Neelie Kroes gets it: Standards are the foundation of interoperability.

by Rick Jelliffe

European Commissioner for Competition Policy Neelie Kroes gave a really interesting talk this week at OpenForum Europe: sounds like a breakfast that would have been very stimulating.

There some very obvious tough talk directed at Microsoft, she is the person with the stick rather than the carrots after all, and most of the commentary I have seen have focussed on that. But there was a few other points that I found interesting with respect to comments I have been making.

Standards for market dominating technologies

Readers may remember that I have been pushing that All Interface Technologies by Market Dominators should be QA-ed, RAND-z Standards! By interface technologies I mean the boundary or exposed technologies: protocols, APIs, file formats.

Dr Kroes writes about so-called de facto standards:
First, the de facto standard could be subject to the same requirements as more formal standards:

* ensuring the disclosure of necessary information allowing interoperability with the standard;

* ensuring that other market participants get some assurance that the information is complete and accurate, and providing them with some means of redress if it is not;

* ensuring that the rates charged for such information are fair, and are based on the inherent value of the interoperability information (rather than the information's value as a gatekeeper).

The process of subjecting a standard to the same requirements as a formal standard is called, err, standardization.

Note, I strictly use "standard" in the sense of the offered voluntary standard: standardization means being documented, QA-ed, RAND-z, etc and on the books, it certainly does not mean (in my usage) that it is mandated for use (from the demand side of the standards market). If I can fend off some flames before they arrive, at ISO/IEC JTC1 there are types of lesser standards, such as Technical Reports, that may have less scary implications for panic-ridden and be certainly more appropriate that full standards in some cases: I include these as "standards".

So I don't see any difference in what Dr Kroes has suggested and my comment; indeed I think it is a very welcome and logical step forward. Indeed, she mentions it in the context of what competition authorities may be obliged to do!

When a market develops in such a way that a particular proprietary technology becomes a de facto standard, then the owner of that technology may have such power over the market that it can lock-in its customers and exclude its competitors.

Where a technology owner exploits that power, then a competition authority or a regulator may need to intervene. It is far from an ideal situation, but that it is less than ideal does not absolve a competition authority of its obligations to protect the competitive process and consumers.

Dr Kroes does however earlier use "standardization" in a loose way, though I don't imagine it would cause anyone to choke on their croissants: while I agree with It is simplistic to assume that because standardisation sometimes brings benefits, more standardisation will bring more benefits. on the vaccuuous lines that too much of anything is bad, the two different meanings of "standardization" should not be lumped together: standardization in the sense of "putting a technology on the books ready for voluntary use or voluntary disdain" then I don't see that we are anywhere near the point of having too many standards nor that they are complete enough or updated enough (and I think Dr Kroes may not mean this, given the comments quoted above). However standardization in the sense of adopting or mandating a standard is an entirely different question, and I certain agree with her for that meaning.

In case people were wondering about MS increasing embrace of ODF, the writing is on wall. Dr Kroes says:
In addition, where equivalent open standards exist, we could also consider requiring the dominant company to support those too.

I certainly support that: see The Norwegians get it!


Sometimes I feel like I am the only voice, peeping out "cartelization is a dominating regulatory issue" for standards bodies. Standards organizations have little and perhaps no obligations (or, at least, capability) to redress monopoly positions of technologies in a market, and indeed as the previous section mentions, standardization (if RAND-z and proper) actually can actually ameliorate monopoly positions (and they may have a duty to assist in making voluntary standards for that technology); however standards bodies must be careful not to operate as cartels of any kind.

Dr Kroes mentions cartels early: Her opening sentence.
Credible competition policy requires competition law enforcement. Cartel cases, merger cases, abuse of dominance cases.

and cuts to the chase later:

...standardisation agreements should be based on the merits of the technologies involved. Allowing companies to sit around a table and agree technical developments for their industry is not something that the competition rules would usually allow. So when it is allowed we have to look carefully at how it is done.

If voting in the standard-setting context is influenced less by the technical merits of the technology but rather by side agreements, inducements, package deals, reciprocal agreements, or commercial pressure ... then these risk falling foul of the competition rules.

Now this brings up an interesting question. I raised the issue of cartelization, in particular the aspect of vendor collusion of a majority against their dominant competitor in Is our idea of open standards good enough?

The question may seem provocative to even ask, but sooner or later it must be asked. Are standards made by organizations where vendor stakeholders can and do outnumber non-corporate stakeholders acceptable or sound?

We can take OASIS, ECMA, W3C or any of the boutique consortia that allow corporate members (or their individual proxies.) Why should we believe that standard is sound enough to mandate merely on the absence of discovered side agreements, inducements, etc, if it has been made by a committee dominated by vendors (at the quorum level of real participation)?

It seems to me that only the various international standards bodies, which have direct voting by National Bodies not individual stakeholders in particular vendors, provides the workable immunity from direct control by vendors (singly or in collision) that needs to be required for mandatory standards. It can certainly be argued that the boutique consortia may have standards approved ultimately by a larger member vote than the working group that created the standard, and that the membership was not dominated by vendors; but that is something that requires certification or monitoring—with ISO it is manifestly the default case because of National Body voting.

So the National Body system prevents "cartelization-in-the-large", where the final votes have a good measure of independence. However, no system I have seen completely prevents "cartelization-in-the-small": this is where the small working groups that prepare the drafts initially have vendor domination. Again, it is not always the case: but look at the composition of the ODF TC at OASIS and the OOXML ECMA TC45 over the last two years and you can catch my drift.

Furthermore, in practice not all members are equal: government members of committees are very likely to be there to advance a particular government agenda (accessibility, say) rather than as providers of alternative technical solutions than the vendors come up with: a working group may have effective vendor domination at the technology selection level even though the vendors do not control of the requirements.

There are some other possible approaches too. For example, some standards bodies allocate chairs in working groups by a fixed number of representatives per sector: some academics, some government, some industry, which has some merit.

All this is why I wrote
But the issue of public and archival formats for government and agency documents is clearly one where governments have a vital interest: the customer is always right. This is why I believe governments need to look beyond the current academic definitions of “open standards” and re-frame the issue as “How do we achieve verifiably vendor-neutral standards?”


There is one part that where some implications need to be thought through a little more, perhaps. In the sentence after the When a market section quoted above, Dr Kroes says
In essence the competition authority has to recreate the conditions of competition that would have emerged from a properly carried out standardisation process.

Dr Kroes uses process but means a terminating process, I think. But standardization of a technology is a continuing process, not a one-off event: standards have lifecycles, and waving a magic wand of standardization on a market dominating technology to give it some number or status will do little to help it unless there is an ongoing process of development, correction, evolution, convergence, and so on.

And an ongoing process requires an organization. A standards organization. So when the competition authority "recreates" the conditions of competition that emerged from a properly carried out standarization process (she says this in the context of de facto standards that have had no official process, by the way) this must ultimately involve passing the maintenance on to a standards body and verifying it where there is some concern. (There is certainly scope for Competition Commission action here: if governments and user groups and academia do not participate in standards bodies, say out of some mix of sloth, underinvestment, underskilling, and lack of vision (rather than just because of being poor) it would be great if the Competition Commission could compel or encourage at least matching participation by non-vendors in standards groups of interest. But that is just pure fancy, I know!)

And, of course, this maintenance has to be done with some openness. And openness means not only openness to the needs of stakeholders, but a responsiveness to outside requests. A prioritization of vendor requirements for new features over external user requests for corrections should be taken as ipso facto evidence of vendor domination of the standards group, and/or a failure in openness. Andy Updegrove has recently been talking up the need for metrics for judging the effective operation of standards bodies, a good idea, and metrics for openness and lack of vendor domination in quorums should certainly be one objective measure of this. Despite how it sounds, actually people in almost every standards body are keen for more participation.


2008-06-11 06:40:33
Then, once again, the determinants are the conditions in the participation agreements. The formal clauses there rule the trades. It is important to recognize that the consortia act on one hand as standards authors even if not standards organizations and on the other hand as trade organizations. A trade organization acting as an author by virtue of being a partner with a standards organization may have different conditions than when a single company acts in that role.

The participation agreement of the trade organization (aka, consortium) is the instrument to be examined.

Rick Jelliffe
2008-06-12 16:51:08
Len: I would go further than that: the question that I think is important is if vendor-neutrality (which takes in both that minorities cannot dictate and majorities cannot collude) is desirable, how can it be verified?
2008-06-13 05:12:45
She's not "dr" (doctor), but "drs" (doctorandus), *big* difference.

Drs more or less means you've completed your masters, where dr is more or less equivalent of completing your phd!

2008-06-13 06:25:14
The only way I know is to enable the contracts such as the participation agreements and verify the fidelity of the behaviors.

I do think that many who blog on this topic (excluding you) are not as informed as they could be on the complex relationships among open source, intellectual property, standards and market strategies. There are the loud but shallow "us vs them" or the evil empire memes but seldom a reasoned discussion of how intellectual property rights have to be handled in the context of trade associations who act as standards authors. Faux legalisms are tossed around but little that tackles the tedious topics of timely standardization in the context of sharable technology and property rights.

What we've been seeing in 3D is egregious, but given there is so little sense of fair play among the standards bodies with each group thinking only its own technical standards need protection, I've virtually zero sympathy for ODF or SVG or XUL or HTML. From my perspective, they have become the spoilt brats of the web crying for privilege and status but nothing approaching rule of law.

Too many in our generation set that in motion and with a few exceptions such as yourself, few of the A-listers will own up to the responsibility or the solutions. It has come down to any group that does do the right thing has to survive long enough for others to see it IS the right thing and ally themselves with the standards and practices based on fair play and rule of law.

As the twig is bent, Rick, as the twig is bent.