On behalf of SIDN I was the focal point and moderator of the workshop on internet consolidation at EuroDIG in The Hague, June 2019. The following is the official report of the workshop I wrote and published on the EuroDIG wikipage. It is followed by the questions that remained open and identified potential next steps forward.

The fact that this workshop was able to tie into a previous workshop on internet consolidation at the IGF in Paris, November 2018 provided focus and allowed for considerable steps to be made in The Hague. Here is the report..

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At EuroDIG 2019 a workshop was organised around the topic of consolidation on the Internet. It was organised around four angles: technique, competition, society and human rights and; future research. One thing became extremely clear: no one contested that consolidation is taking place nor that this already has and will have an impact on the Internet and consecutively on society. There also was consensus that this topic is not going away, that addressing it is urgent and more study/research and interaction between stakeholders is necessary. If anything, the workshop led to more questions being asked than answers given, which is telling in itself.

What is consolidation?

Consolidation, in this specific context, is the process by which internet activities and businesses get increasingly integrated, both vertically and horizontally or more simply put: where many of the same suddenly become fewer of the same. Another term often heard in this context is centralisation. This term is used when users have to go through one central point, e.g., to use a specific service or access a specific database. The two terms are not interchangeable.

A study by the Internet Society shows that consolidation takes place at different levels of the Internet. Applications, access provision, service infrastructure are mentioned, but beyond that, deep dependencies are created e.g., through total service environments.

Potential consequences of consolidation

In the Internet governance sphere, the topic of consolidation was raised by the Internet Engineering Task Force (IETF). It flagged the topic as important, something other stakeholders needed to learn more about. Jari Arkko presented on the topic at an IGF workshop in Paris, November 2018. The outcome led to a follow-up workshop at EuroDIG dedicated fully to the topic.

In short, it was explained, the Internet works because all involved, “the many to many,” follow universal, mandatory and voluntary open-source rules and procedures, so-called internet standards. Now that the many become less and less, it changes the Internet and internet governance procedures. When one or a few organisations control large parts of the Internet, they also come to control access to the Internet, to data, determine success or failure of innovative products, privacy, free speech, etc. This leads to important questions societies need to address. Many of these major questions were asked during the workshop, fundamental questions that in part go right into the sort of society we all want to live in.

Already there are companies at the service level, in online retail, social media, search engines, DNS queries, etc. so big that they hold large percentages of the market and dominate at a regional and even global level. This comes with large economic power, political influence, the (potential) stifling or co-opting of innovation, etc. Competition rules are looked at to establish fair play and a level playing field, but do they?

Although there was no explicit consensus in the room, looking at the discussion with a helicopter view shows that the process of consolidation leads to feelings of discomfort and unease from all sides. Whether people have a background in business, human rights, access to data and services, etc., they all have questions in need of an answer towards both actions in the present as the outcome in the future. Academia aside, they all look to others, e.g. governments, competition authorities and policymakers for action and to provide answers.

Potential next steps

Competition law

An important remark at the session was the following: We already have competition laws, so why would we need new ones? There was no direct answer to this question, yet it is important to follow up on. It was pointed out e.g., that there is a need to look at companies and their strategies in different ways. Market power could also be measured in (the availability of) access to data and not just in traditional market shares or by looking differently at overall strategies of companies in the case of mergers or acquisitions. There is a need for debate whether current, mostly national competition law is sufficient within a global, internet environment.

Many in the room were alerted to the fact that the Dutch competition authority (ACM) had concluded a study into market power of Apple’s app store and concluded that a formal investigation was called for.

Technical solutions

From the technical community came the question: “What do you want us to do”? Several possible future technical measures and solutions were suggested. E.g., to create better functioning interfaces that allow access to systems or opening up social media systems. There came no concrete answer from the non-technical community, except the conclusion that consolidation is a non-technical topic. The people responding stated that consolidation is an economic/competition law issue, so regulatory. There seems to remains one obvious role for technicians: flagging and explaining, but let’s not conclude yet whether there is no role, as the technical community sees a potential role for itself. E.g. assisting smaller companies in collaborating in a better way. The value of these measures has to become clear.

Net neutrality

Another point made in this context was the need for net neutrality as this creates a situation of equal access for all. Another topic for future debate was identified.

Interaction between stakeholders

Overall there was one major development compared to Paris in November 2018. It became clear that there’s a need to get to know each other, as some stakeholders were not familiar with each other, let alone with the work going on within their respective silo’s. If anything, this was the step forward set between the session in Paris and the work leading up to the workshop in The Hague. The sharing of knowledge could lead to new actions within respective silo’s. Whether by taking measures at the technical level, as information that authorities need to build cases on or as suggestions for using current policies or to create new ones. It was suggested to look into these options.

The good, the bad and the absent

Many people raised concerns, yet it proved hard to provide concrete, negative examples coming out of consolidation. “I cannot run my own private mail server anymore,” was the most concrete one. A conclusion that can be drawn is that it seems that at this point in time those actively involved have grave concerns because market power has come to rest in too few hands. A situation that may come with potential negative effects (soon). Attention was drawn to the fact that not all stakeholders seem aware of the current developments and what they (may come to) mean to their respective positions and interests. On the other hand, ISOC’s study shows the advantages of consolidation in e.g., cloud services and the global reach they provide even the smallest companies, although they come or may come soon with a vendor lock-in, as it becomes impossible to switch to another provider (with ease).

So what are the next steps? The workshop made clear that doors to other silo’s need to be opened. Knowledge needs to be exchanged, and organisations can assist each other in developing answers to questions that are in need of an answer. Coordination between different stakeholders could be set up, and there is a strong need to provide convincing examples of whether consolidation is good and/or bad development. Finally, missing stakeholders need to be actively invited to these meetings.

Conclusion

This workshop contributed in a meaningful way to the debate on consolidation. It provided enlightenment to those involved, despite the fact that many questions remained in place. Fact is, many were raised for the first time with other stakeholders present. Questions that are in need of an answer that will take multiple stakeholders participating in the formulation of those answers. This starts with sharing experience and knowledge among each other. Conditions were created at EuroDIG in The Hague to do so.

Wout de Natris
Workshop focal point consolidation on behalf of SIDN
De Natris Consult

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Questions in need of answers
For now, the following questions and action points were identified.

• A need to identify and understand the working of each layer of the Internet within this context
• A need to identify and understand the current situation in each layer of the Internet
• Establish the link between consolidation and net neutrality
• Does net neutrality also need to take into account free speech and innovation?
• Identify how each stakeholder community can contribute to answering identified questions
• Identify current and potential actions within and among stakeholder communities
• Establish how contributions from other stakeholders can assist (the actions of) others
• Do “classic” competition laws work for the Internet or is this a truly new environment?
• “The people” do not seem to worry. Should they? and if so, how do we tell them?
• What can (the strategy behind) mergers and acquisitions tell us about consolidation?
• Is there a need for standardisation in regulatory reporting to truly make comparisons or conclusions at the global level?
• Are security threats limited or rising because of consolidation?
• In what way can enabling smaller players from a technical point of view become an alternative to consolidation?
• How can consolidation be measured and quantified?

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A word of gratitude – This workshop was made possible through the support of SIDN but would not have had this impact without the valuable input of Carl Gahnberg, Cristian Hesselman, David Korteweg, Jari Arkko, Marie-Noémie Marquez, Zoey Tung Barthelemy and all who contributed actively in the workshop itself or shared ideas in the preparatory process. The EuroDIG secretariat’s Rainer Rodewald facilitated the whole process in a professional and extremely kind way.