Institute News

In the context of new technological developments and business models in the Internet ecosystem, the debate about the rules of net neutrality has resurfaced. For example, the European Commission is considering fair forms of payment by the big-tech companies, which could come into tension with the current Open Internet Regulation. While it makes sense to review regulation in light of new developments and societal needs, this should be done with consultation with all stakeholders.

Workshop participants have been at the heart of the debate in the last decade. Among them were representatives of public bodies such as BEREC and the German Federal Network Agency (Bundesnetzagentur) as well as representatives of civil society (Internet Society, Epicenter.works), think tanks (WIK) and academic scholars from technical, economic and legal disciplines. In addition, the discussion benefited from the participation of industry representatives, including major content providers (Netflix), Internet industry associations (eco e.V., ETNO) and entrepreneurs of new technologies at both the Internet application and infrastructure layers. With a focus on the EU, the workshop also brought together participants from other jurisdictions undergoing a flux regarding net neutrality policy, like the US and UK.

More or Less Regulation: Return on Investment versus Open Internet

The discussions emphasized that the debate over net neutrality is far from settled and remains polarized, making fact-based arguments more necessary than ever. One of the main questions that remains unanswered is how to achieve sufficient incentives to sustain investment in the Internet infrastructure as well as innovation in the fast-evolving Internet ecosystem. While some see the need to relax regulation to allow greater price differentiation and thus increase the return on investment for stakeholders, others believe that the hard-fought net neutrality rules in the EU's Open Internet Regulation should be kept intact.

Yet another key issue is the presence of big-tech companies in the Internet ecosystem. On the one hand, these companies have begun to develop their own private networks, raising the question of whether there are two Internets, one private and largely unregulated, and one public and subject to regulation. On the other hand, the debate about fair contributions reemerged, whereby large content providers, such as big-tech companies, would pay in relation to their use of the network. This renewed push came in the form of the publication of a study commissioned by ETNO on the socio-economic benefits of a fairer balance between tech giants and telecom operators. The argument is that this would enable the financing of the investments needed to roll out 5G technology. Depending on how a fair contribution is ensured, this might disrupt the established net neutrality system in the EU and finds fierce opposition among many stakeholders.

Conclusion and Outlook

A general conclusion of the workshop is that the independent nature of the Max Planck Institute puts it in a good position to enter the debate from an academic and neutral point of view. Against this backdrop, the workshop provided insights enabling the Institute to further develop a new line of research which represents a fundamental part of the discourse on digital economy.

On day one, keynote speaker Hanna Halaburda (NYU) refreshingly discussed whether bitcoin can help us go green. The paper and poster presentations on that day focused on topics relating to “Privacy & Information”, “Digitization, Strategy & Organization”, “Media”, and “Market Dynamics”.

The second day initially dealt with the topics “Startups”, the “Gender Gap”, and “Entrepreneurship & Innovation”. The keynote speech was given by Nicola Lacetera (University of Toronto) on “Trust and Social Support: Rethinking the Economics of Innovation in the Age of AI”. Then the participants turned their attention to the areas of “Information” and “Labor”.

Day three first offered insights into “Incentives” and then dealt with the paradox of privacy regulation. Melissa Wassermann (University of Texas Austin) spoke in her keynote about investing in ex ante regulation drawing on evidence from pharmaceutical patent examination. The last poster slam centered around IP from a legal and economics perspective, innovation and digitalization. The MSI 2022 ended with presentations on platform regulation and drug patents.

Since its beginning back in 2016, the Munich Summer Institute has aimed to facilitate networking within an international and interdisciplinary research community. Accordingly, the conference was organized jointly by ETH Zurich’s Center for Law & Economics (Stefan Bechtold), the Max Planck Institute for Innovation and Competition (Dietmar Harhoff), the Chairs for Technology and Innovation Management and Economics of Innovation at TUM (Joachim Henkel and Hanna Hottenrott), as well as the ISTO at LMU (Jörg Claussen and Tobias Kretschmer).

We would like to thank all our speakers, discussants and attendants for a truly outstanding MSI conference 2022. We look forward to next years’ Munich Summer Institute 2023, which will take place from 24 to 26 May 2023!

What direction is the European Union's innovation policy going in? Can legislative proposals such as the Digital Markets Act (DMA) make Europe fit for the digital age? Is the European IP framework still suitable to fulfil its fundamental functions in view of technological disruption? These were the questions addressed at this year's Alumni Conference, which was hosted on 9 July for the 17^th time by the Institute in collaboration with the Alumni Association “Friends and Former Employees of the Max Planck Institute for Innovation and Competition”. 
 

Due to the ongoing Covid-19 pandemic, for the first time the event took place online. Researchers and Alumni of the Institute as well as external guests from all over the world engaged in fruitful discussions on the current and future European law and policy framework for innovation and competition in digital markets. The conference was opened by welcome addresses of the chairwoman of the Alumni Association, Federica Togo, and the Managing Director of the Institute, Josef Drexl.

The European Union's Competition Policy
 

The first panel dealt with the competition policy of the European Union and was chaired by Dietmar Harhoff, Director of the Institute’s economic department. Cristina Caffarra, Senior Consultant to Charles River Associates and Visiting Professor at University College London, started by providing a critical look at the current competitive landscape and competition law enforcement within the digital world. In her keynote, she raised major concerns regarding, inter alia, structural underenforcement coupled with insufficient regulation, which also fails to properly address privacy concerns. The talk contained a critical look at the proposal for a Digital Markets Act (DMA) and further legislative action in the UK, the US, and Germany, and questioned whether the current regulatory environment helps to foster innovation.
 

In the second keynote of the first panel Rupprecht Podszun, Chair for Civil Law, German and European Competition Law and Director of the Institute for Competition Law at the University of Düsseldorf, spoke about “Taking Decisions on Regulating Big Tech”. He argued for a principled approach that should be followed by policymakers enforcing competition law vis-à-vis Big Tech companies. The presentation focused, inter alia, on the question where such principles come from (e.g. constitutional documents) and on the relationship between competition law and fundamental rights issues, such as personal data protection, sustainability or the protection of consumer autonomy. Within his keynote he discussed different ways of intervention against the backdrop of different market models.
 

The discussion after the first panel focused, for example, on the question which goals the proposed DMA pursues (if any). It was also discussed how a competition policy can be justified that aims at providing consumers with more sovereignty and choice in order to protect competition, but at the same time cuts down the users’ convenience by regulating the conduct of Big Tech companies.

The IP Policy of the EU

The second panel, chaired by Reto M. Hilty, Director at the legal department of the Institute, was devoted to the EU’s IP policy. Katharine Rockett, Professor at the University of Essex, started by laying the economic groundwork on intellectual property protection for data and Artificial Intelligence. She first elaborated on the general preconditions under which IP rights for data may be justified and put a special emphasis on issues of licensing and diffusion. After having illustrated the distinguishing features of data compared to more traditional subject matter for intellectual property protection and the implications of these features for intellectual property design, she made some final remarks on how Artificial Intelligence might alter traditional IP paradigms.
 

Building on this economic foundation, Matthias Leistner, Chair of Private Law and Intellectual Property Law with Information and IT-Law at the University of Munich, gave an overview on both the current IP landscape of the EU and upcoming IP policy reforms from a legal point of view. Against the backdrop of a newly-evolving overall access and portability paradigm in EU law making, he critically examined the protection of database works de lege lata under copyright law, the sui generis right for databases, and trade secrecy rules. He particularly pointed out the need for abolishment or at least substantial reform of the database sui generis right. Leistner then gave an outlook on how the European Commission plans to address this and other existing problems in the course of its upcoming Data Act.
 

The following lively discussion revolved around, inter alia, the problem of over-complex and overlapping regulatory levels to the detriment of small market players, the possibility of introducing new registration systems for as of yet unregistered IP rights, and the advantages of a more unfair competition law oriented approach towards the protection of databases.

For the third time now, the two-day event was organized by Ph.D. students and Postdocs of the Department for Innovation and Entrepreneurship Research to give young scholars the opportunity to present and discuss their work.

On the first day, the workshop was kicked off with a session on Intellectual Property Rights, followed by sessions on Science of Science and Individuals in the Knowledge Economy. Speakers presented research findings related to the strategic drafting of patents, trademark enforcement and counterfeiting, the effect of government funding on follow-on innovation, and voluntary employee representation and its effects on innovation. The final presentation of the day shed light on the gender innovation gap by analyzing gender differential responses to early patent rejections.

The highlight of the first day was the keynote speech by Rosemarie Ziedonis and Sina Khoshoskhan who presented results on “Forty Years of Research on Intellectual Property and Innovation: Dominant Themes and New Horizons”. An interactive discussion emerged on what makes a scientific paper interesting, stand the test of time, and be considered at the frontier of its field.

The second day offered interesting insights on Firms and Innovation, Takeovers and Investment, as well as AI and Innovation. Young scholars presented research on the global innovation strategies of multinational firms, the impact of common ownership on markups, the innovation effects of killer acquisitions, and the effect of angel investments on corporate innovation. In the last session, the researchers focused on who is shaping AI given the differential access to computing power, and on the barriers to growth firms encounter in developing AI.

See the complete program with all topics here and find the coverage on Twitter under #RISE3Workshop.

The RISE workshop series aims at stimulating a rigorous in-depth discussion of a selected number of research papers by Ph.D. students and Junior Postdocs, providing feedback and connecting with peers from other research institutions. Accordingly, the workshop brings together young researchers from all over Europe and the US with researchers from the Munich Innovation Community.

We thank all participants, including the keynote speakers, discussants and presenters for a truly outstanding RISE3 Workshop 2020. Our special thanks go to the organizing team, especially to Cristina Rujan, Timm Opitz, Kathrin Wernsdorf, and Felix Poege. With great enthusiasm and motivation, we look forward to the RISE4 Workshop 2021 ‒ then hopefully again in person at the Max Planck Institute for Innovation and Competition in Munich.