Digital Brief powered by Facebook: DMA & DSA adopted, biometric ban, political ads

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“France’s priority [during the EU presidency] will be to defend the Council’s priorities and to ensure that we are able to enter into trilogue with the other stakeholders as soon as possible.”

-Cédric O, Secretary of State for the Digital Sector of France

Story of the week: In the Competitiveness Council on Thursday, EU ministers unanimously adopted the mandate to start interinstitutional negotiations on the DMA and DSA. As the Executive Vice-President of the European Commission, Margrethe Vestager, said, what would be truly historical is if these regulations were to complete the legislative cycle before the end of the European Parliament’s mandate in 2024.

Yes, but for those familiar with how the EU Council operates, unanimity does not necessarily mean everyone is satisfied. Approving such complex legislation in just 11 months necessarily means something is left out and that there was little time to build a solid consensus. As a result, under the surface of public backscratching, EU countries are divided among those that want to ‘defend’ the compromise as it is and those seeking ‘improvements’.

The first sign of that was the statement issued by Denmark, Italy, Portugal, and Spain on Monday, calling for the extension of fair access obligations to social media and search engines. The proposal would essentially force these platforms to retake editorial content, which together with the Copyright Directive would create a powerful combination for the media sector to circulate content online and monetise from it (more on this below).

The ‘revisionist’ club was joined by Austria, Belgium, Germany, and the Netherlands. Berlin’s shopping list was particularly extensive: on the DMA – more involvement of national authorities, change of active end-user definition for online marketplaces, killer acquisitions, measures on default settings and in-app payment systems; on the DSA – stronger protection of minors, requirements to notify law enforcement, preservation of illegal content for legal proceedings, due diligence for online marketplaces.

Interestingly enough, most of these requests are already included in the EU Parliament’s report, hence the objective seems to be to steer the future negotiations in that direction. Diplomats note that, while the Germans made these points before, they never really insisted too much on them. “It’s a shopping list from all of their ministries,” an EU diplomat told EURACTIV, noting how that reasoning might be domestic rather than European.

The question now is whether these requests will become stronger with the new coalition government, but in any case, Germany has MEPs in strategic places to influence the future negotiations also on the other side of the fence.

All eyes are on France now, as in yesterday’s meeting Cédric O was already playing the role of the honest broker hearing everyone’s concerns. The room of manoeuvre is particularly tight for the DSA, as several countries of the ‘single market’ club stressed the need to avoid overburdening SMEs by removing the liability exemptions. Read more.

 

Don’t miss: The DMA was also adopted in the Parliament’s IMCO committee after a compromise that secured overwhelming support from the main political groups. The final compromise is a scope only slightly adjusted, an extension of self-preferencing provisions, interoperability for social media and messaging services, a ban on targeted advertising for minors, harsher fees and measures for systemic non-compliance including a temporary ban on killer acquisitions.

Three last-minute ECON amendments were approved, in spite of Andreas Schwab’s own EPP voting against it. The changes relate to Article 12 and oblige gatekeepers to inform the Commission about any acquisition, not only for takeovers of digital companies. The final result does not change much, but the objective was rather to send a message to the tech giants: we have got our eyes on you. Message delivered. Read more.

 

Also this week:

  • The coalition agreement of the new German government includes a ban on biometric recognition in public spaces.
  • The European Commission presented a proposal to regulate political ads.
  • The DSA parliamentary report is progressing on key issues, but the December IMCO vote is likely to be postponed again.
  • France has delisted e-commerce giant Wish for failing to comply with product safety standards.

 

Before we start: In its new coalition agreement, the next German government put a special emphasis on digitalisation. To shed some light on what Germany has in store for digitalisation, we spoke with Oliver Süme, chair of the board at eco, one of Germany’s biggest digital associations. The discussion focuses on the main challenges that the next government has to face and if the measures that are outlined in the coalition agreement are enough to bring Germany back on track to master the digital transformation.

What the next German government has in store for digitalisation

The main challenges that the next government has to face and if the measures that are outlined in the coalition agreement are enough to bring Germany back on track to master the digital transformation. 

 

Research is happening with Facebook.

Facebook’s Data For Good programme can help EU academics understand how friendship ties and mobility patterns affect the spread of COVID-19, so policymakers in the EU can make better decisions about resource allocations. This data also helps researchers tackle issues ranging from climate change to disease prevention. Find out more.

Artificial Intelligence

Biometric ban. Germany’s new coalition agreement commits to a ban on biometric recognition in public spaces and limiting the use of mass surveillance to a minimum, in a break from the position of the previous government. With the EU’s AI Act currently underway, the three coalition partners will also push for a ban on facial recognition at the European level. “The right to anonymity, in both public space and on the internet, must be guaranteed”, reads the agreement. Read more.

Competition

200M bill. Amazon and Apple have been sanctioned by the Italian competition authority for instituting an agreement in 2018 that prevented legitimate resellers of Apple and Beats products from operating on Italy’s Amazon marketplace. An investigation found that the agreement constituted a violation of the Treaty on the Functioning of the EU as it targeted certain individuals on a geographic basis and in a discriminatory way. The authority has slapped a €68.7 million fine on Amazon and a €134.5 million on Apple as a result.

Still in Italy. Google and Apple have been fined €10 million, the maximum penalty in this case, by Italy’s competition authority for their “aggressive practices” linked to the commercial use of user data. Users are given little or no choice when it comes to the terms and conditions of their data’s use, the authority said, and neither company provided adequate information on how they collect and make use of users’ data. The decision illustrates the growing awareness among competition authorities to consider the use of data in their antitrust probes.

Speaking of. Google has announced updates to its Privacy Sandbox commitments in a number of areas. Among them are proposals to install an independent Monitoring Trustee to oversee the commitments and more expansive testing commitments. The updates will likely set off another probe by UK competition authorities (CMA) into the plans which, if approved, Google says it will implement globally. The commitments were originally announced in June this year after the CMA initiated an investigation into the Privacy Sandbox.

Cybersecurity

Fighting cybercrime. The European Commission sent to the EU Council on Thursday a request to authorise the ratification by EU countries of the Second Additional Protocol to the Council of Europe Budapest Convention on Cybercrime. The protocol is meant to provide a legal basis in international law to improve collaboration between authorities and private entities, notably in terms of access to electronic evidence related to cybercrimes. The Commission, which represented the EU in the negotiations, considers it managed to introduce strong safeguards to protect the privacy and fundamental rights, which will now provide the standard for law enforcement cooperation globally. By contrast, several civil society organisations have criticised the protocol, which in their view could allow serious violations of human rights without adequate oversight.

Data & privacy

Double-edged sword. While the news was breaking earlier this year that spyware from NSO Group had been used to target French President Emmanuel Macron, France was in the process of purchasing those very same hacking tools from the company. The deal reportedly fell apart after the Pegasus Project investigation revealed that French government officials were among the tech’s victims, though France denies it even had plans to buy the tools. Read more.

Privacy designs. Digital advertising must apply for a data protection by design approach, the UK’s Information Commissioner’s Office and Competition and Markets Authority have said in a new opinion. Companies such as Google must demonstrate how their initiatives meet the Opinion’s expectations and incorporate data protection requirements from day one, the two bodies added.

Digital Markets Act

Gatekeeper polls. Now that the two versions of the DMA have been confirmed, the next question is which companies will be designated as gatekeepers. The European Commission estimates between 10 and 15 companies, but has always refused to specify which ones, on the ground that it is up to the companies to inform the EU executive. Beyond GAFAM, Alibaba and Booking are also very likely to fall under the scope, while other companies such as Zalando might follow in just a few years.

Digital Services Act

You’re on your own now. The DSA report in the European Parliament is now the last moving part to get the two sister proposals to the trilogue stage. In the last shadow meeting on Tuesday, the rapporteur Christel Schaldemose has neared an agreement with the EPP and Renew on key aspects of the proposal, notably targeted ads, recommender systems and marketplace liability. While the agreement seems to be getting closer, after weeks of impasse, virtually none believes that the vote scheduled for the 9 December vote is unrealistic, given the number of outstanding issues that still need to be ironed out. Read more.

Media exemption is dead. Is it? A controversial provision that would see the DSA’s content moderation rules not applied to material produced by media outlets was rejected after all major political groups objected to its inclusion. The proposal was pushed by Schaldemose with the support of the CULT and JURI committees. The media sector has argued that the online platforms should not be able to take down news content that has already undergone editorial scrutiny, whereas those working in anti-disinformation fields say this would open the door to the amplification of disinformation. It might be too late to call the game over though, as it might be tabled as an amendment during the plenary vote. Moreover, publishers can count on the support of Germany, Denmark and Sweden in the Council to push other favourable proposals. Read more.

e-Commerce

Wish delisted. Search engines and app stores have been ordered by the French government to delist US e-commerce platform Wish for its “flouting” of product safety regulations, meaning the site will not appear in search results of engines such as Google and Bing. The decision follows findings that many of the products being sold on Wish were non-compliant with safety requirements or utterly dangerous, particularly the toys and electrical devices inspected, 95% of which were found to be non-compliant. Read more.

Media

Social media at the border. A new report has highlighted Facebook’s role in the crisis on the Poland-Belarus border. The report alleges that the platform is being openly used by human smugglers to attract people to the area, often stranding them in harsh conditions which have already left at least a dozen dead. Compounding the issue is the fact that the state of emergency in place in the border zone since September has prevented the media from accessing the area and reporting on the situation. Read more.

Competition-friendly collective. Australia’s richest person will offer support to 18 small publishers in their attempts to negotiate licensing deals with Google and Facebook. A landmark law passed by the country earlier this year requires the tech giants to pay news outlets for the use of their content, but many smaller media organisations have struggled to secure deals. As a result, the Minderoo Foundation has announced its intention to apply to the Australian Competition and Consumer Commission on their behalf so that they can collectively bargain with the online platforms without breaching competition law.

Platforms

Political ads. The Commission has unveiled a proposal to regulate political advertising to protect the electoral process and public debate from manipulation and interference. Planned to be operational a year in advance of the next European Parliament elections, the measure will introduce transparency and reporting obligations for advertisers running political campaigns. At the same time, it will no longer be possible to use sensitive data such as political views, religious beliefs, sexual orientation or ethnicity except with the explicit consent of the user. Read more.

Parental controls. A new bill tabled by France earlier this month, with high-level governmental support, will aim to ensure that electronic devices such as phones and gaming consoles have pre-installed parental controls. The law is part of a wider national strategy to better protect children online. The French government notified the European Commission of the plan this week, saying that it was confident the law would attract no opposition from Brussels. Read more.

Over and out. Uber will effectively cease to operate in Brussels as of Friday after a court expanded the scope of a cease and desist order against UberPop’s use of professional drivers. While drivers with Flemish licenses will still be able to work, 2,000 others will be prevented from doing so by the decision. However, a transport reform agreed to on Thursday afternoon by the Brussels regional government, after urgent calls and disruptive protests from drivers set to be impacted by the ruling, aims to institute a number of measures to standardise the sector in both the short and long term. An online petition calling for the ride-hailing app to be left available in the city has garnered more than 16,000 signatures as of Friday.

Backdated payment. Google Ireland will pay the country’s authorities more than €218 million in backdated corporation tax, a recent financial statement has outlined. The statement also said that the company was monitoring developments in the global corporate tax reform that could mean a rise in income tax in the coming years. Ireland recently signed up to the OECD’s minimum 15% corporate tax rate, after being a longstanding holdout to the deal.

Research & innovation

A forum for innovators. The European Innovation Council (EIC), which provides funding for startups developing breakthrough technologies, launched a Forum for the discussion of how to better shape innovation policy in the EU this week. The Forum will bring together an array of actors, from researchers to those working in the market, to consider issues in the field that stretch beyond the complexities of securing funding and speak instead to what the innovation landscape should look like. Read more.

New ERA. Conclusions on the future governance of the European Research Area (ERA) and on a series of research and innovation principles were approved by EU ministers at Friday’s Competitiveness Council. The two texts set out guidelines for the future of the ERA which was updated last year to respond to new challenges such as the pandemic and climate change. Friday also saw the launch of the Ljubljana Declaration which seeks to promote gender equality in the practice of research and innovation and the work itself.

Telecom

Roaming in deadlock. The negotiations on the recast of the Roaming Regulation hit a stalemate in the last trilogue on Tuesday. The reason for the impasse is the different views between the EU Parliament and Council around wholesale cap prices and fair use policy, with the MEPs sticking to their position on low tariffs and less restriction for users. The result of removing loosening too much the fair use policy would be permanent roaming, a situation feared by many national operators. The lawmakers might have to renounce one of their landmark additions to the proposal, which would equate intra-EU calls to national calls. The measure is outside the original scope of the regulation, therefore should not be included in a recast, the argument goes. The Slovenian Presidency is pushing hard to reach a compromise by mid-December but to do that it will need to give away somewhere.

Twin transitions

Let’s get this started. The European Parliament is due to start discussing the proposal for a common charger next Wednesday (1 December). The proposal was presented by the Commission in September while MEPs have been calling for such measures since 2009. The provisions would oblige all manufactures of electronic devices to use a USB Type-C port and not to ‘bundle’ chargers together with the devices.

 

What else we’re reading this week:

How China’s tech bosses cashed out at the right time (FT)

Where computing might go next (MIT Technology Review)

India to ban private cryptocurrencies and launch official digital currency (The Guardian)

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