Some of our older readers might recall the TV show “The X-Files”, in which the two FBI agents Scully and Mulder deal with unsolved cases called the X-Files. These cases always had a kind of mystical touch. Not mystical at all is the GAIA-X initiative, in which governments and companies work to design the next generation of a federated European data infrastructure. Recently, the German Bundeskartellamt gave green light for the establishment of a data network for the automotive industry, called Catena-X. This post explores the background of the GAIA-X initiative, its relation to antitrust law and the recent Bundeskartellamt decision.
What is GAIA-X?
The key idea behind the project is to create an independent data infrastructure in Europe, with the goal to become independent from non-European providers by creating “a trustworthy, secure and transparent data infrastructure that can be used to exchange and process data”. Companies should be able to rely on GAIA-X in order to develop and produce innovative products. However, GAIA-X will not be set up to compete with existing systems, but rather to offer an ecosystem with open interfaces and standards which enables users to collect, aggregate and exchange data. For the keener readers, the German Ministry of Economic and Climate Protection (BMWK) offers a very detailed FAQ on GAIA-X.
Understood, but I thought I was reading an antitrust blog
You are right. But as a loyal reader of this blog, you already had to learn in the past that data and antitrust are inseparable
in the future now (and unlike with marriage, divorce is probably not an option). In the context of GAIA-X, however, the issue is one that has always preoccupied antitrust lawyers: The cooperation of companies, even competitors, in various areas. The objectives to be pursued with GAIA-X can namely only be achieved through the cooperation of companies. In addition to the many cases in which cooperation between companies is permissible, however, the limits set by antitrust law also apply in the context of GAIA-X. In this respect, the question also arises here as to where the line is drawn between cooperation admissible under antitrust law and unlawful coordination.
What is Catena-X about?
Catena-X calls itself the “first integrated, collaborative, open data ecosystem for the automotive industry of the future”. Currently, Catena-X has 96 members across industries from all sectors along the supply chain – from small and medium-sized enterprises to OEMs, suppliers, equipment manufacturers, research institutions, NGOs and associations. Founding members include BASF, BMW, Deutsche Telekom, Henkel, Mercedes-Benz, Robert Bosch, SAP, Schaeffler, Siemens AG, ZF Friedrichshafen and Volkswagen.
The goal of the collaboration is, on the one hand, to bring together previously independent data sets from individual companies in a data exchange system, in order to make the best possible use of them. On the other hand, concrete applications are to be developed on the basis of these data sets. According to the Bundeskartellamt, those applications include, for example, projects that facilitate the traceability of components or enable the determination of the CO2 footprint of components along the value chain.
What did the Bundeskartellamt say about this?
The Bundeskartellamt had no objections to the cooperation and even expressly welcomed it. It examined two aspects of the cooperation: the agreement to set certain standards, and individual R&D activities.
The Bundeskartellamt emphasized that R&D cooperations which do not aim at jointly exploiting the results generally only have anticompetitive effects if competition in innovation is appreciably reduced (which, according to the Bundeskartellamt, was not the case here). However, it also emphasized that certain principles are important for such cooperations (attention, here again old acquaintances appear – but neither Scully and Mulder nor aliens):
- Any standards must be developed in an open, transparent and non-discriminatory process. This means that, in particular, third parties are allowed to participate in the standard-setting process, compliance with the standard is not mandatory, and access to the standard is provided on fair, reasonable and non-discriminatory terms.
- Individual development cooperations must not lead to market foreclosure or other distortions of competition, in particular with regard to innovation competition.
- Exchange of competitively sensitive information must be limited to what is absolutely necessary for the cooperation.
The Bundeskartellamt stressed that it will accompany the cooperation and examine additional individual projects with regard to their compliance with antitrust law.
So, no aliens?
No, to solve the case no extra-terrestrial forces have to be involved. Rather, well-known and established principles of antitrust law regarding the cooperation of companies are sufficient. The case also shows that cooperations, which are encouraged by governments, must also comply with the usual standards of antitrust law. The companies involved seem to have succeeded in this. It remains to be seen which use-cases the Bundeskartellamt will have to investigate in the future. There may be cases that appear more difficult from an antitrust perspective, but for each case the X-Files motto applies: “the truth is out there.”
[Photo by Andrej Lišakov on Unsplash]