Welcome to EURACTIV’s Digital Brief, your weekly update on all things digital in the EU. You can subscribe to the newsletter here.
“We are talking here about a fundamental right of EU citizens that we have a duty to protect. This is why we have significant safeguards and if anything changes on the UK side, we will intervene.”
-Věra Jourová, European Commission Vice-President for Values and Transparency
Story of the week: The European Commission’s data adequacy decision on the UK finally landed on Monday. The decision formally recognises that the UK privacy law provides a comparable level of data protection to GDPR, which is not surprising since the legal framework has not changed since Brexit. There are important caveats, however. Since PM Boris Johnson mentioned last year that London might change its privacy law, the Commission has included unprecedented time limitations, as the decision will need to be renewed in four years. VP Jourová also made clear that any significant change to the privacy safeguards would prompt a swift reaction from Brussels, either in the form of changes to the legal framework or with trade agreements that might enable EU personal data to be transferred to third countries without adequate protection. UK businesses operating on both sides of the Channel have already seen a dramatic drop in revenues, hence there is an argument to make that London will try to avoid destabilising them further. What remains to be seen is if the adequacy decision will stand judicial scrutiny. Read more.
Don’t miss: Cybersecurity, Artificial Intelligence, Digital Services Package, and roaming negotiations rank at the top of Slovenia’s EU presidency agenda, as Ljubljana took over at the helm of the EU Council on Thursday. The ePrivacy regulation, however, will receive much less attention, EURACTIV has learned. The legislative proposal intended to regulate electronic communications has stalled in the Council for four years until an agreement was finally reached last February. The most controversial parts of the proposal remain the processing of metadata and the storage of data in the consumer equipment, for instance in the form of cookies. The next trilogue negotiation is planned for mid-September, but don’t expect a compromise any time soon. Read more.
Also this week:
- OECD reaches an agreement on a corporate tax deal, Ireland and Hungary refuse to sign it.
- France’s digital share of the recovery plan falls short of the 2030 digital target goals.
- German data watchdogs eye the recent EUCJ ruling as an opportunity to the GDPR “forum shopping”.
A message from Google
Investing in products and policies to support recovery and boost innovation
To ensure that the latest and best technology works for Europeans- while protecting the values and rights Europeans hold dear- the Digital Markets Act (DMA) needs to be evidence-based and take into account the specificities of the different businesses and markets.
That’s why we work constructively with regulators to promote skills and technology, make changes to our products and ensure oversight.
Room for improvement. Germany hopes to spearhead the next technological revolution, with plans including investing 3.5% of GDP in research and innovation by 2025, despite already spending well above the EU average. However, critics say Germany still faces shortfalls in certain areas which need to be addressed if its aspirations are to be met. Read more.
France’s digital shortfall. A new study has warned that the course set out in France’s recovery plan is likely to fall short of what is needed to meet the digital transition ambitions presented by the European Commission in March. The French government has pledged 21.32% of the recovery funds it will receive to digitalisation, significantly less than the 52% that Germany plans to invest in similar projects. Read more.
Semiconductors take centre stage. The Chinese government is eager to raise the country’s competitiveness in the semiconductor industry, an area of key rivalry with the US and Europe, according to a new report by the Mercator Institute for China Studies. This is reflected in the move by China’s Ministry of Education to make semiconductor science and engineering a priority in academia, with the launch of new departments and schools dedicated to the subject.
Data & privacy
GDPR critique. The outgoing head of Hamburg’s data protection agency, Johannes Caspar, has described the EU’s General Data Protection Regulation (GDPR) as “broken”, saying the room it leaves for interpretation has led to infighting between authorities. The GDPR, which came into effect in 2018, addresses data protection and privacy but its basic model suffers from “massive flaws” according to Caspar, who gained a reputation as one of the toughest EU data watchdogs during the 12 years he held the position.
Something might be changing. The recent EU Court ruling on cross-border cases has opened the door for a change of pace in sluggish GDPR enforcement. The Court restated the principle of the one-stop shop but also confirmed the existing conditions under which data protection investigations can be initiated in countries other than the one where the data processor is established. The German DPAs consider the Court’s decision might end the deadlock and favour stronger actions against the tech giants. Read more.
Three years of breaches. The Scottish Government and its agencies have been found to have violated data protection rules nearly 2,000 times since the GDPR was introduced in 2018. Scotland’s prison service was responsible for over 1,100 of the breaches and the government itself was ranked as the second-worst offender. Following Brexit, the GDPR’s provisions were incorporated into UK law. On Monday, the European Commission concluded the process of formally recognising the UK’s legal protection on privacy as equivalent to the EU’s, opening the doors for the free movement of personal data. The decision, however, includes measures that would allow Brussels to revise this decision should UK law change.
Getting real. The OECD announced on Thursday that 130 countries have agreed to support a minimum corporate tax rate of 15%. However, a number of EU countries have refused to join or have expressed opposition to moving away from the existing tax structure, which the OECD described as “no longer fit for purpose in a globalised and digitalised 21st-century economy.” Ireland and Hungary refused to sign the agreement despite the huge political pressure from countries with historically advantageous tax regimes such as Switzerland and the Bahamas. The new system will see tax increases for tech companies such as Google, Facebook, Apple and Amazon but will also cover companies in other sectors, avoiding a situation feared by the US in which the EU directed levies solely towards digital giants. OECD signatories also committed to removing their digital taxes.
Privacy Sandbox delay. Google has postponed its plans to launch an alternative to third-party cookies until 2023, a year later than the original deadline. The initiative, which was the key component of the company’s “Privacy Sandbox”, aims to remove third-party cookies, which are used by sites other than the one that a user is on to track their activity. The decision to postpone followed criticism of Google amid calls for more time and discussion of the issue. Read more.
Ad approval falls short. Facebook’s ad vetting process has been revealed to have major flaws after an NGO tried to test the ease with which targeted ads designed to incite violence in Northern Ireland were approved for publication. Global Witness submitted for approval a collection of inflammatory ads intended to violate the platform’s hate speech and violent incitement policies, targeting them at religious communities across Northern Ireland’s “sectarian divide”. In every case, the ads were approved. Read more.
Fake reviews. Not for the first time, the UK’s Competition and Markets Authority has launched an investigation into fake reviews on big tech platforms. This time it’s targeted at Amazon and Google, and will examine whether the platforms have breached UK law by failing to protect users from fake online reviews. The watchdog has been focused on the issue of fake reviews for a number of years and in 2020 elicited pledges from eBay and Facebook to do more to tackle them. The EU has also launched a probe into Google over concerns that the company might be breaching antitrust rules by favouring its own ad tech services on YouTube.
Agree to disagree. Microsoft and Google have cast aside a five-year legal truce, after a dispute over ad tech. The informal agreement also created a process for behind-the-scenes resolution of conflicts and its abandonment could open both companies up to greater scrutiny on antitrust issues by removing the process that has prevented disputes from rising to the formal level and ending up on the desks of regulators.
You win, for now. A court in Washington DC has dismissed two antitrust lawsuits against Facebook, arguing that it could not be legally proven that the company had a monopoly on social media. The case is not closed for the filers of one of those suits, however. The Federal Trade Commission (FTC), newly led by vocal big-tech critic Lina Khan, now has 30 days to amend its lawsuit if it wishes to proceed. Separately, Amazon has requested that Khan, who assumed the role of FTC chair just weeks ago, recuse herself from any antitrust investigations that they’re involved in. The tech giant cites articles and opinions she authored in previous roles that they say show prejudice against the company.
Preparing to be regulated. In anticipation of upcoming years of global tech regulation, Microsoft will begin a 20% expansion of its legal and corporate affairs unit. An internal memo on the planned expansion showed that tech regulation is growing in much of the world. Privacy and AI are just some of the areas in which the company expects to see increased regulation. Legislation underway in the EU at the moment could provide a snapshot of the kind of regulation that big tech companies will increasingly have to face.
A step too far? The lengths that Chinese authorities have gone to in cracking down on tech companies will only hinder innovation and growth, an advisor from the Centre for Strategic and International Studies has said. Scott Kennedy told CNBC that the government’s restrictions will both prevent the establishment of new companies and limit the likelihood of existing ones making investments. Anti-monopoly regulation has been strengthened in China in recent months but going too far, Kennedy warned, risks slowing economic growth.
Robots to call Finland home. A new Amazon Development Centre is to open in Helsinki, focused on developing autonomous delivery technology. An initial 24 engineers will work on the Amazon Scout, a delivery robot currently being used to deliver packages in four areas of the US. The centre will work with existing Amazon researchers in the US, UK and Germany to build 3D software that will help the Scout learn to negotiate different environments.
Media sector denounces law. A new Hungarian law that bans LGBTQI+ references for those under 18 has drawn rebukes from Europe’s media sector along with international condemnation. The bill outlaws “promoting or portraying” homosexuality or gender reassignment, which could mean that certain content is restricted or banned from TV and advertisements. European broadcasters signed an open letter this week denouncing the law, arguing that it is openly discriminatory and that the way it seeks to control content contravenes both the Audio-Visual Media Services Directive and the EU Charter’s fundamental rights.
News Media Bargaining Code. Australia’s Competition and Consumer Commission has announced draft plans to allow the members of Country Press Australia, a regional newspaper industry group, to collectively negotiate payment from Facebook and Google for the use of their news content on the platforms. The passage of a world-first “News Media Bargaining Code” in February led to Facebook blocking its Australian users from accessing or sharing news content on the platform. The ban was lifted the following week after negotiations between the government and the tech giant led to concessions from both sides.
Film sector relief. An €8 million Greek scheme designed to address the losses incurred by film distributors and cinemas as a result of the COVID-19 pandemic has been approved by the European Commission. Last year, the government came under fire after it was revealed that many of the recipients of a €20 million media relief package were outlets with minimal readership or that did not exist at all. The revelation led some groups to return the money they had received in protest.
Safety in journalism. A new survey launched by the European Federation of Journalists (EFJ) is the latest in the organisation’s efforts to promote safer working environments for journalists. The multilingual survey will assess how journalists view threats to their mental and physical health and safety and how they can be better supported, especially by their employers and journalism organisations, in mitigating or avoiding them. The EFJ is also developing a free online platform to help journalists conduct risk assessments before beginning assignments, at a time when media freedom is declining in Europe.
5G’s pandemic progress. The GSMA, a trade association representing mobile operators, has released its 2021 Global Mobile Economy report. The report finds that the COVID-19 pandemic has had little effect on the rollout of 5G networks, even making it easier in some cases given the increased demand for connectivity. It also points out the meteoric rise of 5G: while there were just three such networks in February 2019, all of which were in South Korea, today there are 160, across 65 countries.
5G heads to the cloud. IBM has announced plans to offer a range of new services to Verizon and Telefonica, broadening its relationship with the telecoms operators. Among them will be cloud services for 5G networks along with machine learning and AI. Orange has also announced its intention to launch an experimental 5G network using a cloud-based platform and AI. The network will begin in France but Orange hopes to expand to other countries next year. AT&T has also said that it will run key sections of its 5G network on Microsoft’s cloud computing platform. The decision is a win for Microsoft, as it marks the first carrier to switch to the platform, which was developed precisely for this purpose. The moves mark a broader shift towards cloud usage in the industry, often in the name of cost-cutting.
Cloud-powered tech transformation. Google Cloud and Ericsson have unveiled a partnership to develop 5G and edge cloud solutions aimed at bringing connectivity physically closer to companies in the automotive, transportation and manufacturing sectors, among others, thereby helping them shift towards more efficient and digitally transformed operations.
Nobelium strikes again. Microsoft reported that targeted hacking attempts had been launched against customers after the computer of one of its customer-service agents was infiltrated. The attack was discovered while Microsoft was investigating the hacking group it says launched the SolarWinds attack last year, which saw US government agencies and businesses compromised. Microsoft says the group, which it has labelled “Nobelium”, belongs to Russia’s Federal Security Service.
Cyberstrength rankings. The International Institute of Strategic Studies (IISS) has released a report assessing the cyber power of 15 countries. The report also outlines a new qualitative framework for ranking state cyber capacity, placing the US ahead of all others as the only “Tier 1” state. China, the report says, is currently the only country on track to join the US in the first tier.
Urban AI. A new Global Observatory on Artificial Intelligence launched this week under the Cities Coalition for Digital Rights will focus on controlling the application of AI in cities to combat the risks it poses and promote its transparent and ethical use. The centre arrives a few weeks after the European Commission published its proposed regulation of the use of AI, which would establish a legal framework to promote and address the dangers of the technology.
The unseen dangers of surveillance. The European Parliament’s Civil Liberties Committee has warned of the need for strong protections to prevent the abuse of Artificial Intelligence by law enforcement and the judiciary. In a draft report, the LIBE committee says safeguards are needed to prevent mass surveillance and discrimination. The dangerous effects of surveillance technologies have been made clear in India, where the use of biometric identification and mass CCTV networks has reportedly accelerated the marginalization of vulnerable groups and exacerbated caste-based discrimination.
The pros of personalisation. A report by Copenhagen Economics and sponsored by Google has warned of the potential harm for overregulating or banning the use of personalised ads could cause. While the study recognises the legitimate concern to privacy, it contends the consequences on limiting targeted ads have not been fully considered. According to the Nordic consultancy, measures such as those included in the proposed Digital Services Act could reduce EU GDP by 0.22-0.3% of GDP (or €76-106 billion) per year. In February, the EU’s data watchdog said the DSA’s advertising transparency measures didn’t go far enough and called for an outright ban on such targeted ads.
“Paris Agreement for Disinformation”. Research by global advocacy organisation Avaaz has revealed major failings in the efforts of Facebook, YouTube, Twitter and Instagram to tackle COVID-19 disinformation since the pandemic began. The group is now calling for a change. Avaaz’s campaign director spoke to EURACTIV about the potential role of the European Commission’s Code of Practice on Disinformation and the proposed Digital Services Act in better addressing the issue. Read more.
False narratives. EUvsDisinfo, the EU East StratCom Task Force’s fact-checking project, this week flagged a piece of disinformation about the relationship between the US and EU. Responding to articles that described the leaders of European countries as “subject to American policy and dictates” and therefore prevented from cooperating with Russia, the site said that the portrayal of the EU as a “vassal” of the US was a “recurring pro-Kremlin disinformation narrative”.
Space tech goes global. More than 1,500 of the satellites in Elon Musk’s Starlink network have been launched so far, and Space Exploration Technologies Corp (Space X), which runs the programme aims to extend broadband reach to cover most of the world by August of this year. A new version of the satellites, to be launched next year, is set to include inter-satellite laser links which would extend coverage to the polar regions.
VAT rules shift online. New VAT rules for e-commerce sales took effect on Thursday, with a number of key changes. These include the fact that the One-Stop Shop and Import systems are now operational, simplifying the obligations faced by online vendors and marketplaces.
What else I’m reading this week:
5G networks are set to be central to the deployment of hypersonic weapons, with significant consequences for the future of war. (Market Forecast)
Is it possible to prevent systems for detecting bias in AI from being biased themselves? (New York Times)
Whistle-blower Edward Snowden provides an interesting explanation for the proliferation of conspiracy theories. (The Guardian)