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Awareness of Competition Law

Concerning the relevance of competition law for research, all interviewees were aware of the Research Framework[1] and its requirement to distinguish between economic and non-economic activities as well as to apply full costs to the former. Beyond that most interviewees were not generally aware of competition law problems or had not yet come across competition law in their everyday tasks respectively. Only two interviewees mentioned IPRs and one interviewee mentioned procurement as areas where competition law becomes relevant. This does not necessarily mean the other interviewees are not aware of competition law beyond that if prompted further, but it was very clear that the Research Framework and full costs were the first things that came to mind for all interviewees.

Economic Activity

As in the other two countries, research conducted independently with generic funding will probably be a non-economic activity. As regards public competitive funding the interviewees pointed out that DFG funding is mostly open subject-wise and provided for basic research. Funding by the Federal Ministry of Education and Research (Bundesministerium fur Bildung und Forschung, BMBF) and other ministerial funding, if applicable, would implement research policy in areas which are ‘fashionable’. Here universities/researchers could lobby in advance for their subjects, but, once the calls are out, they have to apply within set limits which differ between calls. The majority of the interviewees stated that calls can be very specific. Sometimes the creation of a prototype in a certain area is required or a specific study commissioned whereas, on other occasions, programmes just generally encourage entrepreneurship, co-operation or offer institutional funding. Some of the larger programmes were offered for collaborations between companies, HEIs and others which were then supposed to work together and utilise synergies from basic research up to the final product stage. Situations where the funders are essentially commissioning a prototype or a study would probably have to be regarded as economic in nature, as they could be provided under market conditions. The responses from the interviewees seem to indicate that such calls exist. The universities under scrutiny, however, seemed to regard any public funding as non-economic in nature. Only the interviewees in one category 1 university made a specific point of declaring that they do assess public funding for its economic nature. That assessment would usually lead to the result that they considered it non-economic.

All the universities under scrutiny seemed to be involved in (almost) all the cooperation forms of non-public funding described in Chap. 4 (Sect. 4.4.2.3).

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A cluster was described as an area where many public and private sector research organisations are located which all work on a few subject areas. They do not collaborate in an institutionalised way, but instead create synergies and can lead to smaller co-operation on project basis. Sometimes there are also shared laboratories in a cluster. With the exception of renting out infrastructure or when common projects are agreed upon, which could be economic activities, clusters themselves, as has been discussed for the other two countries (there referred to as science parks),[2] would probably not be regarded as undertakings because they are essentially just a space in which separate entities are located. Also, privately funded chairs are probably mostly not an economic activity. The interviewees explained that these are often not entirely privately funded. Instead, it was, in their experience, more common that private or third sector partners only contribute to existing chairs in a subject area. Even if they do help create a new chair, the academic is free to decide how to proceed within this area. This kind of institutional funding appears to enable independent research for better knowledge rather than being a service which could be commissioned on a market. It therefore seems likely to be non-economic in nature.

Research co-operations have been described as ‘eye to eye’ co-operations in which outcomes are shared fairly by providing the private partner with know-how and the researchers with publications. The project theme is decided upon between partners and researchers from both parties working together, often in the facilities of the universities. The details of such co-operations are agreed upon in contracts, in particular, who receives ownership of which results. Sometimes co-operations are co-financed through additional public funding. Yet, an interviewee from a category 1 university expressed that he is doubtful if it really is always a ‘win- win’ situation, as the private partners are sometimes overly influential in deciding the direction of research due to their financial investments and the involvement of their staff. They would also profit significantly from use of the infrastructure and from receiving the results. It is for this reason, as well as because the companies do not want their competitors to know with whom they cooperate, that these co-operations are sometimes kept at a low profile. He considered this as being potentially at odds with the mission of a university which involved disseminating research results and sharing research experiences with students. PPPs are, according to the interviewees, co-operations with the private sector for a longer term. They have been described as forums for intellectual exchange, common projects, reciprocal support and advancement to new areas. Such collaborations have framework agreements in place. Equally, they often receive additional public funding. University-industry research centres (Universitats-Industrie-Forschungs-Zentren) were described as innovation centres with common infrastructure. Accordingly, they seem to be something in between PPPs and a cluster, sometimes with a special focus on entrepreneurs.

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All these forms of collaborations need to be assessed on a case by case basis as to the question of whether an economic activity is taking place. If the research is taking place freely with the aim of generating knowledge and disseminating it at a pre-competitive stage and the universities have sufficient influence on the directions of research, the collaboration would be of a non-economic nature. If essentially the cooperative project is conducting a research service for the private sector partner, if the partner gets to use the university infrastructure beyond the level necessary for the projects or receives all the IPRs, it might be of an economic nature. This did not necessarily seem to be clear to the interviewees. Whilst a few interviewees pointed out that a differentiation between economic and non-economic activities needs to be made and that it can be difficult, many interviewees seemed to assume that co-operations are usually non-economic in nature (with which they also seemed to be more comfortable) and that in particular the involvement of additional public funding would automatically take the co-operation out of competition law.[3] One interviewee also said he assumed that the fact that one institution is particularly chosen because it might be the only university conducting a certain type of research, and therefore had no competitors, would mean that any involvement with them would not take place on a market which corresponds with the approach taken in public procurement law. As previously mentioned (Sect. 5.5.1) the interviewees in one category 1 university seemed to be the clearest on the fact that the economic nature of an activity need to be assessed for every individual activity. They pointed out that, in cases of doubt, they would assume it was an economic activity. In accordance with the Research Framework they would only assume a non-economic co-operation if both partners contributed equal amounts of work and when success and risks are shared and every partner owns their results. If one party retains all the results this would be an indicator of an economic activity and they would then apply full costs. However, while the Commission indeed declares in para 28 seq of the new Research Framework[4] that under such conditions it does not consider a collaborative project to constitute hidden state aid for the private sector partner, this does not necessarily mean that in such a case no economic activity is taking place and that other provisions of competition law cannot apply. This would still rely on the question if it was independent research for ‘more knowledge and better understanding’.

An-Institute have been described by the interviewees as small entities which are independent, but with which the university keeps a close relationship and partly does cooperative research with. Often they are led by university academic staff, but without the university having supervisory powers over the staff in their managerial capacity in the An-Institut. Sometimes they were described as service sector companies, sometimes as public entities. Spin-offs and other start-ups were also described as independent companies in which the universities might have shares but in which private partners are also involved. Often they are led by, or employ, university staff and they also often receive additional public funding. It was recognised by the interviewees that such entities need to differentiate between economic and non-economic activities. However, as they are independent entities, this was not necessarily regarded as a problem for the university. The universities could, however, conduct an economic activity, provided the external entity is doing so, through holding shares in them, through common projects as outlined above and through the process of spinning out and/or transferring IPRs in particular if private money is invested and not all income is reinvested into the primary activities.

As has been previously mentioned, contract research is clearly an economic activity of which the interviewees were also very aware. According to the interviewees, companies prefer this way of co-operation because it allows them to keep all the research results and it is therefore most common among the various collaboration forms.

  • [1] Then in its previous version (see n 43).
  • [2] See Sects. 5.3.2 and 5.4.2 above.
  • [3] This is in Line with what the Commission assumed Member States would think (see EuropeanCommission 2012 p. 8) and thus attempted to clarify this in the new Research Framework in inpara 15(h) and para 27. See further Chap. 3 Sect. 3.2.4.2 above.
  • [4] Then similar in Sect. 3.2.2 of the previous version of the Research Framework.
 
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