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11/12/2016

Commission to open probe into tech companies’ algorithms next year

Digital

Commission to open probe into tech companies’ algorithms next year

The European Commission will open an inquiry into how companies use algorithms.

[Day Donaldson/Flickr]

The European Commission is considering actions to make internet firms share details about the algorithms they use to present information like news, user posts or search engine results.

The executive’s technology policy unit will open a two-year-long inquiry in mid-2017 into how social media companies, search engines and other technology firms organise data and show information, Commission officials said.

Algorithms are the formulas that determine what results are shown on social media feeds or on search engines, and can also be used to calculate election results and run other technologies.

They have come under increased scrutiny lately, including from media companies and social media users who complain that results on Facebook’s news feed are tweaked to display certain views. Facebook users are shown results based on their interests and previous page views, meaning search results vary and users are more likely to see information they already agree with.

The Commission’s move to investigate algorithms follows an announcement from the EU’s technology policy commissioners this spring that they are considering legislation to rein in online platforms. Many internet companies were alarmed by the announcement, which named Google, Facebook, Amazon Marketplace and eBay as examples of platforms—and prompted criticism that the Commission’s plans unfairly targeted big American firms.

“Greater transparency is also needed for users to understand how the information presented to them is filtered, shaped or personalised, especially when this information forms the basis of purchasing decisions or influences their participation in civic or democratic life,” the announcement reads.

Commission wants to regulate US-dominated online platform market

Amid controversy over the European Commission’s increased scrutiny of American technology companies, the EU executive will propose new rules regulating online platforms, according to a leaked draft document obtained by EurActiv.com.

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One Commission official told EurActiv.com that the probe of companies’ algorithms is not intended to turn into a sweeping legislative proposal that would force giants like Facebook or Google to expose how they filter information.

“Maybe some small things where it does make sense to regulate,” the official said.

There have already been calls from national governments to crack down on how internet firms use algorithms.

France’s digital council, a government-funded watchdog organisation for technology issues, recommended that a European rating agency for online platforms could be set up to rank companies according to how neutrally they present information.

Two weeks ago, Angela Merkel attracted attention for a short mention of algorithms during a speech she gave at a Munich media industry conference.

“Personally I think algorithms have to be more transparent so interested citizens are aware of what happens when they and other people use media,” Merkel said.

“If these mechanisms are not more transparent and more clear, that can lead to a distortion of reality,” she added. Merkel also warned that large internet platforms can use their algorithms to crowd out competitors.

Those complaints appear to have resonated in Brussels. The Commission has earmarked more than half a million euros to analyse companies’ use of algorithms and eventually come up with a fix that will promote transparency, according to sources involved in the project.

“The Commission wants to ensure that platforms are more transparent and play their role when it comes to protecting consumers or contributing to the economy. This includes the need for greater transparency around the way that platforms present, filter, shape or personalise information – often on the basis of algorithms,” said European Commission spokeswoman Nathalie Vandystadt.

The proposal to investigate how companies’ algorithms work and whether transparency rules are needed comes from Finnish Socialist MEP Liisa Jaakonsaari. She filed the proposal using an exception to EU budget rules that allows MEPs to suggest funds go to a specific policy area. Jaakonsaari will not be involved in the Commission’s inquiry, but she says there is a need for legislation that will change how companies use algorithms.

“We certainly need some kind of new rules and instructions,” Jaakonsaari told EurActiv.

“The lack of transparency is one thing that in the future could cause scepticism about robots and the new technology that’s coming,” she said.

Italy set to pull ahead of Brussels on online platform regulation

A vote next week in the Italian Parliament could create Europe’s first regulation on online platforms. The MP who proposed the bill is meeting officials in Brussels this week while the European Commission considers drafting its own legislation.

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Background

The European Commission announced an inquiry into online 'platforms' in May 2016 that widely perceived to be a move to target large US-based tech companies. Commission Vice President Andrus Ansip said the Commission would take a "problem-oriented" approach to platforms and would not try to regulate them across the board.