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“The EU Chips Act will empower private companies and governments to work together to drastically advance Europe’s position in the semiconductor sector.”
– Intel CEO Pat Gelsinger
Story of the week: The American chipmaker Intel announced €33 billion in European facilities this week, in what is possibly the largest investment from a private company in Europe in several years. CEO Pat Gelsinger anticipated that more investments could follow, totalling €80 billion in the next 10 years. The plan includes the establishment of two mega fabs in Germany, doubling the manufacturing space in an existing fab in Ireland, building a state-of-the-art facility for back-end manufacturing in Italy, an R&D and design hub in France, expanded laboratory capacity in Poland and an extended collaboration on advanced computing in Spain.
The strategy is intended to boost Europe’s semiconductor capacity across the entire supply chain, from boosting research to offering foundry services, namely producing chips designed by other companies. The US company also tried to spread the investment across different EU countries, anticipating the recurring criticism that the Chips Act is set to benefit only a handful of countries. Still, it is quite remarkable that the investment is mostly limited to the largest member states, except for Ireland where Intel was already present.
The reason is that Intel has been negotiating financial support from the national governments with the blessing of the Commission, which is why the plan was long in the making. Asked by EURACTIV at a press conference about the amount of public funding agreed, Gelsinger declined to provide details, indicating how sensitive these figures might be. For Italy, the negotiations are not even final yet. Read more.
Don’t miss: During the third political trilogue on the DSA this week, the Commission has proposed charging the Very Large Online Platforms (VLOPs) a fee to fund the EU’s monitoring of their compliance, drawing a parallel from the banking sector. However, the proposal was included in an amendment from the Greens that was voted down in the plenary vote, which makes it hard for the MEPs to accept the proposal. The discussion touched upon risk assessment, responsibilities of online marketplaces, the definition of dark patterns, and the inclusion of search engines. For these topics, leading MEP Schaldemose told her colleagues on Wednesday that a compromise might be near. Other points like compensations, the ban on targeting minors, and recommender systems were also discussed. As all controversial points were returned to the technical level, the French Presidency requested a new political trilogue before the end of March, now set on 31 March, as the members of the French government will be prevented from travelling as of 1 April. Read more.
The day after the trilogue, the French EU Council Presidency circulated a compromise text covering dark patterns, protection of minors and compensation, seen by EURACTIV. The compromise included a definition of dark patterns much closer to the Parliament’s text but removed the non-exhaustive list included by lawmakers while anticipating a recital will be added. The text provides that the Commission will issue guidance on how to interpret the provisions. The protection of minors has been included but only for platforms that are designed for this age segment or whose users are primarily from this segment. Moreover, platforms would not have to process additional data to assess the users’ age. Finally, the Parliament’s text on compensation was accepted in full, except for the word ‘direct’ that was considered too restrictive by consumer groups. Read more.
Also this week:
- The EU negotiators are approaching a final deal on the DMA
- The UK’s Online Safety Bill was presented to Parliament
- EURACTIV interviewed a top official in the EU fight against Russian information war
- European cloud providers continue their antitrust fight with Microsoft with a new complaint
- None of the campaign websites of the French presidential candidates is GDPR compliant
Before we start: The Russian attack on Ukraine went hand in hand with coordinated attacks in the information space. We discuss the situation on the ground and the EU response with Domen Savič, CEO of Citizen D.
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Clearview for Ukraine. Ukraine’s Defence Ministry is receiving free access to the facial recognition technology of controversial firm Clearview AI. The company offered Ukraine the software to uncover Russian assailants, combat misinformation and identify the dead, as well as potentially identify people at checkpoints. The tech has not been offered to Russia and is on track to be deployed by other departments of Ukraine’s government in the near future. Some have warned, however, that the flaws that plague facial recognition systems in other circumstances, such as misidentification, could arise here too, potentially leading to civilian deaths or wrongful arrests. Read more.
Anti-competitive clouds. European cloud players have filed a competition complaint with the Commission alleging that Microsoft is abusing its dominant market position. French cloud company OVHcloud is among the complainants, who say that the US tech giant is “undermining fair competition and limiting consumer choice in the market for cloud services”, a claim that Microsoft rejects. The Commission will now decide whether to pursue the case, which is not the first to be brought against the company in the EU. Read more.
Deal clear. The Commission this week approved Amazon’s $8.5 million acquisition of entertainment company MGM following a competition investigation. The merger, it was concluded, poses no competition concerns in the European Economic Area as it will likely have no significant impact on areas of the market such as audio-visual content production, TV channel supply or the production and licensing of distribution rights.
Cyber resilience feedback. The Commission has opened a public consultation on its Cyber Resilience Act, which is set to establish common cybersecurity standards for products and services, including both tangible digital products and ancillary services such as non-embedded software. The bill is expected to introduce minimum cybersecurity requirements for connected devices through the entire product lifecycle, mandating obligations for economic actors, conformity assessment and market surveillance.
Data & privacy
Non-compliant campaigning. Data sovereignty might have become a key principle in the run-up to the French election, but not a single contender’s campaign website follows the GDPR. Violations range from data collection to consent and transparency, with the worst offender being the site of incumbent President Emmanuel Macron. Macron’s site was found to be collecting the greatest volume of personal data (sometimes before user consent has been given) through US-based services such as Google Analytics, which France’s data authority, CNIL, recently concluded was no longer compatible with EU data protection law. Read more.
Trustful exchanges. A new report by the Global Data & Marketing Alliance (GDMA) has found that 53% of global consumers agree that data exchange is crucial for modern society to function properly and that trust is the most important factor when it comes to people’s willingness to share their data. Overall, however, 82% of consumers say they are prepared to engage with the data economy.
Responsible social protection. Researchers have developed a new framework for corporate social responsibility when it comes to data protection, intended to ensure lawful, ethical, transparent, fair and secure data processing. Among its pillars is the embedding of these principles into the design of processes, transparency with users about how their data is used, balancing profit with people’s protection, the publication of findings and awareness-raising amongst citizens.
Russia’s disinfo strategy. Russia is deploying “systematic, coordinated information manipulation operations” using a combination of state media, social media and “information portals”, the European External Action Service’s head of strategic communications told EURACTIV this week. Disinformation is clustered around three narratives, Lutz Güllner said: a reversal of cause and consequence, the denial of Ukraine’s right to exist as a state and propaganda in terms of losses and gains, atrocities and the humanitarian situation. To combat the threat of information manipulation, he said, the EU needs to increase its situational awareness, develop better tools to detect disinformation and strengthen its cooperation with platforms. Read more.
Digital Markets Act
Decisive week. The French Presidency will request an updated mandate from the EU ambassadors gathered at COREPER next Wednesday (23 March), with the intention of reaching an agreement with the European Parliament the following day. However, several EU diplomatic sources stressed to EURACTIV that there are many important points still outstanding, notably the thresholds, fines, interoperability, FRAND and killer acquisitions. Read here a full analysis of where things are standing now.
Any surprise? Some member states, especially smaller ones, have been disgruntled at the way the French Presidency presents proposals at the very last minute, not leaving enough time to prepare, and assumes the text is accepted if none raises strong opposition. Given the rush to close the deal, there has been little time to analyse the technical aspects or legal implications of the proposal. Moreover, some diplomats suspect that France avoided raising certain points during the Council negotiations knowing it could get them through as concessions to the Parliament. None wants to be the country that prevents the French from achieving the deal, but that does not mean that COREPER will agree with everything the Presidency has asked for in the new mandate.
Pas disponible. The French negotiators are under huge pressure to close the deal on 24 March, as the government members will not be allowed to travel as of 1 April. Therefore, if the Council does not agree to all the concessions, it would be up to the Parliament to move. “Will they really decline a deal if they don’t get something on interoperability?” an EU diplomat told EURACTIV. What happens then? There are at least two more scenarios. If an additional trilogue is needed, then there is a ‘fall back’ trilogue planned for 5 April in Strasbourg, for which digital minister Cedric O could either be granted special permission, or he could be replaced by the French ambassador to the EU. Alternatively, a political deal in principle is announced on Thursday, but some decisive details are sent to the technical level. The latter is the possibility EU diplomats fear the most, as there might no longer be accountability for radical changes.
A European metaverse? During the presentation of his programme, the outgoing French president pledged to “fight to build a European metaverse” in order to “create and not depend on Anglo-Saxon or Chinese players and aggregators who will be able to completely bypass the rules of respecting copyright and neighbouring rights today”. Contacted by EURACTIV, several party members familiar with Emmanuel Macron’s digital agenda had no further details on what was behind this announcement. EURACTIV understand Macron’s intention was to stress that French and European tech should not fail to turn the corner on metaverse and be active players in its development. The subject is at the heart of the thoughts of the current secretary of state for digital affairs, Cédric O. The informal meeting of European telecommunications ministers was also supposed to address the challenges of the metaverse, before being diverted by the crisis in Ukraine.
EUCO conclusions. Reducing the EU’s strategic dependence in key sensitive areas, including semiconductors and digital is among the leaked conclusions from the next European Council meeting, seen by EURACTIV. Among the goals set out is the completion of the Single Market, particularly when it comes to digital, the strict enforcement of Single Market rules and sustaining the EU’s position as an international standard setter.
The cost of information. Reporting on the war in Ukraine is becoming an increasingly deadly endeavour. At least four journalists have been killed so far – three this week – and many more have been injured or targeted by Russian forces. A number of reporters already on the ground say they’ve received questions from others about how to reach the country; they, as well as international media organisations, are now warning against travel to the country due to the dangers of reporting on a conflict zone without sufficient preparation or support. Read more.
Speaking out. As accessibility to independent information narrows in Russia, a Russian journalist took radical action to speak out against the war in Ukraine, running onto the set of a Russian state TV live news broadcast, holding a sign that read “NO WAR. Stop the war. Don’t believe the propaganda. They are lying to you here.” The woman, an employee at the channel, was arrested and fined but drew praise from many observers, including Ukraine’s President Volodymyr Zelenskyy, who thanked her in a video address. Read more.
Steady increase. The number of SLAPP (Strategic Lawsuits Against Public Participation) cases in Europe is increasing each year, with the highest number on record having occurred in 2021, according to a new report by the Coalition Against SLAPPs in Europe (CASE). The research, which comes ahead of a Commission anti-SLAPPs initiative set to be launched next month, finds that, while SLAPPs occur across Europe, the highest number per capita are in Malta, the homeland of murdered journalist Daphne Caruana Galizia – who at the time of her death had over 50 pending against her.
UK’s DSA. The UK’s Online Safety Bill was introduced into Parliament on Thursday after a lengthy review process. The bill addresses online harms and, much like the EU’s DSA, centres on the accountability of the largest platforms when it comes to protecting users. The legislation covers a wide array of issues, from cyber flashing and child abuse to anonymous trolls and online fraud and implementation are left to the UK’s media regulator, Ofcom. Penalties for non-compliance could amount to 10% of a company’s annual turnover, and executives are also liable to criminal charges with prison times of up to two years. Read more.
TikTok on the bench. TikTok has been accused of allowing the spread of Kremlin propaganda via a “network of coordinated accounts” attracting millions of views although the platform has announced a ban on the publication of new content in Russia. A report by NGO Tracking Exposed found that material was still being published despite the prohibition, which was brought in in response to Russia’s criminalisation of the spread of “fake news” about the war in Ukraine. The report also criticised the company for blocking Russian users’ access to content published outside the country, which it says further narrows the independent information available to them in an already tightly controlled information space. Read more.
The future is open. Open RAN (radio access network) is creating the conditions for much greater innovation within the telecom market and has drawn support from a number of telecom operators, such as Deutsche Telekom, Orange and Vodafone, as a result. Other leading network providers, however, are less enthusiastic and see its use as a threat to their market shares and profit margins. Ericsson is reportedly putting forth the most strident opposition to Open RAN, while Nokia and Huawei also have much to lose. In the long run, however, innovation looks set to win; with some telecom operators already deploying Open RAN, even those with the most vested interests in stalling its progression may eventually have to accept its rise. Read more.
What else we’re reading this week:
Intel: heavy spending is no guarantee of a return to a leading position (FT)
Russia is risking the creation of a “splinternet”—and it could be irreversible (MIT Technology Review)
How publishers are working to make their Russia-Ukraine coverage available to readers in those countries (Digiday)