Rohan Kariyawasam, Anglia Law School, Anglia Ruskin University, Cambridge UK
A needle in a Haystack? The elusive test of dominance in the Digital Economy
Digital networks and the increasing power and capacity of microchip technology has given rise to a vast new range of electronic services, and with the rise of such services, the emergence of new corporate relationships between operators at different levels of the delivery chain. Two of the most current important developments in internet architecture–and that will have significant implications for digital trade–are the migration of legacy internet networks to a new breed of Next Generation Networks (NGNs), the exhaustion of current IPv4 internet addresses and the move to IPv6. The single most important driver of change is the convergence of the network, with an integrated Internet Protocol (IP)-based NGN delivering a combination of data, voice and video. NGNs are an area of critical significance to the Digital Economy and central to the distribution of electronic content and services over networks in the next decade. Delivering effective competition and network neutrality over NGNs will be crucial in ensuring media plurality, the respect for electronic privacy, and lowering the costs for businesses and consumers in the UK. The migration to NGN makes it possible for different underlying platforms (for example, fixed telecommunications and cable television) to offer equivalent services, that have the potential to benefit competition, but simultaneously enable offers of multiple services to the end-user that could give rise to new anti competitive concerns. To address these concerns, the author has developed a Layering Theory to more accurately define a relevant market in the Internet sector. Accurate market definition is central to any competition investigation and the theory will assist regulators in assessing NGNs. Regulators are always playing catch-up with technology. The European Commission has recently put in place an excellent and far-reaching Electronic Communications Code-ECC for regulating electronic communications networks and services, which challenges the traditional separation of the regulation of digital content from the digital networks that carry the content.3 But the question remains, as to whether this new framework will remain adequate to deal with the complex range of protocols, layers, and applications that constitute such new services. Regulators are used to dealing with single-application networks, but increasingly face the challenge of multi-application networks. The European Commission has made more subtle the definition of an electronic communications service, creating number specific and non-number specific categorisations, and in one stroke, capturing previously unregulated data communication services, such as Skype and Whatt’sup. But the author argues this is still insufficient to deal with creeping market dominance amongst the hidden layers of the internet protocol stack. What is needed is a new form of regulation of layers and predictive analytics from the traffic data amongst those layers to truly understand the dominance, that multiple internet layer operators, such as Google, enjoys. This paper looks to apply a layered policy model for regulating a new generation of packet-switched networks that draws its origins from computer science theory. The layered policy model has a number of synergies with the EC’s ECC, for example in using a mix of horizontal and vertical regulatory controls. In using the layered policy model as a building block, the author sets out a legal theory for regulating complex digital networks (the “layering theory”), and then in using that theory together with elements of the ECC suggests a different interpretation of the test of significant market power (“SMP”) or dominance within EC jurisprudence, that will have an immediate impact on any undertaking offering an electronic network and/or service within the European Community. The author argues that to implement such a regulatory model, network probes will be required to measure traffic data at both internet public and private peering points so as to generate the network analytics necessary to implement the Layering Theory. The author argues that the use of AI and algorithmic theory will allow regulators to determine dominance at any layer of the internet protocol stack, and in any geographical region, delivering improved effective competition, greater choice and lower end user costs.
Rohan Kariyawasam, Professor of Law, Anglia Ruskin University, Cambridge. Rohan is also Director of Research at Anglia Law School. His work involves the intersection of technology, IP, information law and the humanities. His current research looks at blockchain and SMART contracts in copyright transactions and algorithmic regulation. He has completed projects as Principal and/or Co-Investigator for the ESRC, AHRC, AHRB, European Commission and World Bank and in commercial research for McGraw-Hill in London, Kuala Lumpur and Hong Kong. He was awarded a MC Fellowship by the British Academy for his work on market competition, net neutrality and privacy on the internet and appointed to the E15 Digital Economy Expert Group of the World Economic Forum and International Centre for Trade and Sustainable Development. Trained as a computer and communications engineer with Marconi, he then went on to work as a lawyer in private practice with a leading range of telcos and ISPs, specialising in technology law, IP, competition and trade. Rohan obtained his PhD in commercial and IP law at the Centre for Commercial Law, Queen Mary University of London. He has been Visiting Professor at Peking University Law School and a Fulbright Scholar and Berkman Klein Centre for Internet & Society Fellow at Harvard Law School.