Digital agenda: Autumn/Winter Policy Briefing

This article is part of our special report All aboard: EU policy train builds up steam after summer.

After a turbulent start to 2020, in the second half of the year the EU will embark on a range of ambitious initiatives in the digital arena, some of which will be directly impacted by the coronavirus pandemic and its knock-on effects.

Below, we update you on developments in the digital policy agenda since the start of this year and give you a lowdown on the most important areas to look out for in the coming months as part of the EU’s digital transformation.

For all the latest on EU politics and policy in the field of digital affairs, sign up to our free weekly newsletter, the Digital Brief. 

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Platform Economy

Digital Services Act

The EU’s Digital Services Act is the EU’s attempt to regulate the online ecosystem, updating the 2000 eCommerce directive. The package will cover content and user moderation as well as new competition rules for so-called gatekeeper platforms. The European Commission is due to present the plans in December 2020. Public consultations on the plans are ongoing until 8 September.

The Digital Services Act marks the most ambitious attempt yet to rein in the operations of platform giants and, so far, the Commission has suggested that the plans could include measures to crack down on illegal and counterfeit sellers as well as new rules spanning online safety, liability, market dominance, online advertising and smart contracts, issues surrounding self-employment online, and the potential future governance framework for online services.

The EU’s Digital 9+1 coalition, including Belgium, Czech Republic, Denmark, Estonia, Finland, Ireland, Luxembourg, Netherlands, Poland and Sweden, have released a document calling for the Commission’s Digital Services Act package to abide by some of the central principles of the eCommerce directive, including the country of origin principle, the limited liability exemption, and the ban on a general monitoring obligation.

In Parliament, three initiative reports have already commenced, from the Committee on the Internal Market and Consumer Protection, the Committee on Legal Affairs, and the Committee on Civil Liberties, Justice and Home Affairs.

Competition

Alongside the DSA, the Commission is also attempting to create a level-playing field across the platform economy. Most recently, the EU’s digital chief Margrethe Vestager said that the EU and the US should formulate “common visions” on how best to regulate competition in the platform economy.

Certain remedies are being mulled over by the executive, including continued competition law enforcement, ex-ante regulation of digital platforms, and a possible new competition tool.

As for potential ex-ante regulation of digital gatekeeper platforms, Vestager has shed some light on a series of options, including one possible rule that “prohibits platforms from displaying their own downstream services more prominently than those of rivals.”

On regulation of the use of data, Vestager suggests establishing a ‘data silo’ rule, “where a conglomerate platform is prohibited from using specific data sets for certain business purposes in order to prevent it leveraging from one market to another.”

Earlier this year, the Commission announced it would unveil a new competition tool before the close of 2020. The tool will be designed to mitigate structural risks in markets as well as intervene in situations whereby a market is close to tipping. Consultations on the measures are ongoing.

Online terrorist content & Hate Speech

Talks between the EU institutions on the online terrorist content regulation have stalled since the coronavirus hit Europe. The plans could potentially see online platforms being forced to remove flagged terrorist content within a one-hour timeframe, in addition to introducing ‘proactive measures’ such as upload filters.

While the Parliament is against the idea of upload filters being included in the text, the Council and Commission both support their inclusion. For their part, the Commission is eager to progress quickly. An official recently told EURACTIV that “from our point of view it’s important to make progress quickly because terrorist content online is precisely the sort of activity that doesn’t at all stop in the current situation.”

The German Presidency wants negotiations to resume as soon as possible. Nevertheless, with a host of outstanding issues including cross-border removal orders and the role of platforms in flagging and removing content, it is unlikely that talks will conclude anytime soon.

Elsewhere, the European Commission has applauded efforts by some of the world’s largest tech platforms in stifling the spread of illegal content, in the last evaluation of the EU’s code on countering illegal hate speech online before the Digital Services Act is presented later this year.

Results of the evaluation of the code show that 90% of flagged content was ‘assessed’ within 24 hours, while 71% of such content was eventually removed.

There have been recent developments in the area of online hate speech in France, where the Constitutional Council rejected large parts of a draft law against online hate speech which would have obliged social media giants to remove hateful content within 24 hours.

Online abuse

The European Commission will propose legislation later this year and in 2021 that will force online platforms to undertake measures to stop the spread of online child abuse.

As part of rules under the EU’s Electronic Communications Code that come into force in December, the scope of the 2000 e-Commerce Directive will be broadened, having the effect of preventing certain companies from continuing their own measures on the voluntary detection, removal and reporting of child sexual abuse online.

Following this initiative, the Commission will put forward further legislation in the second quarter of 2021, to oblige online service providers to “detect known child sexual abuse material and require them to report that material to public authorities.”

Presenting the future plans in July, the EU’s home affairs chief Ylva Johansson also floated the idea of creating a new European centre to prevent and counter child sexual abuse, with a number of responsibilities including proactively searching online content and notifying companies of potential illegalities at play.

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Data

Data strategy

The Commission’s data strategy, presented in February 2020, aims to establish a single European market for data, allowing public and private actors “easy access” to huge reserves of industrial information. The strategy features work produced under four pillars covering the governance model for the access, use and reuse of such data, capacity building for Europe’s data ecosystem, empowering businesses and individuals in their knowledge of how data can benefit them, and also the specific establishment of data spaces across a range of sectors.

Plans that the Commission has thus far put forward include the creation of nine common EU data spaces across sectors including healthcare, agriculture and energy, as well as the establishment of a Data Act in 2021, that could “foster business-to-government data sharing for the public interest.”

Feedback on a public consultation that concluded earlier this year has recently been published by the Commission and can be found here.

S&D MEP Miapetra Kumpula-Natri, rapporteur in the European Parliament for the Industry Committee’s report on the EU Data Strategy, recently noted her general thoughts on the plans, highlighting the importance of common guidelines for cross-sectoral data flows, and also pitching the establishment of a data governance body.

Later in the year, a legislative framework on common European data spaces will be presented by the Commission, and an implementing act on a list of high-value datasets will come forth in 2021.

Gaia-X

Meanwhile, honing in on Europe’s cloud dataspace, in June, France and Germany’s launched their ambitious bid to create a European cloud data infrastructure to stave off US and Chinese competitors.

The Gaia-X initiative will set European standards for data storage and also function as a platform for businesses to search for data storage providers, in addition to offering a secure environment for the cross-business sharing of data in Europe.

ePrivacy

Nearly four years on, negotiations in the Council on the EU’s bid to protect data transmitted over electronic communications as part of the e-Privacy regulation continues. In mid-July national delegations were consulted as part of a Council Telecoms working party on how best to move forward with the plans, particularly in the context of the German Presidency’s hopes of reaching an agreement before the end of the year.

The German Presidency stated that agreement on Articles 6 to 6d and Article 8 is necessary to move forward. Article 6 of the plans covers the accessing of metadata without the users’ consent while Article 8 hones in on the protection of end-users’ terminal equipment information.

Privacy Shield

The EU-US Privacy Shield agreement that attempts to guarantee the secure transmission of EU data to the United States, was declared invalid by the European Court of Justice, in a ruling that will provoke major disruption to transatlantic data flows.

The ruling by Europe’s highest court found that the scope and pervasiveness of the US surveillance framework does not allow for a sufficient degree of protection for European data, putting it at risk of violating rights afforded to citizens under the EU’s general data protection regulation (GDPR). Read more here.

Since the strike down was made, it has transpired that the US Commerce Department and the European Commission have commenced talks on building a new privacy shield agreement. However, there are those that feel that the reach of the US’s surveillance regime will never allow for a truly safe transmission of EU data to the country. For his part, Austrian Privacy activist Max Schrems, a defendant in the recent privacy shield case, hopes that there could be a push for surveillance law reform in the US, subsequent to the ECJ’s ruling.

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Technology

Artificial Intelligence

In February 2020, the Commission published its Artificial Intelligence White Paper, in which a series of ‘high-risk’ technologies were earmarked for future oversight, including those in ‘critical sectors’ and those deemed to be of ‘critical use.’

Subsequent to the presentation of the paper, a consultation was launched which closed on 14 June. Concerns submitted in response to the consultation included the use of biometric technology in AI tech, to the operation of Automated Decision Making (ADM) software. However, stakeholders supporting a softer-regulatory approach have hit out at the Commission’s intentions to produce conformity assessments for high-risk Artificial Intelligence applications.

The Commission will present a follow-up to the White Paper, including on safety, liability, fundamental rights and data in Q1 2021. Commissioner Vestager has, for her part, recently spoken of her opposition to certain Artificial Intelligence applications, including forms of predictive policing.

Cybersecurity

In late July, the European Union imposed travel and financial sanctions on a department of Russia’s military intelligence service and on firms from North Korea and China over their suspected participation in major cyberattacks across the world. This came as the European Commission presented its new Security Union strategy, which included measures to bolster cybersecurity standards for critical infrastructure as well as preparing the bloc for emerging threats in “real and digital” environments.

Moreover, a new cybersecurity strategy is foreseen in light of the various cyberattacks that hit hospitals across the EU. You may recall that Commission President von der Leyen suggested that China may have been behind the offensive.

The new cybersecurity strategy was included in the Commission’s recovery plans presented earlier this year. The EU executive says it “will look at how to boost EU-level cooperation, knowledge and capacity. It will also help Europe strengthen its industrial capabilities and partnerships, and encourage the emergence of SMEs in the field.” The Commission has also stated that a proposal for “additional measures on Critical Infrastructure Protection” will be put forward later this year.

Moreover, a review of the Directive on security of network and information systems will also come in Q4 this year, and EURACTIV was recently informed that there is likely to be a potential widening in the scope of operators of essential services.

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Telecoms

5G

Current goals in the field include a launch of 5G services in all EU member states by the end of 2020 at the latest, as well as a ‘rapid build-up’ that will ensure “uninterrupted 5G coverage in urban areas and along main transport paths by 2025,” as outlined in the 2016 5G Action Plan for Europe.

In May, Vestager urged EU telecoms ministers to “limit as much as possible” any delays to their 5G spectrum assignments.

As part of a series of measures unveiled by the Commission in January’s 5G Toolbox, member states were tasked with assessing the risk profile of telecom providers, with a view to applying restrictions for those vendors considered to be high-risk.

A progress report on the plans, presented by the Commission towards the end of July, found that EU nations must make urgent progress on mitigating the risks to 5G telecommunications networks posed by certain high-risk suppliers.

The call comes at a time when Washington continues to ramp up pressure on the EU to ban Chinese telecoms provider Huawei, following recent moves in the UK and France to limit the company’s involvement in their 5G infrastructure.

The Commission, alongside the member states and the EU’s cyber agency, ENISA, will continue to monitor compliance with the 5G toolbox, with a view to potentially analysing the need for stricter security baselines to be recommended at EU level in the future.

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Money

The Budget and Recovery Fund

In July, EU leaders reached a ‘historic agreement’ on the new multi-annual financial framework and the recovery and resilience fund. However, in order to achieve these new agreements, substantial cuts have been made to the bloc’s various funding programs, including in digital fields. As things stand, below you will find a short breakdown of what is on offer in the digital arena. Bear in mind, however, that Parliament is still to sign off on the long-term budget, and the house still has a number of concerns. Should Parliament not approve the plans, the recovery fund could also be impacted.

Horizon Europe is the bloc’s research and innovation funding framework and while there has been an increase from the previous MFF, some will question whether it is sufficient in a radically new global context. However, the plan is in line for a €5bn increase under the recovery fund.

The Connecting Europe facility is designed to foster an “up-to-date, high-performance infrastructure to help connect and integrate the Union and all its regions, in the transport, energy and digital sectors.”

In terms of the digital branch of the programme, the recovery fund will not contribute anything, but the MFF allocation is doubled from the previous long-term budget. The figures are, however, very small when analysed in the context of other comprehensive infrastructure programmes, including China’s Belt and Road initiative, which has plans to enter the EU through Italy.

Digital Europe will invest in key strategic digital capacities such as the EU’s high-performance computing, artificial intelligence and cybersecurity. Despite being reduced from the Commission’s 27 May proposal of €8.2bn, the new figures are still considerably higher than the previous MFF, with the programme receiving €6.76bn.

Digital Tax

Meanwhile, in terms of funding the post-Covid-19 recovery, the European Council has put forward several ‘own resources’ proposals, which include a levy on digital giants – an option very amenable to European Parliamentarians. In the Council conclusions, EU heads of state tasked the Commission with coming up with a  proposal on the Digital Tax in Q1 2021, should there be no international agreement by that date.

However, EU efforts could be stymied by the fact that agreements on tax policy require unanimity in the Council, which thwarted progress last year on the digital tax plans previously presented by the Commission.

Attempts to introduce a bloc-wide digital services tax faltered following opposition led by Ireland, Finland and Sweden to a planned 3% levy on companies earning €750 million in revenue, €50 million of which would need to be EU taxable revenue. For its part, Parliament has long supported the idea of a digital services tax.

French President Emmanuel Macron told French TV that he envisages an EU-wide levy on big tech multinationals, along the lines of a digital tax, which France plans to impose this year.

Macron’s comments, made on 21 July, came after he backed down earlier this year on levying hefty taxes on some of Silicon Valley’s biggest names in January, following US President Donald Trump’s tariff threats.

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Democracy / Media

Democracy Action Plan

In mid-July, the Commission launched public consultations on its ‘Democracy Action Plan, which the executive is due to put forth before the close of 2020. The plans aim to safeguard against external interference and manipulation in elections, media freedom and pluralism and the fight against disinformation. The public consultation closes on 15 September.

As part of the feedback period, the Commission placed a particular focus on areas covering the transparency of political ads online, tackling disinformation, and protecting media freedom, independence and pluralism.

In this context, a July report backed by the Commission found that it is of the ‘utmost importance’ for the EU to do more to rein in the unregulated environment of online political advertising by establishing more stringent transparency obligations.

In addition, announcing a raft of new funding plans to promote media freedom and pluralism in Europe in March, the Commission’s Vice-President for Values and Transparency, Vera Jourova, said that the ‘key objective’ of the European Democracy Action Plan is to “strengthen media freedom and pluralism.”

The precise scope and content of the Action Plan is also dependent on the Digital Service Act proposal.

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Skills

Digital Education Action Plan

In late July, the EU’s Innovation and Research Commissioner Mariya Gabriel said that developing digital competencies across the EU as well as promoting gender equality in the bloc’s digital economy are two key areas that the Commission will seek to foster as part of the forthcoming revamped Digital Education Action Plan.

“The overall objective will be to close the digital skills gap and make digital literacy a reality for all,” Gabriel said on the plans, which are expected to be published late September. A public consultation is open until 4 September.

At the beginning of July, the EU executive laid out ambitious new goals for upskilling and reskilling the bloc by 2025, including the objective of ensuring that 70% of the EU adult population has basic digital skills.

The benchmark is part of the Commission’s revised European Skills Agenda published on Wednesday (7 July), along with the Youth Employment Support Package. The 70% target is a 24% mark-up from 2019 figures.

The announcement followed the recent publication of the Commission’s Digital Economy and Society Index, which found that a large part of the EU population “lacks basic digital skills, even though most jobs require such skills.”

More broadly, there has been no shortage of lawmakers in Brussels highlighting the fact that the economic struggle brought on by the coronavirus only serves to underline the importance of boosting the bloc’s digital skills. Earlier this year, EURACTIV caught up with Victor Negrescu, rapporteur for the Culture Committee’s report on the EU digital education strategy, who said just this. Read the interview here.


For all the latest on EU politics and policy in the field of digital affairs, sign up to our free weekly newsletter, the Digital Brief. 

[Edited by Benjamin Fox and Frédéric Simon]

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