Digital Brief: Apple scrutinised, TERREG approved, ePrivacy derogated

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“By setting strict rules on the App store that disadvantage competing music streaming services, Apple deprives users of cheaper music streaming choices and distorts competition”

-Executive Vice-President for Digital Margrethe Vestager

Story of the week: in a landmark decision, the European Commission issued a Statement of Objections against Apple over the music streaming case. This is a formal step in an EU antitrust investigation against Apple, which is also being scrutinised over its payment service Apple Pay.

The music streaming case was initiated by Spotify’s complaint that accused Apple of abusing of its market power to favour its own Apple Music app. The European Commission’s preliminary finding acknowledged the complaint, considering that Apple has a gatekeeping power since Apple devices are only able to download apps from the App Store.

In particular, the Commission raised concerns on the 30% fees Apple charges for the subscription of paid music streaming services. Similarly, the EU executive challenged the anti-steering measures Apple has taken to prevent music streaming services to promote different services to their users or even upgrade their subscription, as it is the case for Spotify. Apple will be able to reply to the Commission’s concerns in writing and request an oral hearing to present their argument to the European Commission and national antitrust authorities.

Don’t miss: the Regulation on preventing the dissemination of terrorist content online (TERREG) was formally approved in the European Parliament on Wednesday (28 April) without a plenary vote. The new legal framework will allow law enforcement agencies to request online platforms to remove content that is associated to terrorist activities. The request will not need judicial approval and will have transnational application, meaning that it will apply also for content uploaded in other countries.

Several NGOs opposed the proposal in an open letter, arguing it would pose serious limits to the freedom of speech. The main concerns relate to the fact that anti-terrorist legislation has frequently been used in authoritarian countries to silent political opposition, and this provision leaves ample discretion to police authorities to take down content.

Also this week: Data Governance Act receives 600+ amendments, data breach the new normal, Apple takes on Facebook, Turkey’s clash with crypto, and much more…

Apple set to change the app market

 

Data & privacy

Data Governance. The Data Governance Act (DGA) is the first legislative milestone of the Commission’s grand Data Strategy. The file is currently being discussed in the parliamentary committee on Industry, Research and Energy (ITRE), which published on Thursday (29 April) more than 600 amendments.

The rapporteur Angelika Niebler (EPP, Germany) told EURACTIV that “most of the amendments are very constructive additions” and particular attention will be given to third country access to sensitive public data to bring the proposal in line with GDPR. The most significant addition for the moment seems to come from shadow rapporteur Miapetra Kumpula-Natri (S&D, Finland), who added a chapter defining the key principles for European common data spaces.

ePrivacy derogated. The Fifth Trialogue Negotiation was successful in finding an agreement based on a compromise text leaked by EURACTIV. According to these new provisions, service providers will be able to put in place on a voluntary basis monitoring mechanisms with the purpose of reporting child abuse materials and initiation attempts (i.e. grooming). Representatives of the European Parliament have previously raised concerns about the risks that the algorithms might erroneously send private conversations and intimate pictures to police authorities. The provision agreement will now need to be approved by the EU Council.

Data breach the new normal. According to an internal communication leaked by DataNews, Facebook’s PR strategy would be to “normalise” data breaches. The email was addressed to the PR staff of the EMEA (Europe, Middle East and Africa) region, following the leak of 533 million users’ phone numbers. The leak actually occurred in 2019, but Facebook never mentioned it publicly until the data was made available in a hacker forum at the beginning of the month. In reaction to the fallout, Facebook argued it was not an actually data leak, contending that the scrapped data was already publicly available. Ireland’s Data Protection Commission (DPC) has initiated an investigation on the matter.

Media

Deadly threats. Costas Vaxevanis, the publisher of the newspaper Documento, announced on social media that he has received death threats. Only two weeks before, another journalist, Giorgos Karaivaz, was killed in a mafia-style execution. Documento is a media outlet critical towards the Greek government and was recently excluded by the allocation of €20 million in public funding meant to support the media sector during the COVID crisis.

Don’t speak. The New York Times has reported that the Indian government ordered the removal of around 100 critical posts from Twitter, Facebook and Instagram. All platforms have reportedly complied with the request. New Delhi argues that the posts were spreading disinformation, but several critics say the move was intended to silence criticism of the government’s management of the pandemic.

Disinformation

Vaccine conspiracies. The European External Action Service (EEAS) published an updated Special Report on disinformation surrounding the COVID-19 pandemic, covering the period December 2020 – April 2021. According to the report, disinformation initiatives have gathered pace together with the vaccine roll-out, targeting in particular Western-made vaccines. The report explicitly mentions Russia and China as actively sponsoring these disinformation attacks as part of a broader strategy of “vaccine diplomacy,” undermining trust in Western vaccines and institutions to promote their own state-produced vaccines.

Platforms

Bigger than ever. Big tech companies have been celebrating record earnings in the first quarter of 2021, compared to the same period last year. Apple (+54%) leads the way, followed by Facebook (+48%), Amazon (+44%), Alphabet (+34%), and Microsoft (+17%).

Private privacy. Apple has rolled out its new privacy feature this week as part of the iOS 14.5 software. The new privacy framework restricts obliges to app-makers to request explicit permission for tracking users, threatening the very business models of online platforms such as Facebook. In the past months, lawmakers in Europe and beyond have been showing signs that they are starting to take privacy concerns seriously, therefore companies such as Apple are feeling the need anticipate them by implementing their own privacy policy. Listen to the podcast for more.

Cybersecurity

Cyber-national guard. The Washington Post published a survey of cybersecurity experts, 63% of whom responded that the reaction of the Biden’s administration to the Russian cyberattack on SolarsWind was “proportionate”. Nonetheless, a bipartisan group of policymakers have proposed a “Civilian Cybersecurity Reserve” which would gather trained cybersecurity experts to support the Pentagon and the Department of Homeland Security. As it often happens in the United States, after a wake up call the authorities (over)react, soon enough outgunning the competition. While lawmakers are now lamenting a “severe cyber workforce shortage”, do not expect that state of affairs to last for too long.

Cryptocurrencies

Turkey vs. crypto. Turkey is still struggling to contain inflation, which according to Reuters skyrocketed to 16% this year. To protect their savings from the weakening of the Lira, many Turks turned to crypto currencies. Ankara tried to counter the trend, as earlier this month Turkey’s central bank introduced a total ban on cryptocurrencies. Turkish authorities are also prosecuting two digital currency trading platforms, Vebitcoin and Thodex, with several people arrested on fraud charges and Thodex’s founder reported fleeing the country. President Recep Tayyip Erdogan stated his government will swiftly regulate the digital currency market, as a regulatory void might also lead to scams and pyramid schemes.

Why it matters. Turkey is an interesting case, as people flee to cryptocurrencies amid potential future soaring inflation. This might cause a vicious circle, as inflation is caused by lack of trust in the future strength of the currency, hence public authorities have a strong incentive to buck the trend. While Ankara’s measures have caused the crypto market to drop worldwide, recent estimates consider that all cryptos combined would be worth $2.2 trillion. In other words, Turkey is up against a market worth three times its GDP and how things turn out might be a textbook case for similar situations in the future.

 

What else I’m reading this week:

  • The Irish Data Protection Commissioner (DPC) is also investigating major political parties for allegedly breaching data protection rules.
  • Since the US-China trade war, the global chip shortage is getting worse and might have wide repercussions on many industries.
  • Bejin is getting a head start on 6G, as China is reporting 35% of the world’s patents on the new generation of telecommunication technologies.

[Edited by Josie Le Blond]

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