Digital Brief: DMA & DSA compromise texts, roaming adoption, Europol nears recast mandate

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“The European Council reviewed progress on the digital agenda and key legislative files. It encourages the co-legislators to […] continue work on the Digital Services Act and Digital Markets Act proposals with a view to reaching an ambitious agreement as soon as possible.”

-Draft conclusions of the European Council meeting, 21-22 October

 

Story of the week: The Slovenian Presidency circulated draft versions of the DMA and DSA, seen by EURACTIV. If the deadline of the Competitiveness Council in November is to be met, these are likely to be very close to the final versions. The key takeaways are the following.

In the DMA, what is perhaps more remarkable is what did not change. The bid from France, Germany and the Netherlands to get national competition authorities involved in the enforcement was unsuccessful. “The Commission is the sole authority empowered to enforce this Regulation,” the new draft reads. Provisions on killer acquisitions, strongly demanded by Germany, were also not included. Furthermore, the definitions of core platform services are roughly the same ones EURACTIV reported two weeks ago.

Compared to the initial text, there was no movement of provisions under Art. 5, on mandatory obligations for the gatekeeper, and Art. 6, on additional obligations that the Commission might decide to impose. That contrasts with the Parliament’s draft report, which has seen many additional obligations becoming mandatory.

Regarding the regulatory dialogue (Art. 7), some member states raised concerns that the gatekeepers should be allowed to ask for clarification. In the new text, the Commission has retained its discretion in deciding whether or not to engage in regulatory dialogue. However, in doing so, the EU executive will have to respect “equal treatment, proportionality and the principle of good administration.”

In the second draft, a significant change was the threshold for requesting the European Commission to start a market investigation (Art. 33) on the matter of systematic non-compliance (Art. 16). Only one country will be able to request a probe if it deems a gatekeeper is systematically infringing DMA obligations. Several countries asked to lower the initial threshold of at least three member states, change the gatekeeper designation (Art. 15) and the matter of investigations on new services and practices (Art. 17). In the new text, however, the requests were not addressed.

In the DSA, the presidency continued with its approach to publishing chapter by chapter rather than the entire document. The new draft concerns chapters 1 and 2, which only need some minor clarifications according to an EU diplomatic source before they can be considered final.

Online search engines have been included alongside ‘caching’ services (Art. 4). A second EU diplomatic source defined the approach as “very perplexing”, noting that the way search engines have been included in the proposal seems to add a fourth category of intermediary services on top of the three introduced in the e-Commerce Directive: caching, hosting and mere conduit. The inclusion of search engines comes upon the initiative of the French, but the second source expressed doubts on the way it was formulated in the compromise text.

The change likely to spur more controversy concerns a new recital that would allow national judicial or administrative authorities to restore legal content taken down from an online platform. While recitals do not have the same legal standing as articles, the proposal, which came from Poland and Hungary, raised some eyebrows as it could see content reinstated for political reasons.

Under the definitions of online services (Art. 2), online marketplaces have been defined as “online platform which allows consumers to conclude distance contracts with traders.” Therefore, that only covers Business-to-Customer platforms. A third diplomatic source told EURACTIV that some member states want to expand it also to include Customer-to-Customer platforms.

Provisions regarding order to act against illegal content (Art. 8) and order to provide information (Art. 9) have also been modified to better keep in consideration the national legislation.

 

Don’t miss: Commission Executive Vice-President Margrethe Vestager called for transatlantic collaboration on addressing the impact of emerging technologies on democratic institutions, saying that the EU and US concerns are the same. A key aim of the recent Trade and Technology Council, Vestager said this week was to “show that democracy can deliver.” While there may be significant areas of convergence between the two sides, sticking points remain. Key among them is the EU’s push for digital regulation, including the DMA, set to impact the largest tech companies, all of which are currently American. Vestager told EURACTIV that the US administration did not raise the point directly in Pittsburgh but also stressed that the concerned companies should directly bring their concern to Brussels to avoid a game of ‘Chinese whispers’. Asked about the Nvidia-Arm case (more on that below), Vestager noted that “we don’t have a say about US legislation. That is mirrored by the US not having a say in European legislation.” Read more.

 

Also this week:

  • Europol nears a stronger mandate for developing data-driven policing tools.
  • The Irish Data Protection Commissioner agreed with Facebook’s legal basis for processing personal data outside of GDPR requirements.
  • European Parliament adopted the extension of the Roaming Regulation with lower wholesale price caps.
  • The head of the French competition authority left the office after she was not reappointed.

 

Before we start: Data protection is at a critical stage in Europe, with decisions of privacy watchdogs picking up the pace and the beginning of judicial review at both the national and the EU level. We have asked European Data Protection Supervisor Wojciech Wiewiorowski about the recent proposal to organise a conference to review the enforcement of GDPR. He also provided his views on the current criticism around GDPR’s one-stop-shop, the Privacy Shield negotiations, the debate around encryption and the e-Privacy negotiations. Listen to the podcast for more.

EDPS on the future of privacy

We have asked the European Data Protection Supervisor Wojciech Wiewiorowski about its recent proposal to organise a conference to review the enforcement of GDPR, the EU privacy law.

 

Artificial Intelligence

AI in the judiciary. During a ministerial forum on the digital judiciary, Slovenia’s justice minister Mijan Dikaučič issued a warning over the use of technology such as AI in the judiciary. Dikaučič insisted the application of the emerging technology should not jeopardise the independence of judges. He also raised concerns on the need to create safeguards that will ensure the respect of fundamental rights, echoing a motion recently approved in the European Parliament.

Room to innovate. The European Digital SME Alliance has cautioned that the EU’s proposed AI Act could stifle innovation by EU SMEs and hand too much authority to bodies in which SMEs are not adequately represented. In a position paper on the proposal, the group says it welcomes a more harmonised approach to AI regulation in the EU, plans for which were presented earlier this year, but that adjustments are needed. These include starting with narrowing the regulation’s definition of what counts as AI.

Competition

Change of guard. The president of France’s competition authority will not be reappointed to her post, despite hoping to continue. During her time in office, Isabelle de Silva handed a record €500 million penalty to Google over its failure to negotiate in good faith with press publishers. She told BFM Business that she had been confident about the renewal of her appointment and was surprised at its abandonment. The watchdog is due to take a position on the merger of channels TF1 and MG, a move supported by the government but described by De Silva as a “difficult issue” and one of the reasons she had been hoping to stay on. Read more.

Cybersecurity

No interference, for now. Hacking carried out by a Russian-linked group in the lead-up to the German elections was not used to spread disinformation but leaves open the possibility of future harm, officials have warned. The main targets of the attacks were Bundestag MPs. Although there is no evidence of major amounts of data having been obtained, in part thanks to forewarning and training by German intelligence services, the reconstitution of the body now creates a potential point of weakness. Read more.

Data & privacy

Europol’s sense for data. Europol is on the verge of obtaining broader powers after the LIBE committee adopted its recast mandate. Europol has become an information hub, crunching large datasets to support law enforcement. Last year, the European Data Protection Supervisor (EDPS) admonished the agency for collecting people’s data without any link to criminal activities. Critics of the new mandate argue that it legalises this exact behaviour and grants Europol extensive powers in areas such as AI and data processing, stressing that the safeguards and scrutiny should match the agency’s level of power. Read more.

Greenlight for FB. Data activist Max Schrems has criticised a draft decision by Ireland’s Data Protection Commissioner (DPC) endorsing Facebook’s legal basis for processing personal data, which critics have branded as unduly creating a loophole in GDPR requirements. The DPC ruled that the platform can continue approaching data protection agreements as contracts rather than consent. This means other companies could adopt similar approaches to be able to use personal data without consent. Other EU privacy authorities are expected to object to the draft decision. Read more.

Appeal launched. Amazon decided to appeal against the record Є746 million fine handed to it by the EU in July. The penalty came after Luxembourg’s data protection regulator found that the company had violated GDPR in the way it was processing users’ personal data. Amazon is also currently facing antitrust scrutiny on several other counts in the EU.

Guidelines for journalists. The UK’s Information Commission has released for consultation its draft journalism code of practice. The code is intended to assist media organisations and journalists in compliance with data protection laws. The consultation will collect input from media and civil society members to shape the code’s final version. The ICO says it aims to strike a balance between journalism, freedom of expression, and data protection.

Digital skills

Cooperation needed. Experts have said that increasing the speed and cohesion of the rollout of digital skills and infrastructure is necessary to achieve the 2030 targets set by the Commission. An analysis earlier this year warned that national plans risk falling short, and Commission officials, policymakers and researchers stressed this week that a holistic approach to boosting digital capacity was needed as soon as possible. Read more.

Disinformation

Ask the experts. The Commission has launched an expert group on disinformation and digital literacy as part of its Digital Education Action Plan. The group, made up of 25 individuals, NGOs, international and EU organisations and research institutions, will work to develop standardised guidelines for teachers in the EU when it comes to training young people in digital competencies and spotting false information online. Read more.

Political ad agreement. The Commission is set to announce its new rules on political advertisements on 23 November. The proposals are intended to promote transparency, guard against covert political ads, prevent the misuse of social media, and use microtargeting for manipulation. However, despite calls from some MEPs for an outright ban on microtargeting and evidence of public support for stricter regulation of its use by political groups, the Commission has stopped short of prohibiting it entirely.

DMA

No deadline, ASAP. A majority of EU member states have opposed setting an exact deadline for the agreement of the DSA and DMA. The reference to Spring 2022 was present in the first draft of the conclusions of the European Council meeting planned for later this month. But in the second draft circulated at the beginning of this week and seen by EURACTIV, the date is nowhere to be seen. The deadline came from France, which will take over the Council’s rotating presidency at the beginning of next year. Paris wants to reach a final agreement on the two legislations by March 2022. Most other countries do not share this concern and have succeeded in changing the deadline into a vaguer “as soon as possible.” Read more.

No agreement in sight. Delays might not come from the Council, as the Parliament seems farther away from reaching an agreement at this stage. Rapporteur Andreas Schwab recognised that significant differences persist around enforcement issues, combining flexibility with legal certainty and the specifics of rules on interoperability and targeted ads. According to his colleague Rasmus Andresen, however, “there is no chance” of reaching an agreement by 8 November, the date on which the DMA and DSA are currently planned to be adopted in IMCO. In a sign of the potential duration of the incoming delay, MEP Stépahnie Yon-Courtin said she hoped the DMA would be enacted by the end of France’s Council presidency next June.

DSA

Break the deadlocks. Slovenia, the current holder of the Council presidency, has been pitching an enforcement structure that would grant the Commission greater powers of intervention for the DSA package. The proposal, which arose following tensions over the country of origin principle, would see greater powers afforded to the Commission, allowing it to intervene against very large platforms after requests from national authorities or if the DSA is misinterpreted. Read more.

e-Commerce

Fakes and false findings. Amazon documents obtained by Reuters detail how the company has systematically created and sold knockoff versions of products and manipulated search results to promote its own merchandise in India. The documents show how, in a country representing one of Amazon’s largest growth markets, the company used internal data to copy products being sold by other companies and rigged search results to ensure that customers would encounter Amazon’s own content before that of other sellers.

Industrial strategy

Antitrust probe confirmed. Reuters anticipated that US tech firm Nvidia would be facing an EU antitrust investigation into its bid to buy British chip designer ARM, just months after UK competition authorities issued a warning over the acquisition. Nvidia reportedly offered concessions to the EU last week, but they failed to resolve concerns. The Commission will conclude its preliminary review later this month and investigate the $54 bn deal.

The Netherlands chips in. The Netherlands continue their push to influence upcoming EU initiatives. When it comes to the Chips Act, the EU must increase funding for start-ups and scale-ups, promote cross-border collaboration and acknowledge that the decoupling of the global semiconductor value chain is an “illusion”, The Hague said in its preliminary input on the legislation. The country supports the Act, it said, and emphasised the importance of transatlantic cooperation on the issue, but outlined several recommendations for its strengthening, stressing, in particular, the need for international cooperation.

Media

RSF vs Bolloré. Reporters Without Borders (RSF) has criticised billionaire Vincent Bolloré for “repeated attacks on press freedom and editorial independence”, describing them as an “unprecedented threat to democracy.” In a 15-minute documentary, RSF accuses Bolloré of instigating legal proceedings intended to silence an investigation they had launched into the businessman’s dealings. Along with the video, the first of its kind produced by the media NGO, RSF has published a set of recommendations for different government bodies to ensure media protections.

Pegasus Project recognition. The Pegasus Project, which earlier this year revealed the government use of NSO spyware to target journalists, officials and activists, has been awarded the Daphne Caruana Galizia journalism prize by the Parliament, just days before the fourth anniversary of her death. The prize seeks to recognise the important role of journalists in democracy and encourage investigative reporting in Europe. Read more.

“False News” laws. The Greek government has been urged by monitoring group Media Freedom Rapid Response to withdraw proposals that would see the introduction of fines and jail sentences for journalists charged with publishing “false news”, over concerns that the law would undermine freedom of the press. The situation echoes that of Albania, where a previously proposed and heavily criticised law that would have seen hefty penalties for acts including the publication of “fake news” has once again made its way onto the Parliament’s agenda, despite having been vetoed by the President in 2020. Read more.

Repeal not required. Also in Albania, however, the abandonment of a planned controversial law that would see all online media brought under state supervision will not be required by the European Commission in order for EU accession negotiations to commence. National and international media organisations have recently asked the Commission to step in and prevent the passage of the act. The Commission, however, said that while media freedom was a key component of accession criteria, amending the law would not be made a condition for the opening of accession talks. Read more.

Platforms

App store issues roll on. Apple continues to resist alternative app shops and sideloading, as pressure increases over the company’s alleged anti-competitive practices. The tech giant has reiterated its opposition to allowing apps downloaded directly from the internet to be installed on its devices, citing security concerns. This argument has made regular appearances recently, as authorities have turned their attention to allegations of potentially anti-competitive behaviour by the tech giant when it comes to its app store policies. Read more.

Linkexit. Microsoft will pull LinkedIn out of the Chinese market, citing an increasingly challenging operating environment in the country and a lack of success in some parts of the platform as the reasons behind its decision. The platform will be stripped back to provide only job adverts, without its social media and sharing components. Attention had been on LinkedIn to see how a Western social media platform would navigate China’s tightly controlled internet realm. Microsoft’s decision means the last major US social network left in China has now shut its doors.

Whistle-blower welcomed. Facebook whistle-blower Frances Haugen will testify in front of the UK parliament on 25 October. The European Parliament also invited her to testify on 8 November. Haugen, who came forward last week with revelations on Facebook’s conduct, has said the platform repeatedly prioritised profit over the welfare of users. She has also agreed to brief the platform’s Oversight Board, the group that reviews the platform’s approach to key content moderation issues.

Facebook blacklist. A 2012 Facebook policy banning organisations with a record of terrorism or violent criminal activity has grown into a wide-reaching set of restrictions on what the platform’s users are able to say about a lengthy list of entities. The Dangerous Individuals and Organisations policy charts a list of entities deemed unacceptable and is regularly used by the company to defend its approach to content moderation. A number of critics, however, have raised concerns over the list’s lack of accountability and transparency and have said it disproportionately targets certain communities. The first step to addressing the issue, they say, would be the publication of the list.

Team Slack or Team Teams? EU antitrust authorities are looking into a complaint by Slack that Microsoft’s Teams software violates European competition law, when bundled with its Office package. Slack’s allegations have raised questions for the EU over whether bundled products increase companies’ data access and create barriers to marketplace entry in a way that prevents rivals from competing. The Commission has issued a questionnaire focusing on Microsoft’s practices to the company’s rivals, signalling an investigation could be incoming.

Involuntary public figures. Facebook will classify journalists and activists as “involuntary” public figures, a designation that will afford them additional protections against online harassment and bullying.

Telecom

Roaming nears extension. The European Parliament adopted its position on the new Roaming Regulation, which would otherwise expire next June. MEPs have added provisions to align intra-EU calls with national calls and quality of service requirements to avoid that providers downgrade internet speed when a user goes abroad. Furthermore, the operators will have to inform the users if their device automatically connects to a non-EU network, which can occur when near the EU border. However, the roaming extension might have far-reaching implications for the cost data across the EU until 2032, reducing competition and hampering the uptake of the Internet of Things. Read more.

 

What else we’re reading this week:

Much ‘Artificial Intelligence’ Is Still People Behind a Screen (Bloomberg)

Google bets on cloud breaking up (FT)

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