Digital Brief, powered by FACEBOOK: Slovenia’s digital agenda, recovery plans falling short, Google sanctioned

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“We want to promote the EU digital agenda, to contribute to its success especially on the regulatory side. We think that we are fit for that”

– Iztok Jarc, Slovenia’s ambassador to the EU

 

Story of the week: In less than one month, Slovenia will take over the rotating Presidency of the EU Council, a key position to influence the legislative and diplomatic agenda. In an exclusive interview with EURACTIV, Ambassador Iztok Jarc laid out the priority for the six months ahead, promising to accelerate the legislative agenda to return at the pre-pandemic levels. The Slovenian government’s ambition is to reach a general approach for several legislative proposals that play a key role in the EU digital agenda, including the DSA, DMA and AI Act. In terms of regulations, the next Presidency will focus on the Digital Service Package. AI also ranks high on the agenda, as Slovenia can count on strong internal expertise on this ground-breaking technology. Cybersecurity is also a priority, and integrated in the broader context of digital diplomacy. Read more.

Don’t miss: a (still unpublished) study on 12 national recovery plans suggests that the historic economic stimulus is falling short of the Digital Decade targets. For digital connectivity in particular, the investments planned by the dozen countries would only count of the 45% needed to achieve high-speed connectivity by 2025, based on EIB estimates. The development of digital skills is another weak point identified by the analysis, with the funding provided only sufficient to train 3% of the EU workforce, while more than 20% of European workers are considered needing upskilling and reskilling. Read more.

 

Also this week: Polish content moderation push, Google sanctioned, Lisbon’s loophole, chips made in Europe, and much more.

 

EU-US data transfer negotiations

 

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 Learn more about our European partnerships.

DSA

Moderate yourself. The content moderation rules in the DSA have struck a nerve for the member states, as what is or isn’t allowed to be said is at the core of the countries’ political culture. A letter from Warsaw was reported backing France’s content moderation rules, which Paris presented earlier this year with a broader scope than the DSA, also to help fight radical Islamic content. Poland weighed in as the compatibility of the new measures with EU legislation is being assessed by the European Commission. The point the Polish authorities want to make is that content moderation matters should be dealt with at national level.

Platforms

First time for everything. The French competition authority has sanctioned Google with €220 mln for abusing and increasing its dominant position in the advertising market to promote its own products. Google has not disputed the accusations and is now committed to improving the interoperability of its services with third-party ad server and ad space sales platform solutions. The authority has specified that this is the first time an antitrust authority has assessed the complex work of algorithms in allocating online media space to display advertising. The search engine committed to making changes to its global advertising business to avoid market dominance abuses. Read more.

Ramping antitrust. Big Tech scrutiny is increasing. On Friday (4 June), the Commission announced the opening of an investigation into Facebook for potential antitrust conduct in the online classified ads, notably to favour its Marketplace service. The UK Competition and Markets Authority (CMA) is also scrutinising the social network in relation to its use of ad data. Still on the other side of the channel, the CMA has secured reassurances from Google on the removal of third-party cookies from Chrome. Google has also agreed to allow other search engines to be set as default in devices using its operating system Android. According to a draft decision, the Luxembourgish data protection watchdog is considering a record $425 mil fine against Amazon for a GDPR breach.

Voicing concerns. The European Commission published its initial findings on the Internet of Things sector inquiry on Wednesday (9 June). In presenting the preliminary report, Executive Vice-President Margrethe Vestager expressed worries over the emergence of gatekeepers in this expanding sector mentioning in particular the voice assistant market. For Vestager, the market dominance of Alexa (Amazon), Siri (Apple) and Google Assistant might lead to anti-competitive practices. The areas of potential concern include the exclusivity use of one certain voice assistant in operating systems, the intermediary role of the voice assistants, the excessive access to data and the lack of interoperability. The sector inquiry, launched in July 2020, is the result of a stakeholder consultation of over 200 companies of different sizes and locations.

Trump ban confirmed. On Friday (4 June) Facebook confirmed the suspension of former US President Donald Trump’s social media account at least until January 2023. After this period, the social network will reassess whether Trump is still a risk for public safety or not. Facebook specified that even if Trump is allowed back in, swift actions would be taken against the billionaire from New York if he was to violate the company’s content moderation rules again. Facebook’s announcement followed the decision of the Oversight Board, as the independent body upheld the ban but required the company to provide a timeframe.

Data & privacy

Lisbon’s loophole. At a time when authoritarian governments feel free to hijack airplanes to arrest journalists, a scandal hit the Municipality of Lisbon as local authorities confirmed that they had shared with Moscow the personal data of three Russian dissidents. The sensitive information was provided in order to receive the authorisation for a public rally protesting against the arrest of Kremlin critic Alexei Navalny. The Portuguese city still needs to provide an explanation for their actions, while it seems that authoritarian states are increasingly finding loopholes to persecute political opponents outside of their borders. Even in countries where personal data should be well protected. Read more.

Beijing’s sense of data security. China has approved a new data security law defining its data governance and security system. The new provisions will enter into force on 1 September, and will introduce new restriction on outbound transfers of “important data”. Entire categories of data, such as personal financial information, will not be transferable outside Chinese borders, while for accessing sensitive data the judicial authorities of other countries will need the ex-ante authorisation from Beijing. The move has been interpreted as part of a broader strategy of the Chinese government to reassert control over its tech giants and maintain control over data flows. China’s ambition for big data leadership has been underpinned by massive investments in data centres and digital infrastructure.

Not independent enough. The European Commission opened an infringement procedure against Belgium on Wednesday (9 June), on the ground that that independence of its data protection authority does not meet GDPR requirements. While the EU data protection law requires the privacy watchdog to be independent from the government, according to the Commission several members of the Belgian agency are reporting to the national executive. The publication of the letter is the first official step in an infringement procedure, Belgium has two months to take actions that restore the independence of its privacy authority.

Leading by example. Ireland’s four leading parties are being questioned for the way they have handled personal data. The audit of the Data Protection Commissioner was prompted by a journalistic investigation of the Irish Independent, which revealed that party members were given fake ID badges and instructions on how to pose as fake pollsters to survey households before and during elections. While three  parties admitted the use of fake pollsters, Sinn Féin justified it on the ground that it was a “common practice”.

Industrial strategy

Made in Europe. US tech giant Intel has recently announced it will open a manufacturing plant for cutting-edge computer chips in Europe, location to be confirmed by the end of the year. The move is part of an overall strategy to diversify its supply chains and scale up production amid soring global demand. Last month, Commissioner Breton called explicitly on Intel as the chipmaker company the EU wants to attract. The manufacturing site will provide foundry services, meaning that European companies will be able to request semiconductors based on tailored design, instead of ordering them from Taiwan or South Korea. The Commission’s target is to double its share of global production of advanced semiconductors by 2030. Read more.

Big Tech nation. France can certainly not be accused of lacking ambition, and Paris is now eyeing the tech sector as the next frontier to establish the nation’s grandeur. On Monday (7 June) Economy Minister Bruno le Maire promised that the Hexagon will upgrade from being a start-up nation to a country known for its large tech companies. The French state is ready to invest massively in the tech sector, seen as a key way to ensure economic wellbeing and political sovereignty. In a report published this week, consulting firm EY ranked France as the most attractive European country for foreign investments for the second year in a row.  Read more.

Intelligent by design. After massive investments in chip technologies were announced in Europe, United States and China, Big Tech is also entering the race. The development of chip design is still largely done manually, hence it can take months and up to €1 bn according to Commission estimates. Google has dramatically reduced the design time to less than a working day, thanks to Artificial Intelligence.

Media

You can’t do that. The European Commission announced on Wednesday (9 June) an infringement procedure against Hungary for refusing to renew the broadcasting license for Klubrádió, by many considered the last independent radio station that covered public affairs. The EU executive considered the decision of the Hungarian authority was based on “highly questionable grounds”, as it lacked proportionality and transparency. Read more.

Big Media vs Big Tech. Media mogul Rupert Muroch is reportedly waging war against tech giants, advocating for new antitrust legislation in the US Congress. At least five new antitrust laws are expected to pass Congress approval in the coming weeks. It is not the first time the businessman takes an aggressive stand against Big Tech, as he pushed for a legislation in Australia requiring Google and Facebook to pay to share content from his News Corp. The law prompted Facebook to block news feeds from media outlets and politicians around the country, leading to a major PR backlash.

Finance them please. On Thursday (10 June), the European Parliament approved by a very large majority a resolution calling on the European Commission to continue financing Euranet Plus. The pan-European radio network has received EU funding for 15 years and currently operates in 13 member states. The Commission’s plan is to stop by 31 December the direct funding in favour of an open call for proposals. However, MEPs consider the radio network needs a transition period of two years before being competitive for such procedure, without which the pan-European media would shutdown.

Global media freedom. Croatia’s Culture and Media Minister Nina Obuljen Koržinek signed a Global Pledge on Media Freedom during a meeting with Wendy Morton, the UK’s undersecretary for European neighbourhood. Croatia is currently working on a new media legislation intended to promote self-regulation and promote professionalism in the media sector. Read more.

 Cybersecurity

Beef it up. On Wednesday the European Parliament approved a resolution calling for enhanced cybersecurity standards for interconnected devices, operating system and critical infrastructure. While welcoming the Commission’s proposal for a revision of the Directive on Security of Network and Information Systems (NIS 2), EU lawmakers also pointed to need to avoid fragmentation in the Digital Single Market.

Cyber agents. On Thursday, the Italian government adopted the law decree establishing the new National Cybersecurity Agency (ACN). The new agency will be responsible for coordinating and implementing cybersecurity measures at the national level. The initial provision of 300 employees will steadily increase until reaching a total manpower of 800 people. ACN will operate under the responsibility of the Prime Minister. Read more.

5G

See you in court. The British satellite telecom company Inmarsat has legally challenged the Dutch government’s decision to reallocate radio spectrum frequencies from maritime communications to 5G. Inmarsat considers that both telecom services could co-exist in the same bandwidth, and says they regretted the “intransigence” of the Dutch authorities. The legal action is expected to further delay the 5G rollout in the Netherlands.

Clearance needed. Romania is the last EU country to introduce national security reasoning in the choice of the private provider that will develop its 5G network. According to the recently approved law, telecommunication companies will need a ”clearance” from the country’s Supreme Defense Council (CSAT) in order to provide technologies, equipment or software to national interest telecommunication infrastructure. The measure is deemed applicable to Huawei, after that several member states have taken similar provisions against the Chinese telecom provider. Read more.

Web tax

We have a deal. On Saturday (5 June), the finance ministers of the G7 countries announced a long-debated agreement on global tax that will directly affect Big Tech. The agreement includes a global minimum corporate tax rate of 15%, which should effectively put an end to tax avoidance enable by tax heavens. In addition, multinational corporations that make at least 10% of profit margin will see 20% of the profit beyond that threshold relocated and taxed in the country where they operate. The proposal is now on the table for the G20 summit that will take place in Venice in July. Read more.

 

What else I’m reading this week:

  • An interesting interview from the Guardian disputed the very notion of Artificial Intelligence.
  • BBC looked at a rather unexpected way to make cryptocurrency more environmentally sustainable.
  • Tech Crunch reported how the next step for surveillance in the workplace might be work analytics.

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