Foreword

In the space of just a few years, digital commons have become one of the preferred ways for public players to develop shared digital solutions, whether between public players or within a community of heterogeneous players. While public-sector involvement in the development and maintenance of these digital commons can take a number of forms, it often consists in granting public aid to the structure supporting the digital commons. However, such support from the public sector must comply with national and European regulations on public procurement and the granting of public aid. These regulations do not take into account the particular characteristics of Open Source (shared and dispersed management of intellectual property rights) and the digital commons (a community involved in the governance and ongoing evolution of the project).

This post is part of a series of reflections and tools designed to secure the use and development of digital commons in the context of public procurement contracts. Its aim is to develop a way of thinking that secures public support for digital commons in the light of European regulations on the granting of public aid in the context of public service missions. As the concepts involved are numerous and complex, the aim is both to clarify the underlying issues and to draw on real-life situations to articulate these diverse situations.

The digital commons are generally defined in terms of a number of agreed-upon characteristics, based on an analysis renewed by Elinor Ostrom in work that won her the Nobel Prize in Economics in 2009. Briefly, a digital commons can be defined as a resource produced and maintained collectively by a community of heterogeneous actors, and governed according to rules that ensure its collective and shared character.

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The digital commons are increasingly being mobilized by public players as part of their public service mission, in various forms, both in France and in Europe. This model is very much in evidence in the field of software, particularly when end-users have a particular interest in having these resources supported by a wider community that defines their governance. Joint organization and production allows us to think in terms of pooling resources, giving all stakeholders greater influence in the evolution of the resource, and facilitating the consideration of systemic issues. These include collective issues such as maintenance (and funding for maintainers), digital sovereignty, digital resilience and, more generally, sustainable digital technology.

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France is particularly advanced on these subjects due to the obligation today placed on any player, be it private or public, to publish by default in Open Data (and therefore in Open Source when it comes to software) all documents produced or received as part of public service missions. In France, the legal framework was laid down by the 2016 Law for a Digital Republic, reinforced in 2018 by the State's Open Source Software Contribution Policy, which provides it with a technical framework reinforcing this practice within the Administration. Making it possible to reconcile the legal, political and strategic challenges of the digital world, the use of digital commons is thus strongly encouraged by public players in order to ensure a shared benefit from the resources thus produced and maintained and to avoid any distorting effect on competition that could result from the capture of open resources by certain players only.

Numerous initiatives are currently being taken in this direction, notably by the Mission "Logiciels Libres et Communes Numériques" at central government level, and by ANCT's Digital Society Program at local level. In the same spirit, some public-sector mutualization structures have made Open Source an approach in principle, to enable mutualization and co-financing by their members. This is notably the case for initiatives led by theAssociation des développeurs et utilisateurs de Logiciels Libres pour les administrations et les collectivités territoriales (ADULLACT), or players such as the Opérateurs Publics de Services Numériques (OPSN), which brings together a growing number of local authorities.

The digital commons, like Free Software, now occupy an important place in the information systems landscape in both the private and public sectors. Fostering the emergence of the digital commons thus helps to create an environment conducive to competition and innovation, with the beneficial consequences this can have on prices, well-being and economic growth on a French, European and international scale.

What's more, the participation of public players in the financing, design and governance of such commons helps maintain the presence of a genuine general interest within the community.

This is one of the reasons for the genuine interest in, and strong political support for, or even growing funding of projects through "calls for commons" or special funding for "common goods". These types of funding fall into the category of public aid, the legality of which must be analyzed.

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Whatever the project or context, the granting of public aid, regardless of the contracting authority or recipient, must comply with European regulations on state aid. The granting of public aid by a State or one of its operators, whoever the recipient (public or private), is governed by Article 107§1 of the Treaty on the Functioning of the European Union (TFEU). This stipulates that State aid is prohibited when it meets four criteria:

1. Aid is granted by the State using public resources. This may involve resources granted directly by the State, indirectly by bodies linked to the State, or by local authorities. The case of aid granted by state-owned enterprises has undergone a major jurisprudential evolution, to the point where it is presumed that any financial intervention by a public entity for the benefit of third parties constitutes aid.
2. This aid gives a company a selective advantage. A company is defined here in the European sense of the term, which includes public-sector players.
3. It distorts competition within a Member State or within the European Union. This distortion may be actual or potential.
4. It affects or is likely to affect trade between Member States. Aid is considered likely to affect competition if it is not aimed at a "purely local" activity.

Until 2015, in the European Commission's approach, the last two criteria were presumed; and the meeting of the first two made it possible to retain the qualification of State aid. Since 7 decisions were taken in 2016, the Commission has considered that proof of an effect on trade is necessary to qualify as state aid.

While the first two elements are easy to characterize, the next two require more in-depth study, especially when the public aid in question is granted for a digital common project.

Public support for digital commons and distortion of competition

The issue here is to ensure that by granting public aid to a digital commons, the public player does not undermine the principle of free and undistorted competition.

The development of a digital commons, thanks to community governance and rules that ensure a balanced relationship between all stakeholders, strengthens trust and encourages the involvement of all, limiting the potential for re-appropriation by a single stakeholder. In this scenario, all holders of intellectual property rights grant their rights free of charge for the entire world, for the entire duration of the rights, for all uses and on all types of media.

This license, known as the "Free License" (or "Open Source License"), is backed up by a series of material resources designed to encourage collaboration by guaranteeing that anyone can access, modify and distribute the resource at any time, including in a commercial context. Such governance can be provided specifically or by relying on third-party tools and organizations. In this sense, the Fabriques (for mobility, logistics and energy) offer a guarantee of long-term project openness, by providing and ensuring compliance with a set of legal and governance rules¹.

In this context, fostering the emergence of digital commons helps to create an environment conducive to competition and innovation in public procurement, with the beneficial consequences this can have on prices, well-being and economic growth. The compatibility between the development of digital commons and respect for free and undistorted competition is also reinforced by case law concerning Free Software. Over the last few decades, a number of court decisions have ruled that a community formed around Free Software (and therefore a digital commons) does not constitute an agreement (even between private players)². What's more, the judges' reasoning is transposable to the digital commons: it is possible to stipulate in law that Free and Open Source Software will be favored by public purchasers³, as long as such a choice is technologically neutral on the one hand, and doesnot favor one or more players in particular on the other.

Thus, from a public procurement point of view, a public purchaser who wishes to impose a digital common (whether named or not) as part of the performance of a service contract is not in breach of the principle of non-discrimination that applies to him. This analysis was set out in France by a Conseil d'Etat decision in 2011, detailed in a dedicated post on "public procurement and digital commons". Indeed, the Free License associated with such a project authorizes the direct or indirect commercialization of the resource by all. In so doing, it ensures an absence of discrimination which, combined with inclusive governance within the digital commons, enables all players to benefit from the efforts already made.

The 2011 decision seems applicable to the digital commons, establishing that the requirement to use Free Software as part of a public procurement contract can neither be considered as having the effect of favoring the company that participated in its design, nor as having the effect of eliminating competing companies. Indeed, competing companies are perfectly capable of responding on the basis of a free resource, provided they have the skills to understand and adapt the latter, made freely accessible, modifiable and distributable by all thanks to the associated Free License.

¹ Such governance by an external player can be an additional guarantee of trust, but it shouldn't be the only way out, and many Open Source communities govern themselves perfectly well.

²See, for example, Wallace v International Business Machines Corp, United States Court of Appeals, 7th Circuit, November 9, 2006, no. 06-2454.

³In Italy, see the Italian Constitutional Council, March 23, 2010, 122/2010.

Public support for digital commons and allocation of trade between member states

Initially, distortion of competition and effect on trade between Member States were presumed when State aid granted through public resources conferred a selective advantage on a company.

In April 2016, the European Commission reversed its decision-making practice, taking seven decisions declaring that public aid could not be classified as State aid because it did not affect trade between Member States. The Communication on the concept of State aid of July 19, 2016 acknowledges this change and reverses the burden of proof: theeffect on trade between Member States must be proven, it cannot be presumed. Thus, the classification of public aid as State aid within the meaning of Article 107§1 TFEU, and therefore the establishment of its illegality, presupposes proof of an effect on trade between Member States.

The European Commission has not yet had to deal with any disputes concerning the granting of public aid for the development and maintenance of a digital commons, or even Free Software. However, an analysis of the seven founding rulings of its reversal of decision-making practice¹through the prism of the digital commons and Free Software may enable us to anticipate the Commission's position in this area. In these seven rulings, the Commission proposes a set of criteria for determining that an activity does not affect trade between Member States, including " the specific nature of the activity, the number of customers from other Member States and the absence of international promotion".

More specifically, in decision no. SA. 45 512 of August 1, 2016, the Commission found that the low probability that the activity supported would have a significant impact on international operators in the market in which it was taking place meant that trade between Member States would not be affected, and that the public aid granted to it therefore did not constitute State aid.

Financing granted to an activity whose development does not affect international operators, attract international customers or prevent the establishment of international competitors does not therefore constitute state aid.

The openness and inclusivity inherent in the digital commons benefit all operators, regardless of their location or activity. They allow us to assert that support for the digital commons on the scale of a territory, a region or even a country is likely to be equally beneficial to any player established in another country. On the contrary, the legal and technical organization of access to the resource, and the organization of inclusive governance within the project are all guarantees that any player is likely to benefit from this approach.

It's quite clear that the thinking behind public procurement can be transposed to a large extent to public subsidies. This makes it possible to validate the legality of granting public aid to a public or private player who has organized the governance of its digital commons project in such a way as not to discriminate against any player wishing to use or even contribute to the said project. What's more, case law on State aid seems to support this idea, and to specify what is expected of financed digital commons.

In addition to the aforementioned issues of openness, and contrary to current practices in terms of public aid, certain best practices can be followed in terms of digital commons to ensure even greater inclusivity on a European scale: ensure that documentation on the commons and its governance is available in both French and English (or at least simply translatable), ensure that project governance allows for the integration of European players, encourage partnership approaches on a French and European scale to extend the benefits of the commons approach beyond the territories initially concerned.