Policy Recommendation on Competitive Issues of PSI Re-use First draft … and beyond … Warsaw, October 20 th, 2011

LAPSI, Warsaw 20/10/ As to the market … Public sector entities generating PSI Public sector entities supplying value added data Private sector firms Upstream market … Downstream market WHERE WE WERE (1/2) …monopolized market …competitive market

LAPSI, Warsaw 20/10/ WHERE WE WERE (2/2) No access, via High charges ex 102(a) Explicit refusals to supply ex 102(b) Anticompetitive foreclosure of private companies ex 102(b) via Predatory prices – Dumping prices – Cross subsidization Margin squeeze – Price discrimination – Rebates Public sector entities holding PSI Public sector entities Private sector firms Upstream market/ monopolized market Downstream market/ competitive market As to the conduct …

LAPSI, Warsaw 20/10/ As to the market … we are going to notice that … Public sector entities holding PSI Public sector entities supplying value added data Private sector firms Upstream market Downstream market WHERE WE ARE GOING (1/7) Private sector firms

LAPSI, Warsaw 20/10/ We are going to point out the chance of upstream competition … and indicate the chance that the general obligation to supply PSI at a low price may cause two drawbacks: It may discourage public sector entities to produce raw data, or high quality raw data, because they do not profit from this activity; It may discourage private sector firms to remain/enter into the upstream market, because either they loose the money that they have already invested to produce PSI, or do not have any incentive to produce these raw data by themselves. WHERE WE ARE GOING (2/7) But this cannot be our first aim. If we want to encourage re-use by private firms, we must fight against anticompetitive behaviors

LAPSI, Warsaw 20/10/ WHERE WE ARE GOING (3/7) As to the conduct … we are going to suggest 1)the enforcement of antitrust law against public sector bodies … but it can be costly and burdensome (perhaps a suggestion could regard the burden of proof) and 2)the adoption of different tools for lowering the risk of anticompetitive practices (meaning for acting ex ante, so to reduce the incentives of public sector bodies to abuse of their position).

LAPSI, Warsaw 20/10/ WHERE WE ARE GOING (4/7) (A) An exhaustive list of reasons that can legally justify the refusal? If no, why? For instance, because … (1)An exhaustive list would be impossible (2) National laws already establish this obligation (3)Competition laws already says a lot on this matter (see case law about objective justification) (4)The management of these refusals would be a bit bureaucratic (5) Others?

LAPSI, Warsaw 20/10/ (B) Corporate separation for public entities the public sector entity fulfilling its public task the public sector entity that competes against private firms in order to guarantee, via separated account books, transparency as to the costs of the release of PSI WHERE WE ARE GOING (5/7) If no, why? Because … (1) It could be costly and, hence, it could reduce the incentives of public bodies to re-use PSI themselves (2) Cross-subsidization helps public sector bodies financing the production of PSI. It is not always true that public sector bodies would always produce the same volume (and quality) of PSI. (3) Others? Issue of law/ Issue of fact

LAPSI, Warsaw 20/10/ Section 8 of Italian Competition Act Public undertakings and statutory monopolies …2. The provisions of the preceding sections do not apply to undertakings which, by law, are entrusted with the operation of services of general economic interest or operate on the market in a monopoly situation, only in so far as this is indispensable to perform the specific tasks assigned to them. 2-bis. The undertakings referred to in sub-section (2) shall operate through separate companies if they intend to trade on markets other than those on which they trade within the meaning of the same sub-section (2). …2-quater. In order to guarantee equal business opportunities, when the undertakings referred to in sub-section (2) supply their subsidiaries or controlled companies on the different markets referred to in sub-section (2-bis) with goods or services, including information services, over which they have exclusive rights by virtue of the activities they perform within the meaning of sub-section 2, they shall make these same goods and services available to their direct competitors on equivalent terms and conditions. For instance Remember: the Commission wants us to focus upon the notion of services of general interest

LAPSI, Warsaw 20/10/ WHERE WE ARE GOING (6/7) (a)the amount of economic resources that public bodies need to keep on generating PSI – which is a prerequisite for undertaking a dynamic analysis of the process of generating PSI and, thus, a prerequisite for better fixing the public sector charging policy; and (b) how public bodies calculate the price that they charge for making a specific piece of PSI available to private companies – which, in turn, is a prerequisite to understand whether the charging policy represents an antitrust offence. (C) Public sector bodies could be obliged to publicize the costs they bear for both generating PSI and facilitating its re-use. These costs would include: In this way, we could suggest to charge re-users with the costs that public sector bodies sustain in order to facilitate re-use, at least when public sector bodies are vertically integrated… Indeed, one of our aims it to sustain flexibility, allowing different solutions that could fit both the different existing scenarios and the possible future scenarios

LAPSI, Warsaw 20/10/ WHERE WE ARE GOING (77) the current Directive opts for non-exclusive licenses between public sector bodies and private companies. This preference is aimed at preventing the creation of a private monopoly in the downstream market of goods built upon PSI. However, when public sector bodies are not vertically integrated, the same result could be achieved even allowing exclusive licenses if, and only if, exclusive licensees were selected via an auction system. Do you want to change article 11 accordingly, that is to say, that public sector bodies can replace non-exclusive licensing with exclusive licensing only when this latter takes place via auctions? Besides, we are going to suggest that the antitrust logic would change some provisions of the current directive. For instance,

LAPSI, Warsaw 20/10/ Other suggestions? Thank you