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Regulation of Cloud Services under US and EU Antitrust, Competition and Privacy Laws

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Sára Gabriella Hoffman

This book examines how cloud-based services challenge the current application of antitrust and privacy laws in the EU and the US. The author looks at the elements of data centers, the way information is organized, and how antitrust, competition and privacy laws in the US and the EU regulate cloud-based services and their market practices. She discusses how platform interoperability can be a driver of incremental innovation and the consequences of not promoting radical innovation. She evaluates applications of predictive analysis based on big data as well as deriving privacy-invasive conduct. She looks at the way antitrust and privacy laws approach consumer protection and how lawmakers can reach more balanced outcomes by understanding the technical background of cloud-based services.

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8 Interoperability and innovation

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8 Interoperability and innovation

„The most difficult case I had to decide was certainly Microsoft. I am sure that it is Microsoft not just for the technical complexity but because there was a rather dramatic trade off to be made after the long investigation and after the three days intensive final negotiations with the CEO of Microsoft in order to achieve a settlement. That was a very good phase, but I concluded that we needed for the benefit of legal certainty and of competition enforcement, to have a binding precedent. To me the biggest cost associated with getting to a decision had to do with our transatlantic relationship“ – Mario Monti (2008)325

Interoperability plays a large role in database management systems. It is determining factor whether data can be migrated and integrated into an existing cloud platform. It also is the decisive factor for potentially high switching costs and for the pursuits of a standardization agreement between technology companies. Interoperability and innovation are linked. The following chapter illustrates the nexus between interoperability and innovation by examining different types of innovation and its impact on competition law and policy. The question that cases before U.S. and EU courts and competition agencies have raised remains unanswered. The compulsory disclosure of interoperability information can either lead to an additional incentive to innovate because the competitive pressures have been heightened by government agencies. Or, the incentive to innovate will drop substantially because the reason for innovation is void once competition...

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