Digital Brief: DGA adopted, DSA opinion, WhatsApp complaints

The Digital Brief is EURACTIV's weekly tech newsletter.

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“We want to build up a European data economy. The personal data revolution was made by Facebook, Google and others. But Europe has a really strong industrial base, hence making industrial data available for commercial purposes is very important.”

-Angelika Niebler, rapporteur for the Data Governance Act (DGA)

Story of the week: The Data Governance Act was adopted in the ITRE committee on Friday (16 July) with a landslide majority (66 in favour, 6 abstentions, none against). The legislative proposal is the first building block of the EU data strategy, as it is intended to define the governance of the European data spaces. Angelika Niebler (EPP, Germany) told EURACTIV that while US tech companies managed to dominate the personal data revolution, Europe should make use of its strong industrial base and make industrial data readily available. The governance structure will be centred around data intermediaries, which will have to fulfil specific neutrality obligations that avoid the concentration of data in the hands of few major players. The intent is to create a trusted environment for European SMEs to reap the benefits of the data economy. DGA-compliant intermediaries will be able to receive a ‘soft’ certification from the competent national authorities. An advisory body gathering key stakeholders was also introduced to facilitate agreement on harmonised standards and interoperability requirements. Read more.

Don’t miss: The Advocate General Henrik Saugmandsgaard Øe advised the EU Court of Justice to dismiss the case Poland raised against Article 17 of the Copyright Directive. According to Warsaw’s legal challenge, the provisions meant to prevent copyright breaches are not compatible with the right to freedom of expression. In particular, online platforms will have to put in place automated content recognition tools to avoid being legally responsible for illegal uploads from their users. Although the opinion considers these measures to be compatible with the Charter of Fundamental Rights, the AG Øe made two important caveats. Content-sharing service providers will need to ensure that the exceptions included under Article 17 are expected ex-ante, rather than leaving the users to redress erroneous removals with the platforms. In addition, online providers will need to limit their blocking to content that is manifestly illegal, and abstain from intervening in ambiguous situations. Although the legal advice is not binding, it is usually indicative of the top court’s final ruling. Read more.

Also this week: 

  • The LIBE committee adopted its opinion on the DSA.
  • WhatsApp faces complaints from consumer organisations over privacy policy.
  • Google got fined €500 million for not negotiation in ‘good faith’ with French publishers.
  • EU global connectivity strategy raises more questions than provides answers.

Before we start: The green and digital transitions rank on top of the EU agenda, but as far as digital devices are concerned, they do not really go together. Thomas Opsomer, Repair Policy Engineer at iFixit, explains the right to repair campaign, the environmental impact of electronic products and how tech companies are preventing independent repairs to remain in control of the supply chain. We also discussed what the EU is doing and should do to make digital devices more sustainable. Listen to the podcast for more.

Right to repair: how sustainable are our electronic devices?

DSA

LIBE opinion finalised. The European Parliament’s Civil Liberties Justice and Home Affairs (LIBE) committee adopted Patrick Breyer’s opinion report on the fundamental rights implications of the Digital Services Act (DSA). The report argues for a passage from targeted to contextual advertising, anonymity online and introduces the ‘right to encryption’. It also makes the case for no internet blocking, notably through automated content recognition tools, and the need for ex-ante judicial approval for cross-country content removal requests. The interoperability requirements for cross-platform interactions was rejected.

Platforms

WhatsApp under fire. The European Consumer Organisation (BEUC) and eight of its members initiated on Monday complaint proceedings against WhatsApp, arguing that the messaging service has been unfairly pressuring users to accept its new privacy policy. The group says that the personal data consequences of acceptance are not explained to the platform’s users who, for months, have been receiving repeated notifications asking them to agree to the new terms or risk losing access to the app. The consumer organisations argue that this behaviour constitutes a violation of the EU Unfair Commercial Practices Directive by WhatsApp. Read more.

Ban dismissed. WhatsApp can however breathe a sigh of relief this week as the European Data Protection Board (EDPB) dismissed a ban request initiated by the Hamburg data protection authority for lack of evidence. The ban was imposed under the urgency procedures of GDPR, as the German supervisory authority argued the new privacy policy of the messaging app breached the EU privacy framework, notably as WhatsApp was allegedly sharing user data with parent company Facebook. The EDPB has nonetheless tasked the relevant supervisory authority, the Irish Data Protection Commissioner, to carry out an investigation as a matter of priority on the role Facebook might have in processing WhatsApp users’ data.

Net neutrality makes a return. The Biden administration has announced plans to reinstate net neutrality rules introduced by Obama but repealed by Trump. The rules, originally adopted in 2015, mean broadband providers must allow access to all sites at an equal speed, preventing deals for preferential lanes. The move has been met with pushback from the broadband industry but even some Republican members of Congress, traditionally opposed to the concept of net neutrality, have begun to signal a willingness to consider similar measures in other areas of online regulation.

Calls for recusal. Facebook has petitioned to have Lina Khan, Chair of the US Federal Trade Commission (FTC), recuse herself from an ongoing antitrust lawsuit that pits the FTC against the platform. Facebook argues that public statements previously made by Khan, a big tech critic, accusing the company of bad conduct prejudice her against them in the current case. This is not the first time that a company has called for the recusal of Khan, who assumed the role of chair just a few weeks ago. In June, Amazon argued that she should not participate in any antitrust investigation against them as a result of past statements she had made about the company.

Transparency tussle. A long-standing battle within Facebook over just how transparent the company should strive to be ended with the breakup of CrowdTangle, a data analytics tool owned by the platform. The tool, which provided analytics on trends and posts’ performance, had been attracting the wrong kind of attention for Facebook, after journalists began using it to show how much engagement right-wing pages and figures were getting, compared to mainstream news sources. In April, after a stand-off between executives in favour of selective disclosure of this information and those who backed open access to it, the former won and the CrowdTangle team was dispersed.

Copyright

Google’s costly defeat. Google has been fined €500 million by the French competition authority for failing to negotiate with news publishers and agencies “in good faith” over neighbouring rights, which entitle them to remuneration when their copyrighted content is used by platforms. France, the first state to transpose the EU’s Copyright Directive into national law, reached a deal with Google in 2020 over negotiations, which the competition authority this week accused the company of breaching. Google now has two months to comply with the order or it will face additional financial penalties. Read more.

Industrial strategy

Connecting who? The Foreign Affairs Council has launched A Globally Connected Europe, an initiative intended to counter China’s Belt and Road, a global infrastructural plan. The EU grand strategy has been floating around for several years, and the reason for launching it now – after eight years of delay compared to Beijing – remains unclear. In fact, the Council conclusions are very vague, leaving unclear which geographical areas and type of infrastructural projects will include, although digital connectivity is a growing chunk of EU international partnerships. The budget is the other big question mark, with the worst-case scenario being a rebranding of existing projects under this new umbrella. Read more.

Divisions grow. Ideological differences and vested interests remain underneath the discussions on the future of Europe’s industrial strategy. Those on the more interventionist side, such as France and Germany, would prefer to see a stronger state role in boosting domestic capacity through European champions, deploying a protectionist approach if needed. Nordic countries and smaller member states are backing a more free trade-oriented strategy, preferring to buy the best available technology regardless of its geographical origin. What seems a theoretical debate has real-life consequences when awarding public procurement procedures. Read more.

Tech controls tighten. Beijing’s Cyberspace Administration (CAC) has issued a draft revision of its cybersecurity review rules, requiring that companies controlling the data of more than 1 million users obtain permission from regulators before filing for IPOs overseas. Experts say that the revision, which comes amid a broader crackdown on technology firms by the government, will make it nearly impossible for Chinese internet companies to get listed on foreign exchanges. The move comes a week after an investigation was launched into ride-hailing app DiDi just days after it began trading in the US.

Grants open. The European Research Council has adopted its second work programme under the Horizon Europe scheme, featuring more than €2.4 billion worth of grants for over 1000 scientists and scholars. The funds will be awarded via grant competitions open to researchers who work in or are willing to move to Europe.

DMA

DMA criticised. Andreas Mundt, head of the German competition authority, has taken aim at the DMA, describing its rules as “too narrow” and potentially inadequate when it comes to catching anti-competitive behaviour by the gatekeeper platforms it targets such as Google and Facebook. Mundt told the Financial Times that, given that the DMA’s rules are based on the past behaviour of these companies, it may miss new problematic behaviour.

Data & privacy

ePrivacy controversy continues. European Parliament Vice-President Marcel Kolaja has strongly criticized the EU’s new ePrivacy derogation, an interim regulation allowing providers of electronic communication services to scan users’ messages for material depicting child sex abuse and apply certain technologies for detecting grooming. Describing the monitoring of messages as “unacceptable”, Kolaja warned that the derogation was a “big blow to our digital privacy.” Read more.

Privacy battle heats up. A contest over privacy is underway between two sides of the internet. While the entities that build browsers, such as Apple, Microsoft and Google, are looking for new privacy mechanisms in response to calls for better protection from regulators and users, the companies that rely on cross-site tracking, for example, from giants like Facebook to platforms, are pushing back. Much of the controversy stems from Google’s planned “privacy sandbox” which would remove from Chrome third-party cookies used to track users’ online activity.

Public consultation opens. The European Data Protection Board this week opened a public consultation on its Guidelines on Codes of Conduct as Tools for Transfer. The GDPR requires safeguards to be put in place when personal data is being shared with third countries or international organisations and codes of conduct have been proposed as a new mechanism for doing this. The consultation opened on Wednesday and will close on 1 October.

Lagging e-governance. Germany was ranked the last OECD country for open data in the public sector. The German government has already taken initiatives to catch up by adopting the Open Data Strategy and amending the E-government Act, which taken together might facilitate the accessibility to public sector data. However, the legal grounds for private companies to access public data remains unclear. Read more.

Media

Media freedom narrowed in Poland. A draft bill submitted to the Polish parliament has raised concerns that press freedom is being reduced further in the country. The bill would prevent the granting of broadcasting licenses to foreign media, and is widely seen as targeting US-owned TVN24, a channel that is often critical of the government and which would, under the law, be unable to renew its licence when it expires later this year. The development comes amid a wider campaign by the ruling Law and Justice (PiS) party to “repolonise” the media sector, which critics say is really intended to clamp down on independent media. Read more.

Journalist dies after an attack. Dutch investigative journalist Peter R. de Vries, who was shot last week in Amsterdam, died on Thursday. De Vries, who had been threatened for his work as a crime reporter before, was attacked as he left a TV studio in an assault that drew international condemnation. Mark Rutte, the Dutch prime minister described de Vries’ death as “almost incomprehensible.” This marks the second time this year that a crime reporter has been killed in Europe after Greek journalist Giorgos Karaivaz was murdered in Athens in April.

Targeting journalists. Concern has been growing over the safety of journalists in Europe after a string of incidents. The day after the shooting of Peter R. de Vries, Turkish journalist Erk Acarer, who has lived in exile in Germany since 2017, was attacked outside his home in Berlin by three men who told him to stop writing. Acarer, a critic of Turkey’s President, Recep Tayyip Erdogan, was prosecuted along with other journalists by Turkish authorities last year as a result of their reporting. A few days later, Georgian cameraman Alexander Lashkarava, who was injured a week earlier in violent attacks on journalists covering a planned Pride march in Tbilisi, was found dead. A number of independent TV stations in Georgia suspended their broadcasts for 24 hours in protest at the far-right attacks on the press, which led organisers to call off the city’s Pride event.

CharactHer. Last week saw the launch of an awareness campaign focused on gender equality focused on Europe’s film and news media sector. The campaign, which was kicked off at the Cannes film festival, is the product of a partnership between the European Commission and Collectif 50/50, a French organisation that aims to bring gender parity to film festivals. Part of the EU’s Media and Audiovisual Action Plan, it aims to bring attention to gender disparities and promote diversity and inclusion within these sectors, as well as encourage women to apply for jobs in fields traditionally considered “masculine” domains.

5G/Telecom

Fit for telecom. As the European Commission unveiled its “Fit for 55” package this week, which has the overarching aim of a 55% reduction in carbon emissions compared to 1990 levels by 2030, the European Telecommunications Network Operators’ Association (ETNO) has announced its support for the EU against climate change. ETNO voiced support for digital networks and services that would accelerate a transition towards climate neutrality, following a statement in March that saw telecom CEOs pledge to make their companies climate neutral by 2040.

China claims 5G victory. China’s vice minister of industry and information technology said this week that China had built the world’s largest 5G network, announcing at the 2021 China Internet Conference that the country had constructed over 900,000 base stations, 70% of the world’s total, according to state outlet People’s Daily.

WLAN gets an upgrade. Germany’s Federal Network Agency this week published a general allocation for WLAN in the 6 GHz range, nearly doubling the available spectrum. The expansion will mean higher data throughput and better connectivity for business and individual users, particularly in densely populated areas, which the agency hopes will drive digitalisation.

Cybersecurity

Microsoft’s purchase. Reports that Microsoft was set to acquire cybersecurity company RiskIQ were confirmed this week. Though details of the deal have not been disclosed, Bloomberg reported that Microsoft will hand over more than $500 million for the firm, which produces cloud software designed to detect security threats and allow users a better understanding of their vulnerability to attacks. As remote working and online systems grow in importance, increased attention is being paid to security. Among RiskIQ’s clients are Facebook, BMW and American Express.

Hackers go dark. REvil has disappeared following last week’s historic attack, which led to hundreds of companies around the world being targeted with demands totalling $70 million for the restoration of their data. The Russian gang has not been active online since Tuesday, and both their websites and the dark web portal used to conduct their ransom negotiations are offline. It is still not clear if the disappearance is the result of retaliation from the United States or the hacker collective simply decided to lay low for a while.

Ransomware targets education. Schools have been a major target of ransomware attacks in the US in the past year, zeroed in on for their low investment in tech security and wealth of personal data. Already strained by the pandemic, schools join an array of similarly vulnerable institutions such as hospitals that have found themselves on the receiving end of such attacks. At a time when online learning has become vital for many to access education, shutting down schools’ tech systems or holding them hostage can have rippling detrimental effects for students.

Ethical hackers win big. Microsoft has paid out $13.6 million to security researchers in the past year as part of its “bug bounty” programme, which allows ethical hackers to test organisations’ websites, apps or software for vulnerabilities, a practice for which they are often financially rewarded. The rewards went to over 340 researchers around the world, each of whom received an average of $10,000 per report they submitted.

Digital tax

Digital tax divergence. Austrian Finance Minister Gernot Blümel has said that the country’s digital tax, introduced last year, will not be suspended, even as the European Commission announced it would postpone its recently unveiled digital levy. Austria is among a number of European countries that have recently introduced digital taxes in response to failed attempts by the OECD to reach an agreement on a global minimum tax rate for large digital companies. Blümel has criticised the fact that big tech companies pay fewer taxes than other entities, citing this as the motivation behind Austria’s tax. Read more.

Digital Services Tax trends. A report by the European Centre for International Political Economy finds that the five European countries that have imposed a Digital Services Tax (DST) have seen a decline in their trade competitiveness in digital services in the last 15 years. The report outlines a “striking” difference in the digital services competitiveness of these states compared to others, offering a potential explanation for why some have opted to implement DSTs where others haven’t.

Space race

Space Command Centre launched. Germany has inaugurated its first space command centre, which will oversee satellites, track dangerous space junk and conduct military operations such as reconnaissance. In addition to cybersecurity, space has become a key focus area for military planners and policymakers. Read more.

Race to the edge of space. Richard Branson successfully reached and returned from the edge of space this week aboard a rocket plane built by his company Virgin Galactic. Branson beat fellow billionaires and aspiring space tourism leaders Jeff Besos and Elon Musk when he and his five fellow crew members left New Mexico for their destination, 53 miles above Earth, on Sunday. The live streamed journey comes ahead of the planned launch of a commercial service next year. Bezos intends to launch his own flight later this month and Musk has set his sights further from Earth, aiming to send civil astronauts to the International Space Station.

Digital euro

Digital euro moves ahead. The European Central Bank has launched the investigation stage of its digital euro project. Building on a report released nine months ago, this phase will last two years and will focus on issues to do with the digital currency’s design and distribution and legislative changes which might be needed to facilitate its introduction. The project aims to develop a digital version of money that would complement rather than replace cash.

Artificial Intelligence

Fake voices. Interest in AI-generated voices is growing. A number of companies are now offering services where text is immediately translated into an entirely natural-sounding voice, produced by AI deep learning based on the real voice of an actor. Algorithms based on a few hours of audio mean that synthetic voices now sound realistic rather than robotic, and have come close to being indistinguishable from the real deal.

AI reshapes market research. AI is reshaping the market research industry by tapping into data from large companies like Amazon or Walmart and allowing businesses to scan vast amounts of information at much faster rates and lesser costs. In a matter of minutes, AI is able to analyse market data and produce reports that would take human analysts’ months or even years. This kind of information availability could drastically reshape the way that businesses develop products and services, and the size of the companies that are able to competitively participate.

Intergalactic AI. Researchers have constructed an AI system to classify galaxies in their tens of thousands, a process that would normally take astronomers months. Using the architecture developed, the team says that they could classify over 100 million galaxies, research which could deepen our understanding of the nature and formation of these systems, and even the universe at large.

 

What else we are reading this week:

  • AI next frontier might be digital immortality. (The Wall Street Journal)
  • Internet outages are increasingly being engineered in moments of political crisis. (Axios)
  • Killer robots are no longer confined to fiction. Now that they’re here, what destruction do AI-powered weapons have the potential to cause? (Foreign Policy)
  • How are new technologies shaping the distribution of power between European states and what might the implications be for the geopolitics of the future? (European Council on Foreign Relations)

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