (2002, 79–106) where it is argued that ‘control rather than remuneration becomes the focus of legal disputes concerning copyright’ (Elkin-Koren 2002, 84) and ‘this transforms copyright law from a law that sought to serve policy goals and secure incentives for creators into a law that facilitates control in information markets’ (Elkin-Koren 2002, 106).

16 Boyle (2008, 46); Lessig (2006, 186).

17 Case COMP/C-3/37.792 - Microsoft [2004] OJ L 32/23 (‘Commission’s Microsoft decision’), upheld in Case T-201/04 Microsoft v Commission [2007] ECR II-3601 (‘GC’s Microsoft judgement’).

18 Commission’s Guidance para 81.

19 The DMA Proposal includes a set of ex-ante prohibitions as well as a ‘market investigation tool’ to ensure competition and increase market contestability across the digital platforms. Once an undertaking is designated gatekeeper within the meaning of the DMA, then that particular gatekeeper will be subject to certain prohibitions and obligations as enshrined under Articles 5 and 6. Under this framework are existing certain proposed measures in order to enhance access and interoperability, such as ‘allow[ing] business users and providers of ancillary services access to and interoperability with the same operating system, hardware or software features that are available or used in the provision by the gatekeeper of any ancillary services’ (DMA Proposal, Art 6(f)).

20 EECC, Art 62(1).

21 Operators not enjoying significant market power (SMP) being covered by this obligation signifies the key role attributed to the CASs under the EECC, which explicitly acknowledges ‘Competition rules alone may not be sufficient to ensure cultural diversity and media pluralism in the area of digital television’ (Preface EECC, Recital 159).

22 EU Net Neutrality Regulation, Art 3(3).

23 For similar views see (Maniadaki 2019, 485–488; Audibert and Murray 2016, 126–132).

24 Crucially, policy objectives of the ECRF have also been expanded with the enactment of the EECC, which stipulates that the competent authorities e.g. NRAs and the Commission, shall:

1. promote connectivity and access to, and take-up of, very high capacity networks,

2. promote competition in the provision of electronic communications networks and associated facilities,

3. contribute to the development of the internal market and

4. promote the interests of the citizens of the Union (EECC, Art 3(2)).

25 Article 67 of the EECC sets out the procedure for ‘market analysis’, involving market definition, SMP assessment and selection of remedies. A few interoperability related remedies, as envisaged under the Article 73(1) of the EECC, can be imposed on SMP undertakings should there exist potential market failures that require ex ante intervention as per Article 67 of the same Directive (EECC).

26 According to Cisco’s forecast for the period of 2016 to 2021, global cloud IP traffic will account for 95% of total data center traffic by 2021 and will be more than triple (3.3-fold) over the next 5 years with a 27% increase rate (CAGR) (Cisco 2018). Furthermore, 94% of workloads and compute instances will be processed by cloud data centres, whereas 6% will be processed by traditional data centres, according to the same forecast for the given period (Cisco 2018).

27 This could be extended to the broader industrial settings like the ‘connected (smart) home’ market which includes not only connected appliances but also automated lighting, HVAC (heating, ventilation and air conditioning), entertainment and security (Porter and Heppelmann 2014). In the broadest setting, which could be described as a hyper-connected marketplace, smart homes and the integrated devices, appliances, etc. are supposed to be interoperable with the smart cars, smart city components, etc.

28 See (Sehgal, Patrick and Rajpoot 2014, 711–712; De la Guía, Lozano, and Penichet 2013; Hwang, Fox and Dongarra 2012, 579).

29 The internet is standardized by the Internet Engineering Task Force (IETF), based on the TCP/IP stack, or simply saying IP stack, which relies on a unique ‘protocol layering’. The ‘TCP’ part of the TCP/IP stack governs the assembly and reassembly of the data at each end, including checking for errors such as missing data, whereas the ‘IP’ part is responsible for routing data from one node to another. These elements of the internet enable a computer in one corner of the world to find a different computer in another corner of the world and exchange information that can be understood by the applications software loaded onto the computers at each end of the transmission (Nuechterlein and Weiser 2013, 167).

30 IP stack laid the ground for development of the ‘layering theory’, which generally means adapting the IP layers to policy and regulatory approaches. Particularly in the USA, layering theory was found to pave the way for an environment whereby regulatory rules against distinct networks, e.g. cable, the PSTN and services, for example VoIP and voice telephony, were to be filtered on the basis of convergence across the internet layers (TCP/IP) on a technologically neutral basis. See (Kariyawasam 2007, 87–117; Kariyawasam 2005, 587; Werbach 2005, 66–67; Werbach 2002, 39–54; Whitt 2003, 587–672; Mindel and Sicker 2006, 136–148; Sicker and Mindel 2002, 69–94).

31 It appears that the locus where demand and supply meet is increasingly moving from the legacy telecommunications networks (lower layers) to ‘digital platforms’ or broadly speaking, upper layers. While IP convergence functions as the catalyst of both the demand and supply of ICT networks and services, minimized regulatory pressure over the supply of the upper layers could be said to have contributed to the so-called shift. Along the same lines, it could be advanced the upper-layer companies have utilized the regulatory forbearance maximizing the benefits to be reaped from the IP convergence so far.

32 Notably, against the ever fast changing ICT dynamics including the shifting locus mentioned above, the users are increasingly exposed to the techno-social problems, which do not necessarily have any competition dimension.

33 See (Helbing 2018, 47–72; Royakkers, Timmer, Kool and Van Est 2018, 127–114).

34 According to Barzilai-Nahon (2008) network gatekeeping is best conceptualized through information control lenses, and carries three main goals: (a) a ‘locking-in’ of gated inside the gatekeeper’s network; (b) protecting norms, information, gated and communities from unwanted entry from outside and (c) maintaining ongoing activities within network boundaries without disturbances (Barzilai-Nahon 2008, 1496).

35 The mechanisms include, for example, channelling i.e. search engines, hyperlinks; censorship i.e. filtering, blocking, zoning; security i.e. authentication controls, integrity controls and access controls; value-adding i.e. contextualization, customization, personalization; infrastructure i.e. network access, network configuration; user interaction i.e. add-on, navigation tools; editorial mechanisms i.e. technical controls, content controls, design tools of information content (Barzilai-Nahon 2008).

36 The EU Commission seeks to identify a number of ‘gatekeepers’ that provide ‘core platform services’, which are defined within Article 2(2) of the DMA Proposal. Once an undertaking is designated gatekeeper within the meaning of the DMA, then that particular gatekeeper will be subject to certain prohibitions and potential obligations. See also supra note 35. While the enshrined obligations are mostly competition oriented, other objectives can also be derived from the Proposal, which sets out the following aims for regulation of the core platform services:

1. addressing market failures to ensure contestable and competitive digital markets for increased innovation and consumer choice,

2. addressing gatekeepers’ unfair conduct and

3. enhancing coherence and legal certainty in the online platform environment for a preserved internal market (DMA Proposal 2020, 58).

37 See Yeung (2019, 21–48); Scantamburlo, Charlesworth and Cristianini (2019, 49–81); Olhede and Wolfe (2018).

38 Google’s discriminatory ranking in online shopping comparison services, is an exemplary case for such subtle and exclusionary behaviours, driven by AI and data based manipulation. Following a 7-year investigation process, in June 2017, Google was fined 2.4 billion EUR for abusing its dominant position in the ‘online search’ market, to hamper the competition ‘online shopping comparison’ market during the years between 2008 and 2013. Google thereby was ordered by the Commission to ensure ‘equal terms’ for all competitors in the online shopping comparison market based on the fact that they favoured their own services with the result being restricting the users’ freedom to choose among the available options. (See European Commission Press release, 2017).

39 Platforms’ exclusionary behaviours would have far-reaching impact on the app providers and their services. Apple’s exclusion of the ‘Drone +’ application from its app store and exclusion of ‘Disconnect’ from Google Play illustrate this (Belli and Zingales 2017, 88–91). In the former instance, Apple rejecting an app providing real-time alerts of drone strikes, called ‘Drone+’, to be placed in its app store, was the conflict between the parties. The app provider was given two reasons for this rejection, respectively for it was ‘not useful’ and on the ground that it was ‘objectionable and crude’. While not clear-cut unlike with the former, Google’s rejection of Disconnect, a privacy enhancing technology app provider, implicates an allegedly unfair discrimination among the software provided by them and Google’s subsidiary. While in the first instance is exemplified a platform’s arbitrary reasoning for an exclusion, the latter instance would potentially be representative of an unfair discrimination in favour of a platform’s own software also creating a competitive advantage for himself.

40 See Dredge (2014); Usher-Layser (2016, 18–21).

41 It could be argued that even in the presence of data protection tools and safeguards, the transformative effects at stake could not be mitigated easily for the persistent nature of the gatekeeping activity that reach out to individuals’ dignity. While the individuals grant their consent as an autonomous/independent person, this does not deter the possibility that the unfairly selective content being reached to themselves through the underlying algorithms.

42 See Lynskey (2017, 10); Edwards (2018, 66).

43 Conversely, such upper-layer activities reach out to the consumers in ways they would hardly realize, like in the way they would be captured via personalized recommendations, prices, customized products, etc. Likewise, individuals’ participation on the social media and other information platforms could be captured and affected by the diverse gatekeeping roles and functionalities that are driven by AI and related algorithms. In the end, ‘consumer welfare’ seems unharmed, whereas the access and interoperability channels get restricted and the consumers’ dignity and autonomy affected. See also Van Dijck, Nieborg and Poell (2019, 4).

44 Partly inspired by Easley, Guo and Kraemer (2017, 26).