The Centre's lines of research are the following:
1) Business models, platforms and sustainable markets
Digitalisation and new technologies are giving raise to the development of new business models in a variety of economic sectors. As innovation advances, new models enter the market and bring change. Platforms dominated by a handful of large multinational companies are revolutionising the way products are distributed and services provided to consumers. In many ways, they are repositioning SMEs in the market and the way they work. Likewise, they are influencing social development and posing new challenges for the protection of individuals as consumers in the market and as human beings (e.g. profiling and automation, inclusion or exclusion, autonomy and self-determination, free speech, dignity, etc.). Transparency, accountability, and the respect for established fundamental rights are key issues of digital technologies.
What are the opportunities and risks for both SMEs and consumers? This research area will use business sectors as case studies and proxies for the issues faced by SMEs and consumers. Examples are the cases of Uber or Amazon in the transport sector, Airbnb in the hospitality sector, social media and markets, etc. An important question of this area of research is the role of regulation, in particular the extent to which existing frameworks are satisfactory to the needs of market players (both demand and supply side) and society or a new generation of regulations are needed. A pressing question with new technologies is if and how to regulate them in a sustainable market economy that could find an appropriate balance between innovation, economic efficiency, social development, the protection of users’ rights, and the protection of the economic rights of SMEs as the backbone of the EU economy.
Moreover, how would a new generation of regulations look like?
2) Financial Services
There is much hype about the potential for digitalisation, technological innovation and big data to transform and deliver financial services to consumers and SMEs.
From the consumer side, the aim of this research activity is to analyse, from the perspective of financial inclusion and consumer protection, the extent to which the current EU legal framework is prepared to respond to the challenges posed by financial innovation in the context of the prospective opportunities and detriment for consumers. Fundamental rights are also included in the study.
From the angle of SMEs, to many extents small entrepreneurs face issues similar to consumers. In addition, financial innovation offers new sources of funding of diverse nature outside the traditional banking system (e.g. FinTech, crowdfunding, peer-to-peer finance). The development of affordable digital tools and platforms has provided new opportunities for SMEs to access foreign markets in a way previously unimaginable. Also, funding from new business models of large technological platforms (so-called TechFin) is emerging. Large e-commerce retailers (e.g. Amazon) and payment systems (e.g. PayPal) have started direct lending activity to marketplace sellers and SME users of their services (e.g. business cash advances). For example, large platforms use SMEs balance sheets, offering short-term working capital loans to sellers in their marketplace platform. The marketplace platform allows sellers to use their warehousing, payment and fulfilment services and, in return, the retailer collects commission payments on sales and charges fees. Loans are repaid by automatically deducting pre-agreed amounts from the sales proceeds paid to merchants.
However, with the rise of apparently attractive, simple digital solutions to SME funding requirement, what these services mean for both borrowers and lenders and what are the threats posed by these companies able to leverage their balance sheets and customer data?
In short, what are the opportunities and risks for SMEs and consumers with financial innovation? What regulation does the EU need to strike a balance between market needs, efficiency, and the protection of SMEs and consumers?
3) Competition
Digitalisation and new technologies are posing severe challenges to SMEs and consumers. Large, quasi-monopolistic platforms are increasingly entering new markets to the detriment of traditional market players such as SMEs. Either SMES adapt or they succumb. However, competition in new technologies is uneven and SMEs cannot compete with large platforms. They may become part of the platforms’ business models (opportunities but also risks of exploitation) but a new form of competition vis-à-vis other SMEs comes into existence. SMEs and start-up may also become an opportunity to develop new technologies for new business models. However, as soon as they show potential, they are acquired by the large technological multinationals that reinforce their monopolistic power and do not leave room to new players. In short, the digital market and new technologies are capable of revolutionising competition as it has been known and regulated until today.
Likewise, consumers are involved as the demand side. How is the consumer interest best served by competition in the digital market? What does it mean ‘consumer interest’ in the digital market? Should it comprise of an economic analysis only or should the protection of other values and fundamental rights be included in the equation? Again, competition in the digital market is likely to revolutionise traditional concepts.
This research activity aims precisely at the study of these questions and new ones as they emerge in this fast-pacing domain.
4) Creativity, innovation, data portability and IP
Data Portability is an emerging concept of EU Law that underpins many areas of the Digital Single Market strategy. Firstly introduced by the General Data Protection Regulation (GDPR) as a reinforcement of individual rights vis-à-vis data controllers, the right to data portability constitutes at the same time an instrument of consumer protection, competition and regulation of the internal market. In this vein, provisions on Data Portability are included in the Regulation 2017/1128 on cross-border portability of digital content, as well as in the proposal for a Digital Content Directive.
Recent literature has explored the scope of this new concept of EU law and has identified potential hurdles in its application, in particular when Data Portability overlaps with intellectual property rights. The conflict between these opposing interests arises in particular in the context of SMEs.
For SMEs operating in digital markets, Data Portability is a double-edged sword that entails both opportunities and risks. By enabling consumers to transfer their personal data and switch easily from one service to another, Data Portability makes less difficult for innovative SMEs to enter new markets and compete with companies that control large quantities of data. At the same time, however, it exposes SMEs to the risk of losing exclusive control over personal data to the benefit of large companies that can rely on network effects to attract customers.
This project analyses the factors that hinder the use of Data Portability to sustain creativity and innovation of SMEs in the digital markets, with the aim of determining the conditions for an efficient application of this legal instrument. In particular, it explores the interface of Data Portability and Intellectual Property rights and how the conflicting interests can be properly balanced. It does so by collecting empirical evidence on how SMEs in the digital creative sectors benefit from Data Portability. The data collected will enable analysis of regulatory issues of the digital single market and, ultimately, will inform the policy debate on SMEs innovation in the EU.
