EUROPEAN UNIVERSITY OF ROME (ITALY) USE AND ABUSE OF DATABASE RIGHTS IN THE DATA ERA LOOKING FOR A CONSISTENT APPROACH

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1 EUROPEAN UNIVERSITY OF ROME (ITALY) USE AND ABUSE OF DATABASE RIGHTS IN THE DATA ERA LOOKING FOR A CONSISTENT APPROACH Prof. Valeria Falce Dr Valerio Torti 1

2 Database Directive 96/9/EC PURPOSES BEHIND ADOPTION OF DIRECTIVE databases as vital tools in the development of an information market in EU need to stimulate investments in creation of databases via proper legal protection copyright as an appropriate form of protection for makers of original databases yet, databases not sufficiently and homogenously protected at EU level differences in legal protection of database have negative impact on EU market need to prevent unauthorized extraction or reutilization of database contents 2

3 Database Directive 96/9/EC WHAT DOES THE DIRECTIVE PROTECT? Collections (compilations) of independent works, data or other materials which are systematically or methodically arranged and can be individually accessed by electronic or other means (see Article 1, Recital 13 and Recital 17) 3

4 Directive 96/9/EC WHAT IS THE SUI GENERIS RIGHT ABOUT? to ensure protection of any substantial investment in either obtaining verifying or presenting the contents of a database to give the maker of database the option of preventing the unauthorized extraction or reutilization of all or substantial part of the contents of database 4

5 Directive 96/9/EC WHAT IS THE SUI GENERIS RIGHT ABOUT? to give the database maker the right to prevent the repeated and systematic extraction or reutilization of insubstantial parts of the database contents when this conflicts with a normal exploitation of that database or unreasonably prejudices the legitimate interests of the database maker sui generis right (15 years of protection from completion of database) applies irrespective of eligibility of database for protection by copyright or other rights 5

6 EU Commission Consultations (2005 and 2017) positive effects for harmonization of requirements of copyright protection created legal uncertainty as to scope & requirements of sui generis protection no remarkable boost in the Information Technology Sector no increase of investments in databases is the Directive still fit for purpose in today data driven economy? repeal Directive? repeal or modify sui generis right? no change? 6

7 EU Study on Databases Protection (2018) Directive contributed to harmonize legal protection of databases effectiveness (on investments) of sui generis right remains unproven some stakeholders invoked abolition of sui generis right database makers defended the right as an effective means of protection optimal balance between interests of database makers and users? unclear concepts in Directive ( substantial investment, insubstantial part ) databases generated by sensors / algorithms / AI / IoT covered by Directive? 7

8 Remedies Against Abuses? 8

9 Limiting Abuses Competition Law CONDITIONS FOR ENFORCEMENT OF ARTICLE 102 TFEU DEFINITION OF THE RELEVANT MARKET EXISTENCE OF A DOMINANT POSITION EXISTENCE OF AN ABUSE 9

10 Limiting Abuses Competition Law PROBLEMS WITH ENFORCEMENT OF ARTICLE 102 TFEU DIFFICULT TO ESTABLISH A MARKET FOR DATA (e.g., personal data) DIFFICULT TO FIND DOMINANCE (sole-source or standard de facto database) EXISTENCE OF EXCEPTIONAL CIRCUMSTANCES (refusal to license / deal) 10

11 Limiting Abuses Competition Law PROBLEMS WITH ENFORCEMENT OF MERGER REGULATION combination of databases = significant impediment to competition? Google / Double Click & Facebook / Whatsapp & Microsoft / Linkedin EU Commission : many other sources of data already available to competitors 11

12 Limiting Abuses Abuse of Right Theory EXERCISE OF A RIGHT BEYOND ITS SCOPE / PURPOSE exercise of the right prima facie lawful and within legal limits purpose of exercise does not reflect reason for which it was granted theory of abuse of right applied in particular in the EU law field (right exercised to circumvent national law, to gain undue benefits etc) 12

13 Limiting Abuses Abuse of Right Theory SUI GENERIS RIGHT EXPLOITED IN AN OPPORTUNISTIC WAY Eg, right holder alters database content only to extend length of protection it may eventually lead to unjustified barriers to entry the market or it may lead to an unfair imbalance between database right holder s benefits and sacrifices suffered by counterparty 13

14 To Sum Up DATABASE RIGHT RETAIN IT REPEAL IT COMPETITION ENFORCEMENT ABUSE OF RIGHT DOCTRINE CONTRACT LAW? UNFAIR COMPETITION? 14