Digital Brief: Big Tech, Big Lobbying, Ireland’s fine, politics-free Facebook

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“The Commission is open to meeting anyone who wishes to speak to us. The Commission does not, and will not control who requests meetings, nor how often. It is also not for the Commission to explain or comment on lobbying strategies of the different companies and interest representatives.”

-A European Commission spokesperson

Story of the week: The European Commission has said it does not and will not control who requests a meeting, nor how often they do and is open to meeting anyone who wishes to. The comments come in response to the publication of a report on lobbying by Big Tech companies in the EU, which found that, in the process of developing proposals for the Digital Services Act and Digital Markets Act, Commission officials met business representatives almost four times more often than civil society organisations. The Commission emphasised its commitment to transparency in response to the report. However, others have voiced concern at the level of money being directed into lobbying by Big Tech giants, which a total budget of almost €100 million every year have overtaken all other sectors. The report also points to an extensive network of trade associations, think tanks and economic institutions that would advance more or less openly the interests of the digital giants in Brussels. The revolving doors between tech companies, EU institutions and political parties are also mentioned as a cause of concern for the integrity of the policymaking process. Read more.

 

Don’t miss: The Irish data protection commissioner (DPC) has issued on Thursday a record €225 million fine to WhatsApp over its (lack of) transparency when it comes to sharing data with parent company Facebook. In addition to the fine, which WhatsApp described as “entirely disproportionate”, the DPC imposed a reprimand order requiring the company to rectify the violations. The DPC is the leading authority on the case, but its initial opinion was contested by its peers on the nature of the data concerned and the amount of the proposed fine, considered too low. The case was then referred to the European Data Protection Board (EDPB), which in a 90 pages document detailed the shortcomings of the DPC’s draft opinion, and obliged the Ireland’s watchdog to issue a (higher) fine within the next month. The case is illustrative of the pressure mounting around the Irish authority, which, since the country hosts most Big Tech companies, has the lead on many key cross-border cases. Several privacy watchdogs have attacked the DPC for having a timid approach in enforcing GDPR, and the WhatsApp case shows that they are finally getting their way. The growing weight of other watchdogs was also becoming more evident following the ruling of the Court of Justice of the European Union that recognised non-leading authorities could initiate a cross-border case under certain conditions. Read more.

 

Also this week: 

  • Facebook is reportedly expanding the testing of reducing the visibility of political content to Ireland, Spain and Sweden.
  • The app market saga continues, with the first stringent regulation in South Korea, Apple’s concessions in Japan and ongoing disputes from app developers.
  • France and the Netherlands join forces on quantum computer technologies.
  • VP Jourová visited Poland and promised action against the government’s attempt to ‘monopolise’ the media sector.

 

Platforms

Anti-politics policy. Facebook is set to extend tests in which political content is made less visible on its News Feed to Ireland, Spain and Sweden. The platform trialled a reduction in political content in the US, Canada, Brazil and Indonesia earlier this year and says it received positive feedback. The new policy means users will have to join a political group in order to view its content, a step designed to reduce the creation of echo chambers and avoid people being led down rabbit holes of extremist content. The move has received mixed reactions because while giving users more choice on what they see has been applauded as an improvement, others have cautioned that it could have grave implications for news media outlets and free political discussion. The way the platform defines ‘political’ also remains unclear. Read more.

App market saga. South Korea is the first country in the world to challenge Google’s and Apple’s duopoly on the app store market. The parliament of the Asian country approved on Tuesday a bill that prevents app store operators from limiting the payment systems to their own. The current system imposes on app developers fees that can reach up to 30%. In Japan, Apple had to make concessions in its app payment rules for ‘reader’ apps like Netflix and Spotify in order to conclude an antitrust probe. Apple tried to anticipate regulators by making some concessions, but Epic Games and Spotify, which both have ongoing charges against the iPhone-maker, criticised them as ‘a method to distract regulators’. The struggle between app store operators and app developers is set to continue, and it’s a fight in which Google and Apple are working together.

Google invests in Germany. Google has announced an investment of around €1 billion for the expansion of its German cloud data centres. The energy-intensive data infrastructure will be combined with investments in renewable energy facilities. The package is the largest the US company has compiled in the country in more than two decades and has followed similar investment plans from Apple and Microsoft announced earlier this year. The move has been presented as an additional step to consolidating Germany’s digitalisation. Read more.

D.O.B? Instagram has introduced a new safety feature requiring users to provide their date of birth if they want to continue using the platform. Users who created their accounts before 2019 haven’t been required to provide this information up to now, and repeated refusals to do so will result in users being unable to use the app. The move is the latest in a series of efforts by Instagram to introduce age-based safety measures and adds to a wider discussion by platforms about how to verify the age of their users and protect children from potential online abuse. Read more.

Content censored. A messaging platform owned by Tencent has been blocking search terms such as “gay” and “LGBTQ”. QQ, the platform, is used by more than half a billion people in China and returns a message warning against “harmful information”, the same one it displays when pornographic material is searched for when the terms are entered into the platform. The practice has likely been ongoing for many months.

Double standards. Apple has made privacy one of the core values of its brand, but that does not seem to be the case for its employees. From onboarding to exit, the personal and professional accounts and data of the company’s workers are blurred, meaning that Apple has access to troves of potentially sensitive and private information, in addition to that which it collects through practices such as encouraging employees to test new and invasive software.

Tech turns on itself. Employees at big tech firms are echoing concerns raised by wider society and calling out their own employers, often on the tools they’ve helped to build. A number of major companies, including Facebook, Google and Microsoft, have faced pushback from their workers recently, over issues such as contracts with the military and immigration agencies, sexual harassment and political advertising policies. This isn’t the case everywhere, however. Apple and Amazon have a stricter approach when it comes to employees voicing their dissatisfaction, although there are increasingly more cracks in the wall of silence.

TikTok under fire. Privacy rights groups have taken TikTok to court over alleged violations of children’s rights. Take Back Your Privacy Foundation and Consumentenbon are suing the platform over what they say are breaches in the privacy and consumer rights of Dutch children. After discussions failed to lead to a settlement, the two groups are calling on TikTok to cease its actions, delete illegally collected personal data and pay damages to those harmed.

ByteDance diversifies. TikTok’s owner ByteDance has acquired the start-up Pico, the third-largest maker of VR headsets. The acquisition marks another step towards diversifying business for ByteDance, which also acquired a mobile gaming studio in recent months. The move, the company said, “will support both our entry to the VR space and long-term investment in this emerging field.”

Amazon expands. Amazon will hire 55,000 people to corporate and tech roles around the world, its CEO has announced, a massive expansion equal to large shares of other tech giants’ current workforce. The recruitment comes at a time when Amazon is under scrutiny for its treatment of its workers, especially under the harsh pandemic conditions.

Industrial Strategy

France and the Netherlands unite. France and the Netherlands signed a memorandum of understanding on quantum technology on Tuesday aiming to intensify research synergies with the overarching competitive aim of developing supercomputers. The agreement will see greater collaboration in research and with tech companies and investments in the still-emerging field of quantum computer technology. Read more.

Germany lags behind. A recently published paper has warned that Germany risks falling behind in the digitalisation of its economy, a process referred to as Industrie 4.0, which could have a serious impact on growth and employment. With elections fast approaching, the German association of small and medium-sized businesses has urged the next government to take further steps to ensure that SMEs can better cope with the challenges presented by Industrie 4.0 and to ensure better frameworks for financial support and relief. According to a survey by Bitkom, the organisation that authored the report, two-thirds of German companies consider themselves to either be lagging behind or to have already been left behind. Read more.

Semiconductor success in doubt. The US is struggling to keep up with China when it comes to semiconductor production. Apple fell to third place in the second quarter of 2021 in terms of the top five smartphone vendors, behind Chinese company Xiaomi for the first time, perhaps indicating that American aspirations when it comes to increasing semiconductor production in the US are falling behind.

Unicorns proliferate. A record 19 new fintech companies have joined the list of Europe’s unicorns since the start of the year, demonstrating the continent’s innovation in a number of sectors. In total there are now 125 private company unicorns with their headquarters in Europe and 2021 also saw the addition of two new decacorn startups, companies valued at $10 billion or more, bringing that total to three.

Media

Jourová visits Warsaw. Amid increasing tensions over the rule of law and media freedom, European Commissioner for values and transparency Věra Jourová visited Poland this week. Concern is growing in the EU over controversial judicial and media reforms in the country, particularly in the wake of the recent bill restricting the issuing of broadcasting licenses to foreign-owned media, widely seen as an attempt to curtail the freedom of critical news outlets. Jourová said the Commission is keeping an eye on the case and won’t hesitate to make its voice heard should the license of TVN24, a US-owned broadcaster, be revoked. On the judicial side, the European Court of Justice ruled earlier this month that Poland’s planned reform of the judiciary was incompatible with EU law, forcing its abandonment but heightening tensions between Warsaw and Brussels. Read more.

Disinformation disagreement. More than 50 civil society organisations and disinformation experts have signed an open letter urging EU policymakers to revisit the proposed Digital Services Act (DSA) and include stronger measures for tackling disinformation. The signatories, including EUDisinfo Lab, Reporters Without Borders and The Daphne Caruana Galizia Foundation, notably urge more strident steps when it comes to accountability and democratic oversight. Among their proposals are measures such as the establishment of a European Oversight Board made up of civil society experts which would oversee the implementation of the DSA.

Trust falls. The percentage of US Republicans with at least some trust in national news organizations has halved in the past five years, according to research by Pew. In 2016, 70% of Republicans and Republican-leaning independents said they had “a lot” or “some” trust in the information provided by national news organisations, but the figure dropped to 35% this year. This is in stark contrast to the 78% of Democrats and Democratic-leaning independents who say the same. This partisan divide is at its largest point since 2016, and the research shows that Americans generally have greater faith in local news outlets.

Audio-visual emphasis. A new “European approach for the European Media Industry” has been presented by Thierry Breton, Commissioner for the internal market. Based on pillars of regulation, funding and technological transformation and focusing on the audio-visual sector, the plan urges those working in the field to capitalise on the diversity of languages and cultures on offer in Europe. Later this year, it also notes, Media Invest, a platform dedicated to spurring private investment in audiovisual production and distribution will be launched.

Artificial Intelligence

AI at the borders. The use of AI technology at the EU’s internal and external borders is widespread and growing, and poses a very real threat to people on the move. Not only is AI-powered tech being used to pre-empt people’s arrival at borders, and often to push them back, but controversial systems such as lie and emotion detectors are being built into border processes. The collection of biometric data is also on the rise, leading to major concerns over data protection and the ethical implications of what this kind of material could be used for in the future. Read more.

Copyright

Google fights back. Google will appeal a €500 million fine it received from France’s antitrust authority in July for its failure to comply with the watchdog’s orders on negotiations with publishers over neighbouring rights. Time is running short for Google, which faces additional penalties of up to €900,000 a day if it fails to comply with the terms of ruling within two months. The appeal will not hold up the original fine, the antitrust regulator said on Wednesday, meaning Google must still cough up the sum.

5G/Telecom

Zero tariff ruling. The European Court of Justice ruled on Thursday that the zero tariff offers from Vodafone and Deutsche Telekom in Germany were breaching the Open Internet and Roaming regulations. The deals offered unlimited data for streaming at the cost of a slower internet connection abroad. Zero tariffs remain possible, but not at the cost of negatively impacting the consumer on a right provided under EU law. Read more.

5G experts converge. The inaugural World 5G Convention opened this week in Beijing, bringing together industry experts and entrepreneurs from around the world. The convention focused on the joint building of digital infrastructures, promoting cooperation in industry and internationally and facilitating collaboration. The convention is a world-first for the field, though a national version was hosted in Beijing in 2019.

Security suspension. Nokia has suspended its technical work with the O-RAN Alliance after the latter was flagged as a security concern. China Mobile is listed as a founder of O-RAN and there are dozens of Chinese companies among the Alliance’s members, three of which are on a US trade sanctions list. The US government has called for a boycott of these entities as it believes they are using US technology they’ve acquired to aid China’s military. Nokia says the suspension is temporary, but experts predict that more companies will show caution in working with O-RAN Alliance and similar entities.

Standing alone. The German telecom company, Deutsche Telekom, has announced a shift to a 5G standalone core, saying it currently has 55,000 5G antennas transmitting service to 85% of Germany’s population. The company currently operates standalone 5G in four cities and says that some development is still needed before the switchover is complete, though it says it remains on track to push coverage to over 90% of the population by the end of 2021.

Data & privacy

Tech on ICE. Three tech giants have indicated their interest in working on a system currently under development by ICE, the US Immigration and Customs Enforcement agency, which would use social media information, surveillance footage and biometric data to target people not authorized to work in the US. Amazon, Google and Microsoft all attended an industry day run by ICE, which is set to award contracts for its construction and maintenance by the end of the month. Workers at the three companies have spoken out against their employers’ contracts with ICE and US Customs and Border Protection before. The giants have a history of working and contracting with companies tied to ICE, and the intrusiveness of the new technology being developed could prove similarly controversial.

Russian data law breached. Moscow has issued record fines to Facebook, Twitter and WhatsApp over violations of Russia’s personal data storage legislation. Repeat offenders Facebook and Twitter received bills of 15 and 17 million rubles respectively, while WhatsApp faces one of 4 million for its first offence. The fines are the latest in a series handed out to Western digital companies. Apple, Google and Booking.com have also all been on the receiving end in recent months.

Lawsuits prove no obstacle. Clearview AI has closed a $30m Series B funding round, though the investors on the other side of the deal remain anonymous. Clearview, a company that scraped billions of photos from the internet to build a facial recognition tool now used by a number of law enforcement agencies, is currently under investigation for potential privacy violations in both the UK and Australia and is facing legal complaints from digital rights groups in France, Austria, Greece, Italy and the UK for alleged violations of privacy laws.

Data protection passes. A vote in Brazil’s Chamber of Deputies has taken the country one step further to making the protection of personal data a fundamental right. An amendment to the country’s Constitution, originally proposed in the Senate, passed 436-4 in the Chamber of Deputies on Tuesday. The proposal will make the government responsible for organising and supervising the protection and processing of personal data, but a provision for creating an independent regulatory body on data protection was removed.

Cybersecurity

Cybersecurity matters. Improving cybersecurity in operational technology (OT) systems over the next year and a half is one of the key concerns of facility managers, according to a survey by Honeywell. 71% of respondents considered OT cybersecurity a worry, but only 44% said they currently had a solution in place to protect their systems from threats. Cyberattacks are on the rise and a number of recent high-profile assaults have caused widespread disruption, demonstrating the urgent nature of the threat.

Hacks hit Australia. Following rising tensions in relations between China and Australia, months of hacks hit prominent targets in the latter country, including the parliamentary email network and departments of defence and health. Beijing has denied involvement but cybersecurity experts say they’ve traced much of the activity to China-based groups, often described as state-sponsored hackers.

 

On our radar

  • The Slovenian Presidency is due to present an updated text for the DSA and DMA in the working parties.
  • News Media Europe is organising an event next Wednesday to discuss how the DMA could rebalance the power relation between online platforms and news publishers (the panel discussion is moderated by one of the authors of this newsletter).

 

What else we are reading this week:

International outcry followed the Egyptian government’s 2011 shutdown of the internet, but similar events are on the rise, globally. (Jigsaw)

Axel Springer’s acquisition of Politico will give the German publisher a platform to campaign against Big Tech in the United States. (FT)

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