Welcome to EURACTIV’s Digital Brief, your weekly update on all things digital in the EU. You can subscribe to the newsletter here.
“It would have been impossible for me to whistleblow without encryption. My first messages to journalists were made with encryption, and without secure end-to-end encryption, it is impossible to see how brave investigative journalism could happen at all.”
– Edward Snowden, whistleblower of the NSA revelations
Story of the week: Edward Snowden has described encryption as essential to whistleblowers and a matter of life and death for many. Speaking at a Global Encryption Day event, Snowden noted that his 2013 NSA revelations would have been impossible without encryption. The event came the day after EU lawmakers expressed their concern over an upcoming Commission initiative that would establish automatic monitoring mechanisms for detecting child sexual abuse material, but which critics say could open the door to mass surveillance. Read more.
Don’t miss: Germany is inching closer to a ruling “traffic light” coalition, which would see digitalisation become one of the government’s top priorities. If the SPD-FDP-Green coalition goes ahead, it will emphasise economic competitiveness and digitising administrative processes and set in motion a much broader and holistic shift in the government’s overall digital strategy, particularly when it comes to data AI and blockchain. Read more.
Also, this week:
- Member states will (reluctantly) look into the Joint Cyber Unit
- EU bodies have come under fire for enhancing surveillance capacities in third countries without assessing the impact on fundamental rights and privacy
- French technology companies have called the government’s cloud strategy contradictory
- MEPs called for stronger support to the media sector in the digital environment
Before we start: China has been pushing an aggressive agenda on several digital issues. We discussed the Chinese strategy to regulate the tech sector and its implication for European businesses with Vera Demary, head of the research unit for digitalisation at the German Economic Institute. Listen to the podcast for more.
A message from Google:
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Liable AI. The Commission this week opened a public consultation on updating liability rules to fit the digital age, particularly in terms of AI. The Product Liability Directive (PLD) update, planned for the third quarter of 2022, is expected to complement the AI Act. The initiative is expected to better define liabilities related to intangibles, for instance, software updates or changes made throughout a product lifecycle. Another aspect the proposal is likely to cover is the access to remedy and compensation, shifting the burden of proof to ensure AI systems’ inner workings are transparent. A key question will relate to whom along the value chain will be responsible.
Endless quarrels. The infighting of the European Parliament’s committees for who takes the lead on the AI Act will continue for some more weeks. The chair of the Conference of Committee Chairs, Antonio Tajani, issued a recommendation for a joint JURI-IMCO leadership. The other political groups received Tajani’s advice with suspicion, as a fellow EPP member is expected to take the lead on the file in JURI. Joint leadership essentially means double the people involved in the file, which would result in a slower process, especially as the EPP and S&D do not see eye to eye in the controversial issue of biometric recognition. However, Tajani’s word is far from definitive as the decision is up to the Conference of Presidents that has overturned several of his recommendations in the past.
Biometric breaktimes. Schools in Scotland have faced considerable backlash, including from the office of the UK’s own Information Commissioner (ICO), over facial recognition technology in lunch payment systems. The ICO will intervene in response to concerns over the scanning of pupils’ faces which began this week, and plans to expand the use of the tech to other schools. The system defended as a way to speed up lunch queues has resulted in controversy over possible data protection and privacy implications.
Monitoring the music market. The UK’s Competition and Markets Authority (CMA) will begin a market study of music streaming services. This process seeks to identify issues in the environment and could result in policy changes that impact how tech giants can operate in the UK. The study comes in response to the rapid development of the music industry, and the watchdog says it will begin as soon as possible.
First-of-its-kind fine. The UK’s antitrust watchdog (CMA) has fined Facebook £50.5 million for violating an order the CMA had imposed during a previous investigation that looked into the platform’s acquisition of Giphy. In June 2020, the CMA issued an initial enforcement order (IEO) which is standard practice during a merger investigation. This week’s fine comes after Facebook was found to have significantly limited the scope of the compliance updates it must regularly submit as part of the IEO, despite multiple warnings from the CMA. The fine was issued alongside a £500,000 penalty also levelled at the tech giant for having twice changed its Chief Compliance Officer without consent.
Neighbouring fights. The French publishers’ lobby (APIG) has reached a deal with Facebook over the payment of journalistic content after months of discussions and tensions. The issue arose with France’s transposition of the EU’s 2019 copyright directive, and this week’s agreement solves only part of the problem: discussions with Google, which was fined €500 million by the French competition authority in July for failing to negotiate with publishers “in good faith”, are still ongoing. Read more.
Cold welcome. The Council has adopted conclusions inviting EU countries to “explore the potential” of a joint cyber unit that could help strengthen cyber resilience and crisis management. The text adopted this week is more cautious about the Commission’s proposal, put forward in June, as EU countries remain wary of duplicating cybersecurity initiatives already underway and overcomplicating existing efforts. Read more.
Data & privacy
Who surveils the surveillers? A group of privacy NGOs have accused the EU of contributing to the rollout of “surveillance” capacities in third countries, particularly in Africa and the Western Balkans, to the detriment of fundamental rights and data protection. The group filed a complaint with the EU Ombudsman this week, pointing out a series of initiatives carried out by the EU, such as training law enforcement agencies in the use of spyware and hacking technologies. The organisations claim the EU failed to assess the serious consequences of their potential misuse. Read more.
e-Evidence nears agreement. Agreement on several issues in the e-Evidence proposal seems to be within reach of EU co-legislators, according to an internal document published by Statewatch. Notification obligations, order suspensions, and grounds for refusal appear to be areas the three bodies could align on. But there are still crucial differences in their positions on other topics, such as which data categories need to be notified to the authority of the executing country and the so-called residence criterion. Read more.
Fine confirmed. Ireland’s Data Protection Commission (DPC) has imposed an administrative fine of €450,000 on Twitter for a bug which meant that if a user with a protected account changed their email address using Twitter for Android, their account would no longer be protected. The fine came after an investigation found that it had taken five days for Twitter to notify the DPC of the breach and that the company failed to document it adequately.
ECON report approaches. The ECON committee has found an agreement on the opinion report that is expected to be adopted next Tuesday. Rapporteur Stephanie Yon-Courtin outlined to the FT the key additions of her report. These include fines that can range between five and 20% of the company’s global revenue, provisions that would oblige a gatekeeper to commission an independent study to prove that an acquisition does not restrict market competition and enhanced transparency obligations on targeted advertising.
Disinformation doorway? Exempting media organisations from the content moderation policies proposed in the DSA would open the door to increased disinformation, the head of EUDIsinfo Lab has warned. Writing in EURACTIV, Diana Wallis argued that a “carve-out” in the regulation would prevent the effective tackling of disinformation and push back against the media sector’s criticism of the potential for “censorship” under the DSA. The Commission, joined by France, has positioned itself against the exception for press publishers, similarly warning of the potential harm of such a step.
Tracking dangers. The Irish Council for Civil Liberties (ICCL) has cautioned against the use of tracking-based online ads, warning that they endanger fundamental rights and the sustainability of publishers by favouring big tech and enabling fraud and disinformation. The ICCL’s report found that using contextual-based ads instead significantly increased revenue, whereas tracking-based ads upped the chances of data breaches and user profiling.
Cloud contradictions. Members of the French cloud industry have criticised France’s “trusted cloud” strategy, describing it as “contradictory” and leaving little room for competition with major tech companies regarding digital sovereignty. Google and French firm Thales recently partnered on a trusted cloud project, welcomed by a government that stressed the need to avoid dependence on foreign technologies just a few hours later. Industry players have hit back at the confusion, arguing that the approach opens the door to GAFAM rather than prioritising a sovereign cloud. Read more.
Funding focus. Parliament this week passed a resolution on Europe’s Media in the Digital Decade, designed to support the sector in its recovery from the pandemic and in the shift towards digitalisation. The resolution voted through with a comfortable margin seeks to address the revenue hit the media has taken due to the crisis and the growing influence of online platforms. Read more.
Attacks on the rise. The first nine months of 2021 saw a steep increase in attacks against female journalists in Europe, with reported violations rising 16.7% compared with the whole of 2020. The 149 cases recorded by the Coalition For Women In Journalism between January and October this year include physical attacks, arrests, abusive litigation and more. However, numbers are likely significantly higher given the nature of the violations and the redress mechanisms in place. Read more.
Incoming: the Metaverse. Facebook intends to hire 10,000 people in the EU to build the “metaverse” technology to create a virtual reality version of the Internet, further dissolving the boundary between the real and digital worlds. The company is also planning a rebrand next week to reflect its new focus on the AR/VR-led, all-encompassing expansion of the Internet. The announcement comes when the tech giant is under fire following a series of scandals and ahead of the high-profile testimony of whistleblower Frances Haugen at the European Parliament on 8 November. But the bad news does not stop there for Facebook. CEO Mark Zuckerberg has become a defendant in a lawsuit concerning the Cambridge Analytica scandal after an investigation by the Attorney General of Washington D.C. found that he was personally involved in some key decisions.
Undisclosed sponsorship. Facebook’s whistleblower Frances Haugen has been indirectly financially supported by eBay’s billionaire founder, Pierre Omidyar, according to recent media revelations. The funding, which has bolstered Haugen’s PR and legal support, gives her a basis that many whistleblowers don’t have access to and shows the strength and investment of tech industry players on both sides of the debate.
Verification required. French Senator Alain Cadec has proposed creating an independent supervisory body that would authenticate the users’ identities on online platforms at the point of registration. The intent of the change would be to prevent cyberbullying and make it easier for offenders to be prosecuted. Still, some are concerned that this could have severe implications for pseudo-anonymity, considered by many to be a founding principle of the Internet. Read more
Commission cuts. Google has lowered commissions on subscription-based services to 15% available on the Play Store, halving the amount they’d usually pay. Following other recent and upcoming changes to commissions, Google said, 99% of developers will now qualify for a fee of 15% or less, with some eligible for levies as low as 10%. The change, however, will not apply to in-app purchases, the route through which games make most of their money. All eyes are now on Apple, which has also come under increasing regulatory pressure and antitrust scrutiny over the management of its App Store.
Ad windfall. In the six months following its introduction of controversial iPhone privacy changes, the market share of Apple’s ad business has more than tripled. The changes, which meant users were opted out of automatic ad tracking, prevented rivals such as Facebook and Google from targeting their ads at users. Apple is now on course to earn $5 billion from advertising this fiscal year. The case illustrates the strong relation between privacy and competition.
What else we’re reading this week:
Trump to launch his own social media platform, calling it TRUTH Social (Tech Crunch)
FTC Staff Report Finds Many Internet Service Providers Collect Troves of Personal Data, Users Have Few Options to Restrict Use (FTC)