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'Things' Are People, Too +The Internet is ''" hybrid between math and our human lingua franca of choice"''. In order to make the Internet of Things a greater opportunity for us, we should change our perspective: instead of considering our IoT "Things" as things, we should consider them as people, or, better, as employees. This would lower the friction between man and machine, and therefore improve our relationship with our IoT "Things": ''"Need a new thing to do a job for you? Hire it, or have your manager hire it. Some thing not doing what you hired it to do? Fire it. Drop it like a hot toaster. Replace it."'' N.B. ''"To borrow a beautiful new slogan that Microsoft gave us this year, “When you change the way you see your world, you can change the world you see.” This is certainly something we, the IoT industry, must do to get a handle on the big challenges our silicon employees present in terms of interoperability, usability and security."'' See also [[The Hierarchy of IoT “Thing” Needs]].  +

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10th Meeting of the Internet of Things Expert Group +In 2012, the European Commission publishes the output from the work of the group of experts on the Internet of Things: this is the IoT Expert Group Final Meeting Report. Let's summarize the main findings of its work. Privacy: * Specific legislation (i) or not (ii) (burdens, soon obsolete…)? * Privacy by default (i) or harmful situation if users have to give explicit permission for object to function as intended or required (ii)? * Loss of control: automatic decisions; invisible or unnoticed IoT systems. * Locking-in: users prisoners of a service provider  some service providers may emerge, lowering users’ freedom of choice --> monopoly situation (even if no formal monopoly). * Standardization is important: technical standards cause an increase of interoperability, and interoperability may help the respect of data protection legislation. Safety and Security: * Prescriptive measures can improve security and safety (ii) or will only increase delays and costs? * Generic approach (i) or different approaches based on the needs of the different industries involved (ii) (“one size doesn’t fit all”)? Ethics: * Problems of discrimination in access to IoT technologies? IoT may increase the digital divide. * Control issues: seamless interactions will lead to a distributed control, and the notion of informed consent may become obsolete. * Problems of separation between contexts and social spheres, because IoT blurs the boundaries between them. * Who is responsible and liable when unforeseen events cause harmful effects? * Ubiquity, invisibility, identification, ambiguous ontology and connectivity are the morally relevant characteristics of the IoT. * Positive implication of the IoT are better decision-making, utility, wellbeing, health, safety and security. Identifiers: * Open (i) or closed (ii) platforms? * Globally unique permanent identifiers (to foster interoperability) (i) or short-lived and one-off identifiers (to foster privacy and security) (ii)? Governance: * Administration of governance through existing Internet platforms (i) or thorough new platforms (ii)? * New governance bodies (i) or already existing bodies (ii)? * What is the relationship between Internet in general and IoT? Internet is a part of IoT (i); IoT is an application of Internet (ii); IoT is formed by different applications. * It’s premature to forge new principles and guidelines. * For the moment, the current Internet governance is sufficient to the IoT. * Three key issues are particularly relevant to policy decisions privacy; competitiveness; security. Standards: * They may be helpful in the IoT domain (e.g. to guarantee privacy). * But they may also introduce delays. * Moreover, they need to evolve when the circumstances considering which they have been introduced change. * Technical M2M/IoT standards are still too fragmented: indeed, solutions are mainly developed through a vertical model; we need a common service layer that fosters reuse and interoperability between applications and devices. Architectures: * Too many proprietary solutions in the past, a situation that mustn’t be repeated: more interoperability!  +

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30 Billion “Things” To Consider: How IoT Will Transform Enterprise IT +''"IoT has broad application over many industries. Some will embrace and implement faster than others. Broadly, industries that have highly distributed infrastructure to support their business will be the first to get value – Logistics, Supply Chain, Utilities, Healthcare, Retail. While consumer products are getting all of the press right now – ([[Fitbit]], [[Nest]]...) the truly transformative nature of IoT is in “digitizing” all industries by providing real-time data and analytics to lower costs, increase efficient use of infrastructure and deliver personalized on-demand services."'' ''"According to IDC, Consumer Products will be the largest vertical in terms of IoT spend by 2020. The other vertical comprising IoT spend include: Manufacturing (24%), Public Sector (23%), Services (15%) and Infrastructure (9%), and Financial Services (3%)."''  +

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4 Ways Copyright Law Actually Controls Your Whole Digital Life +As Cory Doctorow explains, <i>"When digital locks [DRM] get broken, the companies that install them want to be able to patch them, and keep them up to date, and make them temporarily not-broken again. But that means that companies want — and get — access to your stuff any time it connects to the internet, whether you want it to or not. As Doctorow puts it: “Digital locks can’t work without renewability. You can’t ‘protect’ devices from their owners unless you can update them without their owners’ knowledge or consent.” But then that makes the legal software as good as malware. “Renewability for digital locks means that you can’t be allowed to know what’s running on your computers,” he continues. “And that means you can’t decide what’s running on them. … The endgame for renewability must be that all computers are built with this facility in mind.” “Imagine what it will mean when the person operating a car, or carrying around an implanted device, can’t know or control what’s running on that computer — but third parties can.”"</i> <u>Providers have the power to renew DRM that have been broken by the device owners: this can also cause security problems, because users can become without previous notice unable to use the device to perform an activity which was impeded by the broken DRM.</u>  +

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5 Reasons The iPhone 6 Will Save The Internet of Things +''"[S]martphones are becoming the universal remote control for the Internet of Things"''. ''"Yet despite its very short range, NFC is an historic opportunity for the IoT: by making a tiny modification to next-generation NFC chips, smartphones are able to connect concurrently with thousands of low power IoT devices from hundreds or even thousands of meters away"''.  +

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A Dark Side of Data Portability: Litigators Love It +''"Cloud services are great, but they pose a number of challenges for users. For example, users may legitimately fear that vendors will “lock-in” their users by holding user data hostage, forcing users to keep using their services instead of better competitors because it’s too painful to forego or transfer the existing data. To ameliorate this concern, there has been a push to demand that cloud service providers offer users a data export feature that makes it easier to take their data to competitive vendors. For example, earlier this year the European Union proposed revising its data privacy rules to require mandatory data portability (see Article 18). However, those favoring the proliferation of data export tools should consider another audience that will find the tools quite useful: litigators seeking to do discovery of cloud users."''  +
A Simple Proposal To Improve Security for the Internet of Things +''"The simplest and least expensive security requirement for next generation wireless IoT technology design is stealth"''.  +
A Supply Chain of Things: the EAGLET ontology fir highly visible supply chain +Technological development (e.g. RFID) has facilitated the identification of individual things and information sharing regarding their behavior throughout the supply chain. Supply Chain of Things = IoT for the supply chain. Thanks to it, things can interact with each other and other components of the supply chain, increasing the visibility of each individual item in the supply chain: location and characteristics of all the things in the supply chain can be ascertained at any point in time. To realize this supply chain of things, there is need for trust in the supply chain. There is also need for shared semantics enabling interoperability. Supply chain = it encompasses all activities associated with the flow and transformation of goods from the raw material stage through to the end user, as well the associated information flows. This article develops a model for a Supply Chain of Things. Initially the term IoT was used to describe the following situation: ''“Today computers – and, therefore, the Internet – are almost wholly dependent on human beings for information.…The problem is, people have limited time, attention and accuracy—all of which means they are not very good at capturing data about things in the real world. …Computers need to be empowered with their own means of gathering information, so they can see, hear and smell the world for themselves”'' (Kevin ASHTON). However, today we have an IoE (Internet of Everything), where more than just other computers and sensors, but also people, are linked together by the internet (as CISCO said).  +
AllSeen Alliance. An Open Source Project Building the Framework of the Internet of Things +The AllSeen Alliance is the world’s largest collaborative open source project developing code for the Internet of Things, in order to make it an Internet of Everything. The IoT is already a widespread phenomenon, but, to take the biggest benefit from it, there is need for the IoT products' ability to work together. That means that there is need for a common language which enables products to recognize, communicate and interact with each other. However, today this is not the most common situation. On the contrary, in this domain we have several problems with the IoT: * a different app for every device; * difficult integration; * inability of devices to interact locally; * abundance of cloud connection; * difficulty of building rich scenarios. If a single brand or company could build the entire IoT, probably problems like that wont' exist. But this is not possible (<u>moreover, a monopoly of that kind would create competition issues</u>): there is therefore need for a connected network of companies, applications and products. The Alliance has therefore created '''AllJoyn''', ''"an industry-supported software and service framework that makes a world full of smart connected products that work together possible."'' AllJoyn is a shared code base and a common communication protocol, and it is already in millions of real products today. The list of the products using the AllJoyn software framework is available here: https://allseenalliance.org/showcase-products-using-alljoyn. These are some of the features of AllJoyn: * it exposes smartphone APIs; * through a single protocol, it allows products and apps to expose their capabilities and interact with other devices and apps; * its proximal network topology enables direct communication between products, avoids cloud intermediation when the devices are close to the the user (local access takes place via AllJoyn directly), and enables remote access through a common point (remote access takes place via the AllJoyn Gateway Service): * there is a rich app ecosystem with a choice of apps that enable the integration of different devices. ''"Products, applications and services created with the AllJoyn open source project can communicate over various transport layers, such as Wi-Fi, power line or Ethernet, regardless of manufacturer or operating system and without the need for Internet access. The software has been and will continue to be openly available for developers to download, and runs on popular platforms such as Linux and Linux-based Android, iOS, and Windows, including embedded variants."'' AllSeen offers also a certification program: if a product satisfies the code, compliance and interoperability requirements stated by AllSeen, it is registered in the ''AllSeen Certified Products database'' and earns the right to wear the ''Designed for AllSeen logo''. See [[Why the internet of things favours dominance]].  +
An ambitious EU circular economy package +The EU Circular Economy Package has the “end goal of less waste production”. This less waste production should be implemented taking into consideration “the entire circle” [of product life]. Therefore, the entire value chain must be involved in such a project, consumers included. The Package therefore addresses both to “economic operators and society”, not only because both businesses and citizens can help in realizing the aforementioned goal, but also because they both will benefit from circularity (in fact, on the one hand, there will be new business and job opportunities; on the other, there will be more competitiveness, and products and services more affordable, convenient, efficient, durable, and sustainable). --> IoT could help in realizing energy efficiency.  +
Appalto di Software e Trasferimento dei Diritti +==I contratti ad oggetto informatico== Contratto ad oggetto informatico (o contratto di informatica) vs. contratto informatico:''"i contratti di informatica sono quelli che hanno ad oggetto beni o servizi informatici, mentre i contratti informatici sono quei contratti in cui l’informatica interviene quale mezzo di rappresentazione o di espressione della volontà"'' (definizione di FRANCESCHELLI). Secondo la dottrina italiana, i contratti ad oggetto informatico non sono una nuova categoria di contratti a sè stante, perciò il giurista deve verificare la compatibilità di questi contratti atipici con i contratti tipici esistenti, tenendo conto di come il nuovo oggetto possa influenzare l'assetto negoziale, tenendo anche conto delle peculiarità del dirtto d'autore. I contratti di informatica sono dunque contratti atipici. In Italia, facciamo riferimento allora alla disciplina: propria dei vari contratti tipici richiamabili, alla disciplina del contratto in generale (artt. 1321 e ss. c.c.) ed ai principi generali della contrattualistica sul diritto d’autore (artt. 107 e ss. della legge n. 633 del 1941). Per alcuni il contratto di informatica è un contratto misto, per altri un insieme di contratti collegati: * '''contratto misto o innominato''': la dottrina applica il criterio dell'assorbimento (si applica la disciplina tipica del contratto prevalente) o il criterio della combinazione (si devono osservare le norme specifiche di ciascun elemento di ogni tipo, per quanto fra loro compatibili); la giurisprudenza prevalentemente quello dell'assorbimento; * '''insieme di contratti collegati''': i contratti collegati sono contratti tra cui sussiste un nesso di interdipendenza (il primo non sarebbe stato concluso dai contraenti senza il secondo); il collegamento può essere volontario (quando le parti decidono di subordinare la sorte di un accordo a quella dell'altro) o funzionale (quando il collegamento risulta dall'unitarietà della funzione, cioè quando i vari rapporti negoziali posti in essere tendono a realizzare un fine pratico unitario). Se abbiamo un contratto misto, non dobbiamo considerare singolarmente le singole pattuizioni (per es. l'uso di termini come compravendita, licenza d'uso...), ma fare riferimento all'intero rapporto posto in essere, unitariamente considerato, valutando l'interesse economico finale dell'operazione voluto dai contraenti (le varie prestazioni multiple vanno infatti considerate unitariamente in relazione alla funzione economico-sociale che i contraenti hanno voluto imprimere ed assegnare al contratto ''de quo''). Nel contratto di fornitura di software personalizzato, per es., vi è un'unicità di causa, con elementi propri del contratto di compravendita (per l'hardware), dell'appalto d'opera (per lo sviluppo del software) e dell'appalto di servizi (assistenza tecnica su hardware e software). <u>Però qui alla fine il software resta poi al committente, perciò gli elementi della compravendita non sono menomati dall'appalto: infatti si ha un appalto d'opera di un software che poi resterà al committente, e un appalto di servizi che certo può essere importante, ma che si configura solo come assistenza tecnica, ed è perciò secondaria, non strumentale all'utilizzo tout court di harwdare + software; invece, in ambito IoT, l'appalto di servizi serve proprio alla fruizione anche dell'hardware e del software.</u> ==Contratto d'appalto vs. contratto d'opera== Questi due tipi di contratti sono molto simili - salvo per il fatto di utlizzare ad un'organizzazione imprenditoriale (appalto) od utilizzare mezzi prevalenetemente propri (contratto d'opera) -, perciò quando si ha appalto si può anche applicare in via analogica la disciplina del contratto d'opera. Addirittura, alcuni ritengono che quando si abbia contratto di prestazione d'opera intellettuale, proprio per questo particolare oggetto del contratto non si possa comunque avere appalto, a prescindere dall'utilizzo di mezzi imprenditoriali, ma solo contratto d'opera (il contratto d'opera intellettuale è un particolare contratto d'opera espressamente disciplinato dal c.c., ma cui si applicano anche le norme del contratto d'opera).  +
Apple unveils move towards health and home in new iPhone software +Announcing HealthKit, Craig Federighi, Apple's software chief, said ''"that presently apps retain their data inidvidually but do not interact or connect to make good use of it. "That information lives in silos," he said. "You can't get a single comprehensive picture.""'' See [[Why the internet of things favours dominance]].  +
Attitudes and Behaviors of Mobile Network Operator Customers: Contributions toward empirically founded marketing strategies for mobile navigation and Internet services +Page 62: ''"There are several basic pricing schemes which aim at generating MNS revenues from end customers. First, MNO have the option to charge a subscription or flat fee for enabling mobile communications customers to resort to MNS on their portable devices regardless how often they actually use the services during the accounting period (typically a calendar month). From a customer perspective this pricing approach has the advantage that it avoids cost/bill surprises or a "usage shock" which could occur as customers draw on the service much more frequently than expected. Further, a flat rate circumvents a "taxi meter effect". This means that unpleasant emotions are reduced by flat rates and enhanced by pay per use schemes "because consumers attribute the cost and, thus, the pain of paying to consumption at the time of usage. In contract, paying a flat fee decouples consumption from payment because the costs are mentally prepaid... Thus, usage, which has been paid for beforehand, can be enjoyed as if it were free"''. See also [[Payment Method Design: Psychological and Economic Aspects of Payments]].  +
Automatic +Automatic's components: * the Hardware: device to be connected with the customer's car (through installation into the standard diagnostics port), and which connects the car to the Service * the Service: ** the Software: any software that may be made available by Automatic in connection with the Service, such as mobile applications and embedded software ** the Site: https://www.automatic.com ** vehicle information provided by Automatic and related services ** the Automatic App: free app that i. pairs with the adapter via Bluetooth, ii. stores data collected by the adapter in the cloud, and iii. displays information about the car (engine diagnostics, parked car locator, emergency crash response, etc.) and the customer's driving habits ** the Automatic App Gallery ** the Content: data, reports, text, images, sounds, video, and content made available by Automatic Labs Automatic is compatible with several Apple and Android phones, listed on the Site. In case of problems or doubts, customers can contact Automatic Labs at support@automatic.com.  +

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BREAKING NEWS – EU Privacy Reform Agreed +"The data protection regulation will provide among others: [...] 2. A right to data portability It will be easier to transfer individuals’ personal data between service providers. This right might have an impact for instance on data protection issues affecting Internet of Things technologies when an individual purchases a new connected car and wants to “port” his profile from the old to the new vehicle."  +

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Charter of Fundamental Rights of the European Union +Article 17 '''Right to property''' <i>1. Everyone has the right to own, use, dispose of and bequeath his or her lawfully acquired possessions. No one may be deprived of his or her possessions, except in the public interest and in the cases and under the conditions provided for by law, subject to fair compensation being paid in good time for their loss. The use of property may be regulated by law in so far as is necessary for the general interest. 2. Intellectual property shall be protected.</i> See [[European Parliament resolution on the Internet of Things]]. See [[The Lion, the Fox and the Workplace: Fundamental Rights and the Politics of Long-Term Contractual Relationships]].  +
Circular Economy in Europe – Developing the knowledge base +The EU wants to achieve a 2050 vision of “living well within the limits of our planet”. If it can acquire the role of leader in the path towards a circular economy, that could be an advantage for it, as it would be able to “drive innovation” (p. 9) in, for example, better products and services. At p. 11 there is a non-exhaustive list of technical, economic and social enabling factors required for a transition to a circular economy: high-quality recycling, repair and reuse, upgrading, product-service systems instead of product ownership, collaborative consumption, collaboration and transparency along the value chain, industrial symbiosis, data, monitoring and indicators, etc. --> Most of the listed enabling factors (especially those I reported above) scream “Internet of Things!”. Hence, IoT can be defined as potentially effective across-the-board tool to be employed for purposes of a circular economy, given that IoT – if properly used – can actualize many of the latter's enabling factors. --> Another tool is across-the-board with respect to the technical, economic and social enabling factors of a circular economy: the legal tool, the policy-making tool. The legal variable is in fact critical for the success of the circular economy: indeed, a lack of intervention from legislators and policy-makers towards circularity would not only not positively foster the realization of a circular economy (i.e., “the legislator does not intervene, so the process will be slower: he could have helped making it faster”, e.g., through incentives for business models and product designs which foster circularity, increasing transparency, and moving tax burden to activities damaging the environment), it would even be challenging (“existing policy frameworks [do] not [keep] up with changing social technological and economic contexts” (p. 18), and therefore they are calibrated on the traditional and almost obsolete model – in that context, the old linear economy –, therefore nurturing and supporting it) [Cf. with Strategies for Manufacturing]. The Report depict the most significant and critical enabling factors: * 1. Business model innovation: product-service systems (they are beneficial for consumers as they are transparent about the whole cost of the use phase (p. 15) [but remember the pain of paying], but negative consequences for businesses can be envisaged); collaborative consumption (sharing business models, like online sharing marketplaces, but lower sales made by businesses and diminished tax revenues for governments; the use or not of sharing models is also influenced by cultural factors); waste-as-a-resource business models. * 2. Eco-design (product redesign or new product design) to made products more durable, upgradeable and repairable (a negative consequence is longer use of inefficient products). * 3. Reuse: product components that are not waste are used again for the purposes for which they were conceived. In order to succeed in implementing the circular economy there is also need for data about the effectiveness of the measures adopted and about the quantitative and qualitative progression of circularity: “More robust data are needed on new business trends ad sustainable consumption relating, for example, to eco-design, the sharing economy, and repair and use” (p. 30). “Overall, in the transition to a circular economy, it will be crucial to monitor how far the environmental benefits of circular approaches are realized or countered, for example by rebound effects”. --> The monitoring needed in order to gather this data could be performed employing, again, the Internet of Things.  +
Closing the loop: Commission adopts ambitious new Circular Economy Package to boost competitiveness, create jobs and generate sustainable growth +Circular economy would benefit both environment and economy. For what concerns economy, circularity can in fact promote competitiveness and open the way to new business opportunities. In fostering circularity, we should not exclusively focus on “the end-of-life stage”, but adopt a broader perspective, and undertake a more comprehensive action (→ encompassing the entire life of the product, and starting from its very own design). Frans Timmermans (EC's First Vice-President, responsible for sustainable development), highlights the need to rethink the way we produce and buy. He also states that circularity can create new jobs (e.g., jobs for people who want to redesign products – and/or the way to commercialize them - in order to make them more sustainable; jobs for people who want to find new ways to recycle and reuse used materials; more generally, jobs for people who decide to adopt business models fostering circularity).  +
Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions — A Digital Single Market Strategy for Europe +==Competition== [[CC8::TC4::''"The Digital Single Market must be built on reliable, trustworthy, high-speed, affordable networks and services that safeguard consumers' fundamental rights to privacy and personal data protection while also encouraging innovation. This requires a strong, competitive and dynamic telecoms sector to carry out the necessary investments, to exploit innovations such as Cloud computing, Big Data tools or the Internet of Things. The market power of some online platforms potentially raises concerns, particularly in relation to the most powerful platforms whose importance for other market participants is becoming increasingly critical"'' (p. 9).]] ''"Telecoms operators compete with services which are increasingly used by end-users as substitutes for traditional electronic communications services such as voice telephony, but which are not subject to the same regulatory regime. The review of the telecoms rules will look at ways of ensuring a level playing field for players to the extent that they provide competing services and also of meeting the long term connectivity needs of the EU "'' (p. 10). See also [[On Rights and Competition. Citizen’s Rights and Business’ Rights in a Progressively More Immaterial World]]. ''"Although their impact depends on the types of platform concerned and their market power, some platforms can control access to online markets and can exercise significant influence over how various players in the market are remunerated. This has led to a number of concerns over the growing market power of some platforms. These include a lack of transparency as to how they use the information they acquire, their strong bargaining power compared to that of their clients, which may be reflected in their terms and conditions (particularly for SMEs), promotion of their own services to the disadvantage of competitors, and non-transparent pricing policies, or restrictions on pricing and sale conditions "'' (p. 11). ==Data Usability== ''"Big data, cloud services and the Internet of Things are central to the EU’s competitiveness. Data is often considered as a catalyst for economic growth, innovation and digitisation across all economic sectors, particularly for SMEs (and start-ups) and for society as a whole"'' (p. 14). [[TC6::''"The lack of open and interoperable systems and services and of data portability between services represents another barrier for the cross-border flow of data and the development of new services (...)"'' (p. 14).]] [[CC11::CC12::CC13::CC14::''"(C)ontracts often exclude, or severely limit, the contractual liability of the cloud provider if the data is no longer available or is unusable, or they make it difficult to terminate the contract. This means that the data is effectively not portable"'' (p. 14).]] ==Standardisation and Interoperability== ''"In the digital economy, interoperability means ensuring effective communication between digital components like devices, networks or data repositories. It also means connecting better along the supply chain or between industry and services sectors"'' (p. 15). ''" Today, there is a common understanding among Member States on the basic requirements to achieve interoperability, based on the "European Interoperability Framework" put forward by the Commission in 2010. This framework should now be updated and extended"'' (p. 15). ''"Currently, industry stakeholders decide 'bottom-up' in which areas to develop standards and this is increasingly taking place outside of Europe, undermining our long-term competitiveness. We need to define missing technological standards that are essential for supporting the digitisation of our industrial and services sectors (e.g. Internet of Things, cybersecurity, big data and cloud computing) and mandating standardisation bodies for fast delivery. In the digital economy, standard essential patents (standards that are based on patents as proprietary rights ) are an increasingly important feature in standardisation and an important element of the business model for many industries in terms of monetising their investment in research and innovation. The Commission advocates the need for a balanced framework for negotiations between right holders and implementers of standard essential patents in order to ensure fair licensing conditions. Moreover, availability of standards is often not sufficient to ensure interoperability, if existing standards are not integrate d by suppliers in their solutions. Public procurement plays an important role in promoting standards and Member States have created national catalogues of ICT-standards and interoperability specifications to guide public procurers and accelerate standards adoption on national markets. Integrating these catalogues into European catalogues would avoid market fragmentation at EU level"'' (p. 15).  +
Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions — Communication on future networks and the internet +[[CC8::TC4::Page 7: ''"EC competition rules (Articles 81 and 82 EC) will play a crucial role in preventing and removing anti-competitive conduct. These provisions allow tackling both abusive conduct of dominant network operators as well as co-ordinated conduct aimed at excluding other services or alternative operators from the market"''.]] [[CC8::Page 8: ''"Convergence is also leading to many different devices and services having to talk to one another. For instance, the proliferation of nomadic services requires networks, handsets, content protection and security applications that are interoperable. Most of the time, these issues are resolved by market mechanisms: the win-win of open interfaces and standards is that the market can grow for all. However, and this is particularly relevant in the presence of network externalities, dominant players may try to use proprietary standards to lock consumers into their products or to extract very high royalties from market players, ultimately slowing innovation and foreclosing market entry by new players"''.]]  +
Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions — Internet of Things: An action plan for Europe +IoT is not a mere extension of today's Internet but rather a number of new independent systems that operate with their own infrastructures (and partly rely on existing Internet infrastructures). IoT will be implemented in symbiosis with Internet of Services. IoT enables different modes of communication: things-to-things (including M2M), things-to-person. If this connections are established only in restricted areas, we have the Intranet of Things; if they are publicly accessible, we have the Internet of Things. IoT is not a monolith but an umbrella that covers a diverse range of technologies, systems and applications being developed on a constant basis. Europe should make the IoT an IoT for People. '''Right to silence of the chips''' = individuals should be able to disconnect from their networked environment at any time. See also [[Internet of Things – New security and privacy challenges]].  +
Communication from the Commission — Guidance on the Commission's enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings +This communication deals with article 102 TFUE, and reserves particular attention to those commercial practices identified as tying and bundling. ''20. The Commission will normally intervene under Article 82 where, on the basis of cogent and convincing evidence, the allegedly abusive conduct is likely to lead to anti-competi- tive foreclosure. The Commission considers the following factors to be generally relevant to such an assessment: — the position of the dominant undertaking: in general, the stronger the dominant position, the higher the likeli- hood that conduct protecting that position leads to anti-competitive foreclosure, — the conditions on the relevant market: this includes the conditions of entry and expansion, such as the existence of economies of scale and/or scope and network effects. Economies of scale mean that competitors are less likely to enter or stay in the market if the dominant under- taking forecloses a significant part of the relevant market. Similarly, the conduct may allow the dominant undertaking to ‘tip’ a market characterised by network effects in its favour or to further entrench its position on such a market. Likewise, if entry barriers in the upstream and/or downstream market are significant, this means that it may be costly for competitors to overcome possible foreclosure through vertical integration, — the position of the dominant undertaking's competitors: this includes the importance of competitors for the mainte- nance of effective competition. A specific competitor may play a significant competitive role even if it only holds a small market share compared to other competitors. It may, for example, be the closest competitor to the dominant undertaking, be a particularly innovative competitor, or have the reputation of systematically cutting prices. In its assessment, the Commission may also consider in appropriate cases, on the basis of information available, whether there are realistic, effective and timely counterstrategies that competitors would be likely to deploy, — the position of the customers or input suppliers: this may include consideration of the possible selectivity of the conduct in question. The dominant undertaking may apply the practice only to selected customers or input suppliers who may be of particular importance for the entry or expansion of competitors, thereby enhancing the likelihood of anti-competitive foreclosure. In the case of customers, they may, for example, be the ones most likely to respond to offers from alternative suppliers, they may represent a particular means of distributing the product that would be suitable for a new entrant, they may be situated in a geographic area well suited to new entry or they may be likely to influ- ence the behaviour of other customers. In the case of input suppliers, those with whom the dominant under- taking has concluded exclusive supply arrangements may be the ones most likely to respond to requests by customers who are competitors of the dominant under- taking in a downstream market, or may produce a grade of the product — or produce at a location — particularly suitable for a new entrant. Any strategies at the disposal of the customers or input suppliers which could help to counter the conduct of the dominant undertaking will also be considered, — the extent of the allegedly abusive conduct: in general, the higher the percentage of total sales in the relevant market affected by the conduct, the longer its duration, and the more regularly it has been applied, the greater is the likely foreclosure effect, — possible evidence of actual foreclosure: if the conduct has been in place for a sufficient period of time, the market performance of the dominant undertaking and its competitors may provide direct evidence of anti-competitive foreclosure. For reasons attributable to the allegedly abusive conduct, the market share of the dominant undertaking may have risen or a decline in market share may have been slowed. For similar reasons, actual competitors may have been marginalised or may have exited, or potential competitors may have tried to enter and failed, — direct evidence of any exclusionary strategy: this includes internal documents which contain direct evidence of a strategy to exclude competitors, such as a detailed plan to engage in certain conduct in order to exclude a competitor, to prevent entry or to pre-empt the emergence of a market, or evidence of concrete threats of exclusionary action. Such direct evidence may be helpful in interpreting the dominant undertaking's conduct.'' '''B. Tying and bundling''' ''47. A dominant undertaking may try to foreclose its competitors by tying or bundling. This section sets out the circum- stances which are most likely to prompt an intervention by the Commission when assessing tying and bundling by dominant undertakings.'' [[CC8::TC2::TC3::TC4::''48. ‘Tying’ usually refers to situations where customers that purchase one product (the tying product) are required also to purchase another product from the dominant undertaking (the tied product). Tying can take place on a technical or contractual basis.'']] ''‘Bundling’ usually refers to the way products are offered and priced by the dominant undertaking. In the case of pure bundling the products are only sold jointly in fixed proportions. In the case of mixed bundling, often referred to as a multi-product rebate, the products are also made available separately, but the sum of the prices when sold separately is higher than the bundled price.'' [[CC8::TC2::TC3::TC4::''49. Tying and bundling are common practices intended to provide customers with better products or offerings in more cost effective ways. However, an undertaking which is dominant in one product market (or more) of a tie or bundle (referred to as the tying market) can harm consumers through tying or bundling by foreclosing the market for the other products that are part of the tie or bundle (referred to as the tied market) and, indirectly, the tying market.'']] [[CC8::TC2::TC3::TC4::''50. The Commission will normally take action under Article 82'' [art 102 TFEU: n.d.r.] ''where an undertaking is dominant in the tying market and where, in addition, the following conditions are fulfilled: (i) the tying and tied products are distinct products, and (ii) the tying practice is likely to lead to anti-competitive foreclosure.'']] '''(a) Distinct products''' ''51. Whether the products will be considered by the Commission to be distinct depends on customer demand. Two products are distinct if, in the absence of tying or bundling, a substantial number of customers would purchase or would have purchased the tying product without also buying the tied product from the same supplier, thereby allowing stand-alone production for both the tying and the tied product. Evidence that two products are distinct could include direct evidence that, when given a choice, customers purchase the tying and the tied products sepa- rately from different sources of supply, or indirect evidence, such as the presence on the market of undertakings specia- lised in the manufacture or sale of the tied product without the tying product or of each of the products bundled by the dominant undertaking, or evidence indicating that undertakings with little market power, particularly in competitive markets, tend not to tie or not to bundle such products.'' '''(b) Anti-competitive foreclosure in the tied and/or tying market''' ''52. Tying or bundling may lead to anti-competitive effects in the tied market, the tying market, or both at the same time. However, even when the aim of the tying or bundling is to protect the dominant undertaking's position in the tying market, this is done indirectly through foreclosing the tied market. In addition to the factors already mentioned in paragraph 20, the Commission considers that the following factors are generally of particular importance for identifying cases of likely or actual anti-competitive foreclosure.'' [[TC2::TC3::TC4::''53. The risk of anti-competitive foreclosure is expected to be greater where the dominant undertaking makes its tying or bundling strategy a lasting one, for example through technical tying which is costly to reverse. Technical tying also reduces the opportunities for resale of individual components.'']] ''54. In the case of bundling, the undertaking may have a dominant position for more than one of the products in the bundle. The greater the number of such products in the bundle, the stronger the likely anti-competitive foreclosure. This is particularly true if the bundle is difficult for a competitor to replicate, either on its own or in combination with others.'' ''55. The tying may lead to less competition for customers interested in buying the tied product, but not the tying product. If there is not a sufficient number of customers who will buy the tied product alone to sustain competitors of the dominant undertaking in the tied market, the tying can lead to those customers facing higher prices.'' ''56. If the tying and the tied product can be used in variable proportions as inputs to a production process, customers may react to an increase in price for the tying product by increasing their demand for the tied product while decreasing their demand for the tying product. By tying the two products the dominant undertaking may seek to avoid this substitution and as a result be able to raise its prices.'' ''57. If the prices the dominant undertaking can charge in the tying market are regulated, tying may allow the dominant undertaking to raise prices in the tied market in order to compensate for the loss of revenue caused by the regulation in the tying market. 58. If the tied product is an important complementary product for customers of the tying product, a reduction of alterna- tive suppliers of the tied product and hence a reduced avail- ability of that product can make entry to the tying market alone more difficult.'' '''(c) Multi-product rebates''' ''59. A multi-product rebate may be anti-competitive on the tied or the tying market if it is so large that equally efficient competitors offering only some of the components cannot compete against the discounted bundle.'' ''60. In theory, it would be ideal if the effect of the rebate could be assessed by examining whether the incremental revenue covers the incremental costs for each product in the domi- nant undertaking's bundle. However, in practice assessing the incremental revenue is complex. Therefore, in its enfor- cement practice the Commission will in most situations use the incremental price as a good proxy. If the incremental price that customers pay for each of the dominant underta- king's products in the bundle remains above the LRAIC of the dominant undertaking from including that product in the bundle, the Commission will normally not intervene since an equally efficient competitor with only one product should in principle be able to compete profitably against the bundle. Enforcement action may, however, be warranted if the incremental price is below the LRAIC, because in such a case even an equally efficient competitor may be prevented from expanding or entering.'' ''61. If the evidence suggests that competitors of the dominant undertaking are selling identical bundles, or could do so in a timely way without being deterred by possible additional costs, the Commission will generally regard this as a bundle competing against a bundle, in which case the relevant question is not whether the incremental revenue covers the incremental costs for each product in the bundle, but rather whether the price of the bundle as a whole is predatory.'' '''(d) Efficiencies''' [[CC8::TC2::TC3::TC4::''62. Provided that the conditions set out in Section III D are fulfilled, the Commission will look into claims by dominant undertakings that their tying and bundling practices may lead to savings in production or distribution that would benefit customers. The Commission may also consider whether such practices reduce transaction costs for custo- mers, who would otherwise be forced to buy the compo- nents separately, and enable substantial savings on packa- ging and distribution costs for suppliers. It may also examine whether combining two independent products into a new, single product might enhance the ability to bring such a product to the market to the benefit of consu- mers. The Commission may also consider whether tying and bundling practices allow the supplier to pass on effi- ciencies arising from its production or purchase of large quantities of the tied product.'']] For an example of technical tying, see [[Regulation and the Internet of Things]], p. 24.  +
Competition Policy: Theory and Practice +==After-Markets (or Secondary Markets)(pp. 111-113)== An after-market is a market in which there exist primary and secondary products: for example, in the market of carsm we have a primary product, which is the car, and secondary products, which are spare parts; in the market of washing machines, we have the washing machine, which is the primary product, and the technical assistance, which is the secondary product. ''"Often, a certain type of secondary product is designed for and can fit only a certain brand of the primary product"'' (p. 111): <u> in cases like that, we can say that the secondary product has been technically tied to the primary product.</u> This technical tying might result in a dominant position of the maker company in the secondary market, even if its position in the primary market is weak. In fact, consumers that have already purchased the primary product can't acquire the secondary ones from third parties. However, in order to recognise a dominant position of the company in the secondary market when its position in the primary market is weak, there is need for qualifying the secondary market as separated from the primary one: in fact, if the secondary products ''"at hand are sufficiently important for the overall expected cost of the product, and there are a sufficient number of buyers who will take it into account"'', the maker company won't find useful to raise prices of the secondary product, and therefore the two markets should be considered as a single one (p. 111). Some useful criteria in order to identify if the two markets must be considered together or not are: * ''"whether the price of the secondary product at issue is a considerable proportion or not of the price of the primary product"'' (pp. 111-112); * the probability of <u>need</u>/replacement of the secondary product (p. 112); * the nature of buyers: consumers are less informed about the expected cost of secondary products than professional customers (p. 112). Some well-known cases concerning after.markets are: * the ''Kodak'' case, by the US Supreme Court: the ''"Court defined the market in a narrow way, as the secondary market for spare parts and services of Kodak photocopiers"'' (p. 112); in this way, it was easy to identify Kodak as a company in dominant position; * ''[[Hugin v. Commission]]'', by the European Commission: ''"the market was defined as the UK market for spare parts of the cash registers manufactured by Hugin, a Swedish company that was found dominant although it had only 13% of the UK market for cash registers"'' (p. 112); * ''[[Pelikan v. Kyocera]]'', by the European Commission: Kyocera was a producer of printers for computers, and it was accused of abuse of dominant position in the market for secondary products of its printers; in this case, however, the EC ''"rejected the complaint since it found that consumers took into account the prices of the secondary products (that accounted for an important part of the cost of the life-time purchase of a printer) when buying the primary product, and that there was significant competition in the market for printers"''(pp. 112-113). See also [[Competition/Antitrust Challenges in Technology Aftermarkets]].  +
Competition/Antitrust Challenges in Technology Aftermarkets +<i>"In [[Pelikan v. Kyocera]] (1995) [...], Pelikan claimed that Kyocera was dominant in the market for Kyocera-compatible toner consumables. Kyocera, however, had no significant market power in the relevant printer market. In rejecting Pelikan’s claim, the Commission concluded that the printer market and the consumables market were a single market, as competition in the printer market (the primary market) resulted in effective discipline in the consumables market (the secondary market). In particular, the Commission noted that: (i) consumers were able to make an informed choice, including life-cycle pricing, and (ii) a sufficient number of customers would alter their purchasing behaviour in the primary market in the event of an apparent policy of exploitation in the secondary market. This was because the capital cost of buying a new printer and switching to another make was low."</i> See also [[Competition Policy: Theory and Practice]]. <i>"The EU cases show that the Kodak principles are alive and well and actively adhered to by EU and national competition regulators. ISOs [independent service organizations] are unlikely to prevail in any case in the EU if they are unable to prove that purchasers are locked into proprietary equipment through high switching costs and an inability to determine whole life cost at time of purchase. However, from the EU cases, you can deduce certain types of equipment which are more likely to ground successful ISO claims: * Equipment with high capital acquisition costs which will make switching costs punitive (Digital)."</i> But <i>"[e]quipment like printers and photocopiers are likely to be seen as low value items unlikely to inhibit switching (Pelican/Kyocera). * Equipment for which the manufacturer is ceasing to produce a new version and will be exiting the primary market, likely removing the manufacturer’s incentive to price competitively in secondary markets (Synstar/ICL). In contrast, the beneficial treatment accorded to aftermarket restrictions in purchase contracts under US antitrust laws is unlikely to be well received in the EU. Such clauses are likely to be seen as contractual tying obligations which are likely to infringe Article 101(1) TFEU. These clauses are likely to be condemned as unlawful, even if the parties are not in a dominant position and notwithstanding the fact the customer may at the time of purchase agree to the lock in."</i>  +
Creating Ubiquitous Computing, Virtual Worlds, and the Displacement of Property Rights +==Illustration of "ubiquitous computing"== Ubiquitous computing (sometimes called pervasive computing: p. 99, or internet of things: p. 103) is the third paradigm of computing (after the mainframe and the personal computer: p. 93): it can be defined as '""nothing less the colonization of everyday life by information technology"'' (p. 99, definition by Adam GREENFIELD). In fact, ''"the computer leaves its isolated box and its limited connectivity"'', to become ''"embedded throughout the physical world""'' and ''"expansive, if not universal, in its connectivity"'' (p. 93). ''"Perhaps the best way to describe ubiquitous computing is to describe aspects of it. In a ubiquitous computing paradigm, computing functionality is embedded and mobile in an environment of universal connectivity that produces a high level of automation"'' (p. 103). Therefore, the main traits of ubiquitous computing are embeddedness (computing functions become universally available; invisibility is one of the goals of embeddedness: ubiquitous computing becomes commonplace and unremarkable), mobility (we can take computers with us wherever we go, or we always have access to computing capabilities and of our own data), capability of functioning autonomously as well as through conscious user control, "virtualization" of objects (objects are made recognizable and computer readable), <u>interconnection</u> (we have ''"networks of miniaturized, wirelessly interconnected, sensing, processing, and actuating computing elements kneaded into the physical world"'': p. 107) (pp. 104-107). Summarizing, ''"[u]biquitous computing [...] envisions computers that are embedded throughout the physical environment, that can communicate with each other, and that can monitor their surroundings and respond in dynamic, "intelligent" ways"'' (p. 108). ==Ubiquitous computing and personal property rights== ''"[O]ne legal consequence of the rise of ubiquitous computing may be the displacement of property rights as a rights ordering system"'' (p. 92). In fact, it is really probable that the future development of ubiquitous computing - through its capability of remotely monitoring and controlling physical objects (which ''"gives someone other than the possessor of an object the ability to monitor and control the use of that object"'': p. 125) - will enable interference with the exercise of personal property rights (and even enable their redistribution) (pp. 92-94). But what are the prerogatives traditionally associated with personal property rights? * The right to use and enjoy: it have rarely been explored, probably because in the past restrictions on it are practically difficult to implement in a non-connected world, and therefore there was no necessity to examine this kind of restrictions. Today, with the emergence of the ubiquitous computing world, the role of these prerogatives should be examined, and BOONE suggests to ''"look at the detriment to the reduction in rights of use and enjoyment"'' by looking ''"at its effect on personal autonomy"'': in fact, the increased ability of remote monitoring and control might lead to a decrease in personal autonomy: in a pre-ubiquitous world, there was a ''"very limited ability for the rest of the world to act in the individual's space""''(p. 150). This perspective is a perspective focusing on the personality theory of property rights (p. 151). * The right of alienation: it ''"is frequently cited as a longstanding right at the heart of property since the transition away from feudalism"''; however, even if restraints on alienation have been strongly disfavoured, little discussion can be found about the value of this prerogative (p. 149). Ubiquitous computing distances property rights from their traditional configuration: ''"the exercise of the personal property right to use and to the quiet enjoyment of property"'' is obstructed by the monitor and control ability of the provider over the use of the object by the purchaser (p. 96) (obviously, restrictions on use of personal property have always existed, but normally they don't concern a particular individual object, and they are generally imposed by the government, not by the provider: pp. 95-96). As a consequence of this remote monitoring and control ability of the provider (technology), and of its strengthening by contractual terms (indeed, when technology alone is not sufficient for the provider in order to reserve to himself the control over the items commercialized, control can be obtained summing up i. the monitoring ability with ii. a contractual scheme; moreover, the information technology present in the environment of ubiquitous computing makes the formation of contract easier: think about click-wrap and click-through contracts: p. 125), personal property rights may become a privately ordered system (p. 96). It is true that the interference with property rights might have happened also in a non-ubiquitous-computing world simply through contract (<u>but what I wonder is if such interference could be ''per se'' legitimate: if property is transferred, are restriction on use and enjoyment and alienation lawful? or, if property is transferred but intermediation of the provider is necessary in order to enjoy it, can we consider a transfer of ownership possible (see [[Il Cloud Computing: alla Ricerca del Diritto Perduto nel Web]])? and if property is retained by the provider, is this retention lawful when the customer has paid a lump-sum and doesn't have to return the object? or can we state that the fact that the ability of the provider to remotely disable the object is the equivalent of the object returning?</u>), but the retention of property rights not accompanied by the retention of possession makes these restrictions easy to be violated without the provider being aware, and therefore the provider didn't have in the past the incentive to restrict the property rights to use and enjoy the items commercialized (p. 128). <u>In the precedent paragraph we have dealt with '''"possession"''', implicitly saying that with the ubiquitous computing retention of the property rights by the provider can be accompanied by retention of the possession. This means that ubiquitous computing may change the possessor of an object: it is no more the one who handles it materially, but the one that can make it enjoyable. BOONE, at p. 130, implicitly contradicts this, saying that ''"ubiquitous computing technology may give the producer of the object the ability to act on that conflict to the possessor's detriment""'', but we can imagine that, in this occasion, he has only made an improper use of the term "possessor", using it as a synonym for "customer". In fact, later in the article (p. 151), he says that ubiquitous computing ''"may [...] force us to reexamine what possession means"''.</u> He cites Oliver Wendell Holmes's definition of possession: ''""To gain possession, then, a man must stand in a certain physical relation to the object and to the rest of the world, and must have a certain intent [...]. The physical relation to others is simply a relation of manifested power coextensive with the intent". In further describing the necessary physical relation, Holmes said "there must be a certain degree of power over the object". The requisite intent for possession, in Holmes's account, was "an intent to exclude others"."'' BOONE continues saying that ubiquitous computing impacts both aspects of possession, because the ability to control and exclude and the physical proximity become separated. <u>My remarks are the following. Firstly, the intent to exclude may remain in the hands of the customer, particularly when he is unaware of the provider's powers over the object; so, the problem concerns essentially the corpus possessionis, not the animus possidendi. Secondly, it is not clear if BOONE is saying that the notion of possession should be reconfigured in order to fit to today's customers, which have physical proximity but not the ability to control ans exclude (at least, not entirely, I add), or if the possession shifts to the provider. In my opinion, the advent of ubiquitous computing should drive us to recognise that the possession belongs partly to the customer and partly to the provider, and the latter's is an "horizontal possession", in the sense that the provider has a power over the object (obviously combined with an intention to exclude: therefore, if potentially a remote power of monitoring and control exists, but it derives from technologies adopted for other purposes, e.g. in order to remotely disable a stolen device, we may say that - despite the material power the provider ''could'' exercise over the object - he has no possession over it) which doesn't enable his fruition of it, but simply may prevent the exercise of the "vertical possession" by the customer, and which can therefore create a tragedy of anticommons (particularly when the value chain that makes the IoT product usable is composed by different actors: a device provider, a network provider, a platform provider, and an application provider: see [[Overview of the Internet of Things — Recommendation]]; see also [[Essay: A Transactional View of Property Rights]], pp. 42-43). Moreover, the advent of ubiquitous computing should lead us to coin a new term in order to define the physical proximity the customer has with the object (i.e. his material handling of the IoT good), in order to not confuse it with the possession of the object, which is shared with the provider.</u> A television commercial for cellular telephone service well highlighted this shift, through the metaphor of a group of children, each of whom is playing with a ball: a woman enters and asks them how many minutes each of them is going to use the ball each month, warning them to be careful, because if they say too few, they will have to pay overage charges, and if they say too many , they will waste money (p. 95). <u>This is exactly what the Battery Hiring Agreement for the [[Renault Zoe]] states: customers have to establish how many km they will cover in the next year, and, if they exceed, they have to pay overage charges.</u> Another good representation of this shift is the artwork by Steve MANN titled ''SeatSale'': it is a chair which requires periodic license agreement in order to be able to sit in it; if the license agreement expires without having been renewed, several metal spikes would come up from the chair's seat, making the chair unusable (p. 127): it is an example of a combination of contract and technological control that interferes with the exercise of property rights (p. 128). <u>Here also we can find an analogy with the [[Renault Zoe]]: if the hiring fees for the battery are not paid, the provider can prevent the car from recharging.</u> There can also be combination between monitoring and contract (p. 128): <u>the use of the good by the customer is monitored and, if uses non-authorized by the contract are made, the customer can be sued</u>; an example may be lotus Elise sports car, which is equipped with an engine control unit which records data about usage of the car, and this data has been used by the manufacturer also to void warranty when the car has been misused by the customer (pp. 146). Technical means can also be used alone, for example to prevent a car from exceeding to allowed speeds (p. 128): in this case, we may have no remote control or monitoring, but simply an object which acts in an autonomic way, which anyway subtracts use ability to the customer (p. 146). Another example given by BOONE concerns inkjet printer cartridges (they are a good example of how this possibility of remote control is often incorporated by providers in their business models): printers are sold at low prices because remuneration comes from the higher cost of cartridges; and therefore this business model is implemented only if the provider can prevent customer from using third party cartridges and to refill them, and, more generally, if they can ensure a revenue from the commercialization of the cartridges: so cartridges can have an expiration date, or can print only a limited number of pages; providers may use internet connectivity to monitor usage of printers; contracts are also used to control customers' use of the cartridges (the "not intended for refill" statement written on the package may in the future become a click-through license and therefore cease to pose doubts on its binding nature) (pp. 147-148). Another example is the one of Microsoft Xbox consoles: Microsoft's online gaming services for "Halo 2" have been linked to a system to monitor Xbox already sold (<u>something similar already happened on consoles at the moment of updates</u>): if modifications of the consoles by purchasers are discovered, users are banned from play on Xbox Live, and therefore many features of Halo 2 become not accessible. Therefore ubiquitous computing can be used also to control after-market use of products (p. 148). Considering the new possibilities of remote monitoring and control of objects allowed by ubiquitous computing, we should wonder if the the traditional personal property rights enjoyed by the owner of an object provide some benefits to society, or if they are only contingent consequences of the fact that - in the past - the possibility of remotely control the items sold didn't exist (p. 98). Or, to put in another way: are the traditional property rights important enough to override freedom of contract? (p. 149) Or, even: can private ordering being preferred to public ordering? (p. 152) In order to answer to the last questions, we have to consider that: * a pure private ordering system couldn't exist in the past, because enforcement of what privately established always required public intervention; however, with the technological control and monitoring enabled by ubiquitous computing, this statement should be revised (p. 152); * private ordering systems may show some positive aspects: ** the ability to practice effective price discrimination (p. 152): price discrimination increases welfare, because different prices can be set for users that place different values on the object (p. 153); ** the possibility ''"for an individual to pay only for the uses desired rather than having to pay for all possible uses or for having to pay for ownership when only use for a limited time is desired. In other words, the pre-ubiquitous practical reality that all use of, and control over, a physical object passed to the possessor may be a market inefficiency"'' (p. 153) (see also [[The Zero Marginal Cost Society]] and [[Internet of Things — Preliminary Report 2014]], p. 7). * potential negative consequence may flow from an increased private ordering and the loss of potential benefits derived from public ordering (p. 153). <u>We should examine the theories justifying traditional property rights and verify if a privately ordered system may lead property rights to no more ensure the benefits that those theories sustain property brings. Another positive aspect of property rights is that they can overcome the problem of ''contractual incompleteness'' (see [[Essay: A Transactional View of Property Rights]]).</u> Another possible approach to examine the question is to examine the reasons of the numerus clausus of property rights: ''"[i]ndividualized variations, often termed "fancies", have been strongly disfavored"'', and one reason might be that numerus clausus reduces information costs (<u>see [[Personal Property Servitudes on the Internet of Things]]</u>) (p. 154). Another possible approach should be the examination of ''"existing legal arrangements that are hybrids of contract and property law: for example, bailment and leases. [...I]n these systems, a possessor's rights [...] are no longer detrmined by property law alone, but rather by property law mixed with contract"'' (p. 154) (see [[RFID and Other Embedded Technologies: Who Owns the Data?]]. ==The analogy with the virtual worlds== A situation similar to the one existing in the ubiquitous computing context can be found in virtual worlds (worlds embedded entirely within computers: p. 108) (p. 101). Indeed, ubiquitous computing is sometimes called as "embodied virtuality" (pp. 101 and 115): <u>in fact, with ubiquitous computing, digital world features become part of the real world thanks to computer mediation, and so ubiquitous computing can be seen as the physical embodiment of digital world features</u> (think about, e.g., data collection: the same information collection possibilities that exist in the online world are now available, thanks to ubiquitous computing, in the physical world: p. 119). ''"Ubiquitous computing spreads interconnected computing ability throughout the physical world. In contrast, virtual worlds attempt to put the physical world inside a computer"'' (p. 131). The point the two worlds have in common is the fact of being both ''"mediated by computing ability"'' (p. 108). Think about the virtual world objects: they are ''"essentially code"'': ''"The files that code for the virtual world objects are, in most cases, located on the player's computer. However, the player’s avatar cannot use or control the object unless authorized [...] by controllers of the virtual world"'' (p. 114); ''"if a player wishes to act on an object in the virtual environment through his avatar, the computing system underlying the virtual world must be able to sense that action and have the virtual world object respond in a dynamic and intelligent manner"'' (p. 117). <u>Therefore, we have a "good" (the computer file) in the hands of the customer, but which can't be enjoyed without the authorization and collaboration of the provider: exactly like it happens in the IoT world.</u> It exists a market in the real world for the virtual objects existing in those virtual worlds. The emergence of this market has raised the questions of the existence or not of property rights on those objects (in the financial world, it is said that anything that someone will pay money for is property; <u>and Robert P. MERGES says that ''"the contours of property rights change over time [...] when economic assets become more valuable"'': it is in those circumstances that property rights are more tightly specified: see [[Essay: A Transactional View of Property Rights]], p. 4</u>; however, in the legal world people may ask if virtual world objects can be subject to property rights: p. 131), and of the belonging of those property rights (p. 97). For what concerns the possibility of property rights on virtual world objects, the Locke's labor theory (because of the effort players invest in obtaining those objects), the Bentham's utilitarian theory (recognizing such rights creates the greatest good for the greatest number, given the number of players, the amount of time spent in the virtual world ant the magnitude of money transfers), and the personality theory (''"the recognition of property rights helps the self to be realized by protecting human rights such as liberty, identity, and privacy"''; and ''"virtual worlds naturally facilitate the projection of identity into the virtual space through the avatar"'': p. 137) all justify the existence of property rights (pp. 135-137). <u>So, I can answer my previous question - "If property is transferred but intermediation of the provider is necessary in order to enjoy it, can we consider a transfer of ownership possible (see [[Il Cloud Computing: alla Ricerca del Diritto Perduto nel Web]])?" - analysing the theories justifying the existence of property rights.</u> Professor Joshua FAIRFIELD also underlines that the rivalrous character of virtual world objects plays for the recognition of property rights: property rights can therefore provide incentives for their productive use (pp. 137-138) (<u>see also [[Personal Property Servitudes on the Internet of Things]], where I comment that software in the IoT world becomes rivalrous, i.e. obtains the same characteristics of the ''corpora mechanica'' of the analogical world</u>). However, property right should be allocated not as "horizontal property rights" (which are not ''per se'' useful, but which simply cut across vertical rights, therefore leading to a tragedy of the anticommons, because the virtual resources are divide up between to many users), but as "vertical property rights" (which permit the property to be used as a whole) (pp. 138-139). <u>Well, we can say that personal property rights as a privately ordered system create horizontal rights of the provider, which are not useful by themselves, but which simply obstruct the enjoyment of the IoT products by the customer (see [[Personal Property Servitudes on the Internet of Things]], pp. 50-52, where it is said that the choice of how to use a chattel should remain with its [material] possessor, and not with the provider, because the former has better information and the latter has no interest in reaching an optimal result).</u> If property rights can exist on virtual world objects, it remains the problem to establish whom they belong to: to the provider or to the customer? <u>Dealing with this problem, BOONE highlights the contractual and technological limitations that virtual world controllers establish on players' enjoyment of the virtual world objects: and these restrictions are really similar to the ones imposed by the providers of IoT products to their customers</u>: * by contract, they deny players' property rights on virtual world objects, or they alter traditional property rights by establishing restrictions on enjoyment and prohibitions of further transfers (p. 140); * they use, in order to do so, an EULA: the assent of the player is given by a simple click of the mouse (no negotiation); the EULA can be modified over time, and player's subsequent logging into the world means that he accepts such modifications (<u>dynamic property rights</u>), and, because such logging is necessary in order to use the object, this acceptance of modifications becomes nearly mandatory (pp. 140-141) (<u>in the IoT world, the same happens because the ToS can change over time, and to accept those changes it is sufficient to access the services: and, because of the fact that - in order to use the good - access to the service is necessary, the sole tool the customer has to refuse the modifications is to cease using the good</u>); * technology makes the conclusion of those contracts easy for the controller and devoid of awareness for what concerns the player (p. 141); * technology enables provider's remote control of the use of the virtual world object, independently from the fact that the player may have a property right on the object itself: the controller may remove objects from an account or cancel accounts; they may implement practices as "soul-binding" (the object is linked to a single avatar and cannot be transferred; <u>in the IoT world, it happens when an object - e.g. the Google Glass - can be linked to a single account) or "nerfing" (the functional characteristics of a virtual world object are changed when it passes into the hands of avatars; <u> in the IoT world, something similar happens when an object can be transferred from a person to another, but the need to create a new account in order to use it makes the object deprived of all knowledge acquired during the previous utilization; even if, in this case, privacy concerns may justify this attitude</u>) (pp. 141-142). So, in a virtual world, players' property rights on objects ''"are determined not by traditional property rules, but by a private system defined by contract and by computer code"''. The same may happen in the future in the ubiquitous computing world (p. 142).  +
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