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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 +''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.''  +, ''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.''  +, ''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.''  +,


Digital Consumers and The Law. Towards a Cohesive European Framework +<u>So, about interoperability: if information isn't provided about lack of interoperability because of standard/format incompatibility or because of TPMs, it is a violation of information obligation according to CRD and a non-conformity of the product according to Consumer Sales Directive; if information is provided, and it is provided in a way that makes consumer's legitimate expectations of interoperability (we may question if an information provided in a way that can't make the consumer's legitimate expectations fall allows the applicability only of the Consumer Sales Directive or also of the CRD, seen that – in the latter – the burden of proof of the compliance with the information requirements belongs to the trader, but it is unclear if he has to prove only the formal satisfaction of the requirement or also the effectiveness of the information provided), these Directives can't help, but the UCP Directive and competition law perhaps can.</u>  +, '''''DIRECTIVE 2011/83/EU on consumer rights (Consumer Rights Directive).''''' Recital 19: ''“Digital content means data which are produced and supplied in digital form, such as computer programs, applications, games, music, videos or texts, irrespective of whether they are accessed through downloading or streaming, from a tangible medium or through any other means. Contracts for the supply of digital content should fall within the scope of this Directive. If digital content is supplied on a tangible medium, such as a CD or a DVD, it should be considered as goods within the meaning of this Directive. Similarly to contracts for the supply of water, gas or electricity, where they are not put up for sale in a limited volume or set quantity, or of district heating, contracts for digital content which is not supplied on a tangible medium should be classified, for the purpose of this Directive, neither as sales contracts nor as service contracts. For such contracts, the consumer should have a right of withdrawal unless he has consented to the beginning of the performance of the contract during the withdrawal period and has acknowledged that he will consequently lose the right to withdraw from the contract. In addition to the general information requirements, the trader should inform the consumer about the functionality and the relevant interoperability of digital content. The notion of functionality should refer to the ways in which digital content can be used, for instance for the tracking of consumer behaviour; it should also refer to the absence or presence of any technical restrictions such as protection via Digital Rights Management or region coding. The notion of relevant interoperability is meant to describe the information regarding the standard hardware and software environment with which the digital content is compatible, for instance the operating system, the necessary version and certain hardware features. The Commission should examine the need for further harmonisation of provisions in respect of digital content and submit, if necessary, a legislative proposal for addressing this matter.”'' Art. 5(1): ''“Before the consumer is bound by a contract other than a distance or an off-premises contract, or any corresponding offer, the trader shall provide the consumer with the following information in a clear and comprehensible manner, if that information is not already apparent from the context: (...) (g) where applicable, the functionality, including applicable technical protection measures, of digital content; (h) where applicable, any relevant interoperability of digital content with hardware and software that the trader is aware of or can reasonably be expected to have been aware of.”''  +


How Smart, Connected Products Are Transforming Competition +Open or closed system? In the IoT world, we often have ''"systems encompassing multiple products"''. If the firm chooses a closed system, this approach is normally aimed to have customers purchase the entire system from it (<u>technical tying</u>): ''"(k)ey interfaces are proprietary, and only chosen parties gain access"''. If, on the contrary, an open system is chosen, the end customer is enabled to assemble the parts of the solution (both the products involved and the platform that ties the system together) from different companies: ''"the interfaces are open and standardized, allowing outside players to create new applications"''. ''"Closed systems create competitive advantage by allowing a company to control and optimize the design of all parts of the system relative to one another. The company maintains control over technology and data as well as the direction of development of the product and the product cloud. Producers of system components are restricted from accessing a closed system or are required to license the right to integrate their products into it. A closed approach may result in one manufacturer’s system becoming the de facto industry standard, enabling this company to capture the maximum value. A closed approach requires significant investment and works best when a single manufacturer has a dominant position in the industry that can be leveraged to control the supply of all parts of the smart, connected product system"''. ''"A fully open system enables any entity to participate in and interface with the system. The open approach enables a faster rate of applications development and system innovation as multiple entities contribute. It can also result in a de facto industry standard, but one from which no company gains a proprietary benefit"'' (Philips Hue light bulb is an example). When we have systems of systems, it is difficult to maintain a complete closed system, because often one firm doesn't have the capability of managing the entire system of systems: therefore, her we have firms (for example Whirpool) that try to maintain control on its product features, but enable those products to connect with other systems: hybrid approach.  +