Welcome to EURACTIV’s Tech Brief, your weekly update on all things digital in the EU. You can subscribe to the newsletter here.
“No regulation is regulation already. Until binding and effective legal instruments are adopted and applied, unacceptable patterns and practices will entrench themselves further.”
– Gregor Strojin, vice-chair of the Council of Europe’s Committee on AI
Story of the week: The European Commission will negotiate the AI Convention on fundamental rights, the rule of law and democracy within the Council of Europe on behalf of the EU. It can do so since it has already tabled a proposal in this area, the AI Act. While waiting for a mandate, it has obtained a postponement of the next plenary session from November to January. And on the grounds of the loyal cooperation principle, it has obliged the other EU countries to go into silent mode. Still, it is unclear if the Commission will be able to engage in meaningful negotiations since the AI regulation is still a moving target, and there are already talks of extending the timeline of the committee in charge of drafting the AI treaty.
As EU dynamics hijacked the decision-making process of an independent body, the operation is not without complexity. So far, the AI Act and the treaty have been negotiated by different national ministries, the former focusing on economics and innovation and the latter focusing on justice and fundamental rights. Since the treaty has now become subordinated to the EU’s rulebook, the justice ministries have lost control over the process. Questions are being raised about whether the AI Act provides enough fundamental rights safeguards. Moreover, countries with observer status, like the United States, have taken over the discussion and are now pushing for excluding the private sector from the treaty’s scope. Read more.
Don’t miss: The fact that the EU’s position on Artificial Intelligence is yet to be defined is seen by the Parliament and Council moving in opposite directions regarding the use of biometric recognition systems. After weeks of technical discussions that led to close the first two batches of compromise amendments and part of the third one, the MEPs finally addressed some of the most sensitive topics on Wednesday. The co-rapporteurs have proposed removing all the exceptions to the prohibition on biometric recognition technologies with a wording that extends the ban also to private and online spaces.
The European People’s Party vehemently opposes a complete ban, but according to two parliamentary officials, most political groups are against them. The other controversial topic discussed was the regulation’s scope, but here the discussion was less tense as every group was set to lose (and gain) something from the proposed text. The exemptions of third countries’ public authorities and R&D activities will likely be the part that will see the most refinement in the future. The leading MEPs also proposed extending the EU database for providers of high-risk systems to public bodies, a middle ground between those who want it extended to all users and those who preferred the original text. The next political discussions will likely focus on AI definition, General Purpose AI and Annex III. The technical discussions will continue in parallel. Read more.
Also this week:
- The Italian competition authority lost a major court case against Apple and Amazon.
- Following the Nord Stream sabotage, Brussels is paying increasing attention to the security of submarine cables.
- The UK is getting serious about diverging from the GDPR.
- Six hosting sites for quantum computers in Europe have been announced.
- Rightsholders are pressuring the Commission to crack down on online piracy.
- The EU executive outlined a series of results it wants to bring at the next TTC meeting.
Before we start: The Netherlands is a big proponent of using open-source solutions across the board. We have caught up with the Dutch Minister for Digitalisation Alexandra van Huffelen to discuss her views on electronic digital identity, the AI Act and Data Act.
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Artificial Intelligence
Council’s steady progress. Meanwhile, the Czech EU Council presidency continued progressing on the AI Act, virtually closing articles from 30 to 85 at the Working Party meeting on Thursday. At the same time, law enforcement confirmed a critical hurdle for the file, with Germany coming back with its original idea of putting this part in a separate chapter or even under another legislative proposal. Meanwhile, the presidency’s approach to General Purpose AI was mostly welcomed, with only isolated voices calling for excluding these systems from the scope. On technical specifications, the EU countries want to pursue the same direction that is being followed in the context of the regulation on machinery products, whereby new harmonised standards would repeal them. The Commission opposes that, contending that it would make the process too complicated. The member states had until Wednesday to provide written comments. A new compromise text is expected by the end of the month.
Metaverse? In the recital. Last week, EURACTIV reported that the European Parliament’s AI Act co-rapporteurs proposed an article specific to the metaverse. The initiative came from Dragoş Tudorache, who presented similar provisions at the amendment stage. However, it did not meet the favour of the majority of the political groups in the technical meeting last Friday, which argued that there was no impact assessment on how these measures could impact such an emerging market and that the Commission is already planning an initiative on this. Nevertheless, TudorFbasisache brought a recital home, with the wording still to be defined.
US Bill of Rights. On Tuesday, the US government presented its initiative for a bill to introduce AI accountability based on five protected areas. These include safeguards from unsafe or ineffective systems, discriminatory algorithms, abusive data practices, transparency, human alternative and remedies. The White House’s AI blueprint is likely to impact the federal government most but it is not binding for the private sector, leaving many people in the industry unimpressed. To what extent the bill is a priority for the Biden administration is also called into question since it is unlikely to pass through Congress before the mid-term elections.
Competition
More defeats in court. Fines of over €200 million, levied last year on Apple and Amazon by Italy’s antitrust regulator, were dismissed this week for procedural reasons, including the two companies having been given insufficient time to defend themselves. The penalties were handed out to the tech giants for what the Italian watchdog said was a collusive market agreement between the two concerning the sale of Apple’s Beats earplugs on Amazon and had already been reduced earlier this year due to a miscalculation. Read more.
Fine marked down. According to Reuters, a French court has significantly lowered a record fine levied against Apple in 2020 for what competition authorities said was the tech giant’s anti-competitive behaviour towards its distribution and retail network. The original €1.1 billion fine was reduced to €372 million on Thursday after an appeals court threw out one of the watchdog’s charges. Read more.
A troubled marriage. EU competition regulators will decide in one month whether to give the green light to Microsoft’s acquisition of gaming company Activision Blizzard. However, Reuters reports that the outcome is unlikely to go in the tech giant’s favour and could instead lead to the opening of a larger investigation into the deal. As part of the inquiry, EU regulators have been quizzing game developers on whether Microsoft would likely end up blocking rival developers’ access to Activision’s flagship product, “Call of Duty”, should the deal go ahead. 8 November has been said as the decision deadline, but Brussels’ is just one of several ongoing inquiries into the merger.
Cybersecurity
Perceived threat. The suspected Russian sabotage of the Nord Stream gas pipelines has put the potential vulnerabilities of Europe’s critical infrastructure under the spotlight in Brussels. In response, the European Commission pledged to increase the protection of submarine cables on Wednesday, which is considered a vulnerable part of the internet infrastructure. Transcontinental submarine data cables account for 99% of the world’s digital communications, which are crucial to the functioning of the global economy. Potential attacks might result in communication outages or interception of confidential data. The European Parliament will also present ideas on how to increase the resilience of this critical infrastructure, NIS2 rapporteur Bart Groothuis said during the plenary debate this week. More here.
Fingerprint security failure. A security flaw in the new Google Pixel 6a’s fingerprint sensor, which allows unregistered prints to unlock the phone, needs to be swiftly addressed, Euroconsumers said this week. Calling on the company to act and address the issue, the consumer group warned of the potentially serious impact on customers’ data protection, particularly given that the print sensor is also used to facilitate digital payments.
Data & Privacy
Privacy Shield 2.0. Privacy wonks will finally be able to read the much-waited executive order that the Biden administration is set to release at 16:00 CET today on the new EU-US data protection agreement. The Commission decision is expected to be ready in November, but it will go through the EDPB opinion and the member states’ approval. Rather than the end of the process, this is just the beginning, without even mentioning the certain legal review that will take place in a Schrems III case.
Divergence is coming. The UK intends to replace the GDPR, breaking even further from the EU’s data protection regime than previously indicated, said Michelle Donelan, the new state secretary for digital, during the Tories’ annual conference on Monday. The country published a Data Reform Bill earlier this year, already casting doubt on the future of Brussels’ post-Brexit adequacy decision. This week, however, the new British government said it would undertake an even more drastic reformation of the existing system and develop a “truly bespoke” data protection system. Donelan also committed to amending the controversial Online Safety Bill and speeding up the rollout of 5G networks in the country. Read more.
Data breaches investigated. The Irish Data Protection Commission (DPC) has submitted a draft decision on its investigation into last year’s major data leak held by Meta. The case concerns Meta’s handling of the online exposure of data belonging to 533 million users, including many high-level EU officials, in April 2021. The DPC launched an investigation after concluding that the platform might have violated the GDPR by not notifying the watchdog of the situation. The decision has now been passed on to other EU authorities for their feedback. Read more.
Questionable basis. The Commission used data on the accuracy and precision of AI tools to detect child sexual abuse material online exclusively from Meta and another tech company, access for documents request filed by former MEP Felix Reda showed. Independent research, control tests or further details on the underlying datasets of the tech companies were not considered in the impact assessment for the proposal of the CSAM regulation. According to Reda, the Commission should not rely merely on industry data, where it is unclear what methodology was used for the tests that found a 99% precision rate for child abuse detection tools. The number of false positives is relevant because intimate messages and photos of innocent people could end up on the screens of investigators. More here.
Digital Markets Act
Move over for the enforcers. Rita Wezenbeek is set to take over Gerard de Graaf’s vacant post as the director for platform regulation in DG CNECT, and Filomena Chirico from Breton’s cabinet has been tasked with leading the DMA enforcement unit, Politico reported. Tellingly, they both worked for DG COMP in the past, which is a clear advantage point for such key enforcement roles. While Wezenbeek gained a shiny new position in DG CNECT’s most prominent directorate, her move might benefit Breton’s initiative on the fair share, on which she has kept a cautious approach so far. Many wonder who will take her post as the new director for connectivity. Kamila Kloc is said to be the top choice for the replacement, while other names circulating are Pearse O’Donohue and Carlota Reiners Fontana. The new appointments also fit in the broader chessboard of DG CNECT’s leadership. At this time of the mandate, Commissioners start making strategic placements to continue their legacy after the elections. In this regard, Anthony Whelan is said to be ready to return from the von der Leyen cabinet to a management role, while the eternal Roberto Viola might have to leave his post sooner or later.
DMA/DSA working group. The informal intergroup of the European Parliament meant to monitor the implementation of the DMA and DSA has been divided into two sub-groups headed by Andreas Schwab and Christel Schaldemose, respectively. The new body is still at an early stage and lacks a work programme, with the first meeting unlikely to occur earlier than December. The lawmakers are well aware that the Commission would have little to share before the implementing and delegated acts are published. The model being followed is that of the ECON competition working group, which is supported by the committee’s secretariat and has its own webpage. Contrarily to the competition working group, though, the intention here is not to regularly engage with the industry but to provide a platform to scrutinise the Commission’s work.
Digital Services Act
DSA adoption. The EU Council formally adopted the Digital Services Act on Tuesday. It is set to be signed by the presidents of the EU Council and Parliament on 19 October, after which it will be published in the Official Journal of the European Union. The entry into force is expected in January 2024.
The untrusted enforcer. The DSA governance architecture results from Brussels’ “distrust” of Ireland as a regulator of Big Tech, EU digital chief Margrethe Vestager said in an interview this week. Member states remain at odds over whether Dublin is doing a good enough job at overseeing the major firms in its jurisdiction. The landmark legislation, approved earlier this year, was born out of a lack of faith from other countries that Ireland would be an adequate enforcer of EU law. Vestager’s words are nothing new, but it is the first time a senior EU official spelt them publicly.
Digital rights
Declaration in sight. The text is expected to be finalised next week following six technical meetings on the European Declaration on Digital Rights and Principles for the Digital Decade. MEPs have been particularly keen on including strong wording regarding protecting privacy and workers’ rights in the context of using Artificial Intelligence. The final text is expected to be shared with the member states by the end of October, with a COREPER discussion tentatively scheduled for 14 November. The final signature is expected in December.
Gig economy
Follow the path. The Czech approach to the rebuttable presumption in the platform worker directive, reported by EURACTIV three weeks ago, was met positively by many member states. The job is far from done, though, as several points have emerged that need to be further clarified, particularly on how the criteria-based presumption would be activated in practice. The question of how the directive would apply to the self-employed has also been raised, making some member states request a legal opinion to the Council’s legal service. Extending the proposal’s scope to intermediaries such as recruitment agencies also found support among the EU countries, but some have requested the Presidency to further elaborate on its practical implications.
STR pushed further. The EU proposal on short-term rental is said to be postponed from 28 October to mid-November, increasing the original delay.
Industrial strategy
Collaborative efforts. The European High-Performance Computing Joint Undertaking announced on Tuesday (4 October) its selection of the six hosting sites for the “first European quantum computers” in the Czech Republic, Germany, Spain, France, Italy and Poland. Academic researchers and industry across Europe will be able to access these computers, which are intended to solve complex problems relating to health, climate change or logistics using a fraction of the resources needed by traditional computers. The plan is to make these new quantum computers available from late 2023, and the envisaged investment amounts to over €100 million. More here.
Silicon wafers made in Sicily. The Commission this week approved €292.5 million in funding for Italy to support STMicroelectronics’ construction of a semiconductor plant in Catania, Sicily. The fab will fall under the Chips Act’s first-of-a-kind category, as it is the first to produce silicon carbide wafers in Europe, which are used as a base for certain microchips and devices such as electric vehicles and renewable batteries. The money will be made available via the Recovery and Resilience Facility. Along with the recently-agreed project for Intel’s packaging factory in Vigasio, Veneto, investments in semiconductors are among the last moves of the outgoing Draghi government.
Start-ups’ grandeur. France, home to a growing start-up scene, has its eyes on becoming a European leader in start-up development, the head of France Digitale told EURACTIV. Paris shares Brussels’ goal of seeing the emergence of large European companies, Maya Noël said, noting that French cities are increasingly relying on the French Tech movement in developing innovation clusters across the country. Read more.
Law enforcement
Protocol needed. The European Parliament’s investigation committee of Pegasus and other spyware (PEGA) held a Thursday hearing where MEPs who have become victims spoke about their cases. Diana Riba, the vice-chair of the Pegasus Inquiry Committee and a victim herself, asked for establishing a protocol in the European Parliament for when MEPs are affected by spyware. Eva Kaili, vice-president of the European Parliament, suggested that the parliamentary service of checking phones, which revealed the surveillance of MEPs, be extended to journalists to deter further espionage. The next steps of the PEGA committee are a mission to Greece in early November and to Hungary in February. A mission to Spain is still not on the agenda.
Media
Rightsholders’ anti-piracy charge. 108 media, sports, music and culture organisations wrote to the Commission this week, calling for a legislative instrument to tackle piracy of live content, which the signatories argue is having a major impact on their sectors. Piracy, the groups say, has spiked in recent years, climbing to particular heights during the COVID-19 pandemic, and the EU response should take the form of regulation rather than a non-legislative instrument, which they argue would be “inadequate and insufficient”. Read more.
Public funding criteria. Public funding of the media in Austria will be updated to include criteria including gender equality and the following of editorial guidelines, the country’s government announced this week. The new €20 million funding package is being introduced in response to long-standing criticism of Austrian media funding allocation for its lack of transparency and privileging of larger market actors, and with the overall aim of addressing these issues and boosting diversity in the sector. Read more.
Mission to Greece. Media watchdog Reporters Without Borders (RSF) will visit Greece next week to examine the country’s worsening press freedom situation. Greece was the worst-ranked EU country in RSF’s 2022 World Press Freedom Index and has drawn attention in recent months due to a spyware scandal which revealed that the country’s secret services had bugged the phones of several journalists. RSF’s visit, from 9-11 October, will focus on the freedom, independence and sustainability of the press, the head of the organisation’s EU/Balkans desk told EURACTIV. Read more.
Platforms
Elon’s last U-turn. Elon Musk is heading back towards the deal he previously walked away from, offering this week to buy Twitter for his original offer of $44 billion. This week, a US judge halted the two parties’ brewing lawsuit to allow the billionaire to complete the deal originally struck in April. Musk tried to renegotiate the agreement shortly after making it, prompting the platform to file a suit against him. As of this week, however, the deal appears to be back on. Musk has said it will act as “an accelerant to creating X, the everything app”, which some observers believe could be modelled on the “super-apps”, prominent in China, which offer users multiple services in one place, from food deliveries to communication.
Meta’s Middle-Eastern policy. This week, the Facebook Oversight Board, which deals with notable content moderation questions, launched a case linked to the ongoing protests in Iran. The Board is seeking public feedback on how its Violence and Incitement policy should balance the newsworthiness of posts against their potential rhetorical messages and how criticism of the Iranian government and content related to the current protests should be handled. The case stems from the removal of a cartoon caricaturing Iran’s leader, Ayatollah Khameini, and calling for the death of the government from a public group in July this year. The decision was appealed and eventually reversed on the grounds of newsworthiness.
Standardisation
Tangled cables soon in the past. The European Parliament on Tuesday adopted the legislation that will introduce common chargers for all mobile phones and other electronic devices in the European market as of late 2024. The law will force all companies, particularly Apple, which uses its own Lightning connector to charge iPhones, to adapt. This will reduce tons of electronic waste each year and enable consumers to use their electrical appliances more easily and sustainably. The idea of a universal charger is anything but new and even though the number of mobile phone chargers has been reduced from 32 to three in the last decade, a voluntary solution from the industry was not achievable.
Telecom
A Christmas present? The public consultation on the European Commission’s initiative on senders-pay (aka fair share or traffic tax) is set to be open before Christmas, several sources told EURACTIV, contradicting Breton’s recent interview to Le Monde that anticipated it for early next year. A possible date circulating is the 21 December, which would go along the Commission’s trend of making other people work during the holidays – while preaching about work-life balance. The timing would fit the intention to publish the initiative in the first quarter of 2023.
Missing the 5G train. The EU will miss its digital decade goals unless it alters the current policy framework, according to research by GSMA. While 5G is being adopted in Europe faster than ever, the region is still lagging behind the US and Asia, and nearly one-third of the population will remain without coverage by 2025. As such, GSMA calls for Brussels to increase its focus on fostering the market conditions that will spur investment in infrastructure and reiterated its call for the fair contribution principle regarding network costs.
Transatlantic ties
Looking for victories. The Trade and Technology Council is in dire need of showing some concrete results ahead of the next summit in December. According to a presentation that the Commission gave to the member states on Monday, the two blocs are trying to complete a roadmap on trustworthy AI, a joint exercise on supply chain disruptions and the identification of a joint infrastructural project to be showcased at the next ministerial meeting. Read more.
Future of the Internet event. The EU and US are organising a high-level multi-stakeholder event in Prague on 2 November to follow up on the Declaration on the Future of the Internet signed in April. According to an early programme seen by EURACTIV, the conference will also discuss how the declaration could support the building of public sector metaverses for the common good, with the Commission set to showcase its Destination Earth initiative. Disinformation on the war in Ukraine will be another major focus of the event.
What else we’re reading this week:
How the European Union can best apply the Digital Markets Act (Bruegel)
Secretive Chip Startup May Help Huawei Circumvent US Sanctions (Bloomberg)