On Tuesday, 27. April 2021 a special workshop about competition law and digital technology was hosted by Faculty of Law, Palacký University in Olomouc. The workshop was opened by associate professor Michal Petr, Head of the Department of International and European Law, who provided moderation of the event and associate professor Naděžda Šišková, chief coordinator of the Jean Monnet Network and head of Jean Monnet Centre of Excellence. She welcomed participants and introduced valuable guests including Petr Mlsna – Head of the Office for the Protection of Competition. She have noted, that the workshop was organized by Jean Monnet Centre of Excellence in EU Law, in close coordination with the faculty, the Office for the Protection of Competition (Czech Republic) and Czech Association of European Studies. The event was organised within the implementation of the Jean Monnet Network „European Union and the Challenges of Modern Society (Legal Issues of Digitalization, Robotization, Cyber Security and Prevention of Hybrid Threats), bringing together leading European institutions including University of Heidelberg (Germany), Tallin University of Technology (Estonia), Taras Shevchenko National University of Kiev (Ukraine) and Comenius University in Bratislava (Slovakia) together with hosting institution – Palacký University in Olomouc – main coordinator of the project.
Associate professor Šišková highlighted the scope of the project, including topics such as legal problems of digital single market, competition law, legal aspects of robotization including correlation with basic rights, GDPR and privacy protection and specifics of the study in the digital age. Moreover, she highlighted several other events (which are available on this site) including the workshop “Balancing Cybersecurity and Privacy”, “the Roundtable about European Consumers” or the debate with the members of the European Parliament about the future of robotization and digitalization in the EU. There was also debate with Jan Passer about “Right to be forgotten”. Some words were dedicated also to future activities, namely large conference prepared with Tallin University of Technology, which will deal with the issues of digital single market and will take place between 20 and 21 May 2021. Also, other events are planned, including conference in Kiev next year, which will be dedicated to the cybersecurity and prevention of hybrid threats. There will be also workshop in Karlovy Vary about learning approaches in the digital age and finally, there will be conference in cooperation with Ministry of Foreign Affairs with the title “EU and Challenges of Modern Society”. The project will be finished by publication of joint monograph where all participating subjects will contribute.
During the opening statement associate professor Šišková highlighted the fact, that we are lining at the times when digital technology will form modern societies including the legal order. The date of the workshop comes at the time when new law is being created by the EU institutions. As of 21 April 2021 European Commission introduced the proposal of the rules aimed at the use of the Artificial Intelligence. Moreover, four months ago European Commission presented another two important proposals: the Act on digital services and the Act on digital markets – two important tools limiting misconduct in this area, including digital platforms and so called “digital guardians”. European Commission in its Communication “Shaping Europe’s Digital Future” provided very complex ideas about how to deal with the challenges in the digital sphere: single digital market, EU as the global leader, trustworthy AI, digital skills or the European Data Strategy. Docent Šišková appreciated, that to some degree our project was in advance, because it was submitted in 2018 and its objectives fully match with the published materials of the European Commission.
Following word was given to Petr Mlsna – Head of the Office for the Protection of Competition who spoke about the competition law and the digital society. Mr. Mlsna developed the context of the EU proposals including the Digital Market Act and highlighted its innovative approach in the terms of regulation. Despite competition regulation is usually made ex post, with its proposal European Commission provided ex ante regulatory tool. The attitude is more typical for telecommunications or energy to stimulate various forms of competition. The proposal itself is aimed at internet “giants” such as Google or Facebook which are dominating also digital market in Europe. The dominance of these American companies is preventing development of commerce including browsers, price comparisons and many others.
However, according to Mlsna creating ex ante tool is not genuine solution. In his personal case the draft led to more questions than provided answers. First, the relationship between ex ante regulation and ex post regulation is not resolved, regarding potential violation according to the article 102 SFEU, when the European practice used by “gate keepers” will be evaluated by some intra-state competition authorities as the misuse of dominant position. There is no answer provided within regulation. Here we are touching ne bis in idem principle when ex ante regulation is allowing something and then actors are punished according to the ex post regulation. Second issue is the compensation for the damage which is still open in the Digital Market Act whether the authority may according to ex ante regulation claim compensation for caused damage. Mr. Mlsna is of the opinion, that without explicit regulation this is not the case.
Third issue, which is limiting competition is the precise formulation of “self preferencing” – the state when giants are producing platforms preferring their own goods and services. Existing tools of competition law are not flexible and always behind in comparison to extremely developing digital World. The case European Commission vs. Google Shopping from 2017 clearly demonstrates that advancement is very slow: on one hand there is a compliance programme, on the other there is unwillingness to abandon preferred methods of displaying personalized products to consumers based on collected data. According to Mlsna, there must be a regulation not preventing the entry of smaller actors to the market. It shall be the European Commission to take the lead in this battle as national competition authorities have limited capacities to do so. It is also matter of responsibility over ex ante regulation and compensation. Who will be responsible over wrongly set ex ante regulation? The value of compensation is in billion Euro.
Mr. Mlsna concluded, that we are at the beginning of a broad debate about the final version of the Digital Market Act and that he is afraid that finalization will fall under the responsibility of Czech presidency of the EU. Every discussion providing new questions and answers is fully benefiting. Portuguese and French presidency have limited potential to finish this issue. However, there are also serious issues in other domains of competition, including agriculture and food production sectors; Green Deal and the Recovery Programme is bringing new implications as states will be required to support green technologies. Supporting some trends always limits free competition. There is a challenge how to ensure political priories and on the other hand not to destroy key principles of European integration in force since 1957.
Another person delivering opening speech was Kamil Nejezchleb – Vice Head of the Office for the Protection of Competition who extended the view on some issues raised by the fore speaker. He also started with the fact, that the World has changed and will not return back in time. Big companies recognized that it is not necessary to pay expensive offices and that many activities can be made in “home office”. This trend led to modernization in various areas, it led to the services development, delivery, e-commerce etc. On the other side some sectors were strongly hit and without subsidies would be irreversibly destroyed. However, even in this we can see some sort of competition – gastro enterprises started to innovate; many companies turned to e-commerce etc. Today, it is important to be visible – to be on a first places when searched on the internet. It is hard to replicate Facebook with 2,5 billion users. It will be impossible to create some alternative and competition authorities shall take this into the count and cooperate with the business. Business is always in advance and is flexible.
He also highlighted the need to protect the competition of the merits by protecting data and stressed the general role of competition protection. As noted, mechanisms can change, but general goal is kept, and thus regulatory principles are flexibly to address new methods of conduct. Authorities may be considered as a filter of bad practices; however, this filter shall let pass all practices which are benefit for the consumer who is at the heart of any regulation. Mr. Nejezchleb is also partially sceptical about the Green Deal as the primary objective of competition law is not to protect environment, but to protect a consumers and market economy.
The moderator asked a question: whether the Office for the Protection of Competition is planning some investigation in the Czech Republic. Do you can imagine that Czech Republic will have some issues with the giants or will leave it for the European Commission or bigger authorities?
Mr. Mlsna highlighted, that Office for the Protection of Competition (OPC) is having some complaints against giants – some are having significant EU aspects and thus solved at EU level, however another is very national. This is the case of Google, which is solved also in the Turkey for example. Nonetheless, to deal with Google you need a lot of preparation so the OPC is doing very detailed data collection, market monitoring and many other activities. He also ensured participants, that passivity of the OPC ended with his appointment. Mr. Nejezchleb added, that Czech Republic is a phenomenon in the World, thanks to Seznam.cz and Heureka. According to his opinion national regulatory authority shall intervene when dominant position is misused on the expense of these merely nationally operating platforms.
The last opening contribution was delivered by the associate professor Michal Petr, Head of the Department of International and European Law who highlighted the importance of the event, which attracted 14 speakers from the Czech and Slovak Republic. According to Petr, the topic is interesting also for broad public, because there is daily news about giants and their conduct. There are also some noticeable excesses, for example the book entitled “The Making of a Fly” which was priced at 18 million USD, just because the price was mistakenly calculated by the algorithm. He also highlighted new edge cutting research by Calvano et all. (2019) about the “Artificial Intelligence, Algorithmic Pricing and Collusion” or the fact, that Round tables of the OECD are increasingly dealing with the competition. As a moderator, Mr. Petr thanked to the speakers, again welcomed participants and opened second part of the workshop. (End of Part I)
The event was organised within the implementation of the Jean Monnet Network „European Union and the Challenges of Modern Society (Legal Issues of Digitalization, Robotization, Cyber Security and Prevention of Hybrid Threats) Project id: 611293-EPP-1-2019-1-CZ-EPPJMO-NETWORK.