connectivity’s contribution, Apple Pay probe, AI fines – EURACTIV.com | #cybersecurity | #cyberattack


Welcome to EURACTIV’s Tech Brief, your weekly update on all things digital in the EU. You can subscribe to the newsletter here

 

“The rules in place for twenty years are running out of steam and operators no longer have the right return on their investments. It is necessary to  reorganize the fair remuneration of the networks,”

-Internal Market Commissioner Thierry Breton in an interview with Les Echos

 

Story of the week: The European Commission will launch a legislative initiative by the end of this year to address a long-standing complaint of telecom operators that online platforms are not paying their fair share in relation to the high amounts of data they consume. Therefore, the initiative is set to require content-heavy platforms to contribute to the costs of networks, which according to telecom operators should enable a faster 5G deployment. However, platforms stress that they have been the main drivers for the telecom services, and argue that what the operators are asking for essentially amounts to “double-dipping” since consumers already pay for traffic.

The announcement was made by Commissioner Thierry Breton in an interview with Les Echos, following a renewed push by trade association ETNO with the publication of a study supporting the telecoms’ argument. Asked to comment on that, EU digital chief Margrethe Vestager told the press on Monday that “players that generate a lot of traffic that then enables their business, but who have not been actually contributing to enable that traffic, they have not been contributing to enabling the investments in the rollout of connectivity.” Perhaps not to lose the lead on the file, Breton made the announcement at a particularly odd time, given the TTC summit that is due to take place next week, and caught several observers by surprise, apparently even the telecom operators.

The announcement has raised more questions than it has provided answers so far. How will this ‘fair contribution’ be calculated given the very different business models of online platforms? How can the Commission ensure that the money will actually be spent on infrastructure and will not be distributed in dividends? How can a targeted approach be squared with the principle of net neutrality? We try to reply to these and more questions in this week’s podcast. What is clear, however, is that we can expect a long and bloody battle ahead of us, with significant parallels with the Copyright Directive. Read more.

 

Don’t miss: The European Commission has escalated to the next level an antitrust investigation into Apple Pay, launched in 2020. For the EU executive, the preliminary findings have suggested that the tech company has “unfairly shielded” its mobile payment system from competitors by refusing them to integrate the Near-Filed Communication (NFC), currently the best technology available. At a press conference on Monday, EU competition chief Margrethe Vestager dismissed Apple’s security argument and said that if confirmed the tech giant’s behaviour would constitute an abuse of a dominant position. Read more. 

 

Also this week

  • The French Presidency shared a compromise text on the implementation of the AI Act.
  • The German competition authorities put Meta under a special surveillance regime.
  • RT and Sputnik have found ways to circumvent EU sanctions, a report says.
  • France wants the notification timeline for political ads to be shortened to 48 hours ahead of elections.
  • We got hold of the presentations on the Data Act the European Commission has been giving to member states in the past weeks.

 

Before we start: This week, Commissioner Breton announced a new initiative to make online platforms contribute to the cost of digital infrastructure. We discuss the reasoning behind this proposal, possible precedents and main practical issues that it will need to address with Gerard Pogorel, Professor of Economics-Emeritus at Telecom Paris, and Innocenzo Genna, ICT legal expert.

GAFAM tax or fair contribution?

This week, Commissioner Breton announced a new initiative to make online platforms contribute to the cost of digital infrastructure. We discuss the reasoning behind this proposal, possible precedents and main practical issues that it will need to address with Gerard …

Artificial Intelligence

Proportionate fines. The French presidency of the EU Council has made a number of proposals in terms of enforcement of the EU’s AI Act, with significant changes to the sanctions regime, timeline, delegate powers and confidentiality requirements. In terms of fines, France is pushing to keep the highest ones limited to the violation of prohibited practices and reduce the maximum for SMEs and start-ups. However, the wording ‘whichever is higher in this article makes the lower cap for SMEs largely useless, and it might have slipped the attention. At the same time, the fines have been extended also for those not compliant with notified bodies, which, taken with the proposals from last week, might anticipate an increasing role of these bodies.

More time needed. The deadline for application has been extended (as usual, one might say) from two to three years to give businesses time to adapt following the example of the GDPR, the internal note said. The review of Annexes I and III has been extended from one to two years, which might cause anxiety among MEPs as the regulation might be less able to catch new developments in time. However, it might also help mitigate the constant struggle for resources inside the Commission.

More requirements, less power. The confidentiality requirements, originally only meant for notified bodies, have been extended to everyone involved in the enforcement, including the Commission and national authorities. The power delegated to the Commission has also been significantly reduced, as it would have to be renewed every five years and is subject to a veto from the EU Parliament and Council. Read more.

Competition

Meta’s paramount importance. Germany’s competition authority, the Bundeskartellamt, can take stricter measures against Meta after the watchdog ruled that the US tech giant is of “paramount importance” in terms of competition, similar to rivals such as Google’s parent company Alphabet. The decision means that the authority can now take stronger action to prohibit practices that threaten competition in the sector and could foreshadow potentially similar rulings against Amazon and Apple. Read more. 

See you in court. Google this week urged the EU’s General Court to dismiss a €1.49 billion fine imposed in 2019 as the result of an EU antitrust investigation into the tech giant’s ad practices. As a result of its probe, the Commission found that, between 2006 and 2016, Google had abused its dominance in online search advertising to prevent rival websites from using brokers other than its own AdSense tool. The company, which has already accrued over €8 billion worth of EU competition fines, took to the Luxembourg-based court this week to challenge the decision. Read more.

Not good enough. The Dutch competition authority said this week that modifications made by Apple to the conditions for dating apps are insufficient and fall short of EU and national standards. The watchdog noted that there had been some improvements but is set to issue an order for penalty payments to be made by the company. The ruling stems from an order issued by the authority over what it said were unreasonable restrictions on the ability of dating app providers to choose the payment system for purchases made within their apps.

You are next. The issue of dating apps is not over for the ACM, however. This week saw the Dutch watchdog launch a preliminary investigation into Google following a complaint by Match Group, the owner of Tinder and other dating apps, over the payment systems in place on the tech giant’s Android Play Store.

Cybersecurity

Cybercrime protocol. In anticipation of the signing of the second additional protocol to the Convention of Cybercrime on 12 and 13 May, the Council of Europe held a press conference on 6 May. Alexander Seger, head of the CoE cybercrime division, expressed hope that at least a third of the 66 countries that signed the original Budapest convention would sign, a low confirmation rate justified by the fact that governments are distracted by the war in Ukraine. “It will provide for new, innovative and more effective tools to secure electronic evidence and protect individuals against crime with, at the same time, a strong system of rule of law and data protection safeguards,” said Seger. In response to concerns about the protocol’s compatibility with data protection, privacy and procedural rights, Seger said that “we feel very comfortable that we meet the requirements and that this instrument will also stand the test of courts later on.”

We are ready, aren’t we? In a European Parliament Plenary debate on Tuesday (2 May) in Strasbourg, MEPs discussed the level of EU preparedness against cyber-attacks following the Russian invasion of Ukraine. While Commission Vice-President Margaritis Schinas expressed his conviction that the EU would be able to react in the event of a large-scale cyber-attack, MEPs emphasised that critical entities are highly vulnerable. The need to further invest in digital defence, cyber literacy as well as improving cross-border cooperation in responding to cyber incidents were mentioned by lawmakers from across the aisle.

Data & privacy

Presentation time. The Commission has been attempting to clarify to member states how its new Data Act will apply and interact with other legislation. Through a series of presentations, seen by EURACTIV, the EU executive has laid out aspects of the proposal law including the legislative framework in which it will operate and how it will approach international data transfers. Three more of these workshops are set to take place with national experts by 25 May. Read more.

Now listen to this. The European Data Protection Board and the European Data Protection Supervisor have issued a joint opinion on the EU’s proposed Data Act, concluding that gaps in its coverage risk exposing highly sensitive data about individuals to data sharing and use. The two bodies also called for the introduction of additional safeguards in order to ensure that the fundamental rights to privacy and the protection of personal data are not compromised by the legislation, notably stressing the need to ensure that Business-to-Government (B2G) data access is made in a lawful and proportionate manner.

No EHDS without GDPR? The Commission presented its European Health Data Space (EHDS) this week, a proposal intended to boost the current low usage of digital health data within the EU, a product of limited interoperability and divergent member state standards. The initiative includes an additional level of security to safeguard the privacy of people’s data, envisioned as a “GDPR+ system” focused on agreement on data usage rather than the existing consent system, but the success of the proposal, some have warned, depends on how well it can address concerns created by the uneven implementation of the GDPR. Read more.

Passing the buck. MEPs in Strasbourg this week slated the Commission for lack of action in relation to revelations about the use of Pegasus spyware against European officials. Lawmakers criticised the EU executive for passing the buck to member states when it comes to addressing revelations that the tech had been used to access the devices of politicians, journalists, and human rights defenders, and followed recent revelations that Spanish intelligence services had targeted Catalan activists and politicians. The European Parliament itself has established a committee to conduct an investigation into the issue. Read more.

Europol’s new mandate. Lawmakers approved on Wednesday the strengthening of Europol’s mandate and the Schengen Information System, greenlighting a deal reached earlier this year. The new mandate will give the EU law enforcement agency the ability to process large quantities of data and includes the creation of a Fundamental Rights Officer to oversee its protection. Civil rights groups, however, have reacted with alarm to the endorsement of the proposal, arguing that it opens the door to data-driven policing, mass surveillance and the potential rights-infringements and discrimination that could accompany this.

Digital Markets Act

Cooperation in competition. Close collaboration with competition authorities within and outside of the EU will be essential to the enforcement of the DMA once it enters force next spring, antitrust commissioner Margrethe Vestager said this week. Speaking in Berlin on the subject of international competition cooperation, Vestager detailed the extensive preparations required to ready the EU for the implementation of the landmark legislation, saying “the efforts needed at a global scale are enormous.” This close cooperation, she added “will be necessary because we will not be short of work and we will not be short of novel services or practices to look at.”

Approval delayed. The final text on the Digital Market Act was set to receive the green light by EU ambassadors gathered in COREPER today. However, the meeting had to be postponed to next Wednesday as the French Deputy Permanent Representative caught COVID.

Digital Services Act

Nothing to see here. Where are the DSA’s recitals? That is a question many attentive stakeholders are asking, including the MEPs involved in the file. “It is a black box,” a parliamentary official told EURACTIV, stressing that the secretariat was not showing the text to any political groups except, perhaps, to the rapporteur. A behaviour that contradicts the usual practice and leads the official to think that “something is going on”.

Disinformation

New rules, new loopholes. Content from Kremlin-backed media outlets RT and Sputnik is still accessible on social media in the EU, despite sanctions banning its broadcast and dissemination within the bloc imposed in March. According to a new report by a coalition of civil society organisations working on disinformation, steps taken by four major platforms to curb the spread of the material have had varying levels of success, with the material still available in a number of ways. Not only are there gaps within the measures taken, the report found, but individual RT journalists have adapted to circumvent the bans. Read more.

Troll professionals. A large-scale campaign to spread disinformation about the war in Ukraine is being run by a troll factory in St Petersburg, according to a study commissioned by the UK government. For a reported figure of nearly €600 a month, participants are required to post 200 comments a day on social media, with the primary aim of the operation being to praise Russian President Vladimir Putin and manipulate international public opinion about Russia’s presence in Ukraine. London said it had alerted its international partners to the set-up and had shared its findings with major platforms to urge them to remove any misleading content. Read more.

Propaganda paradise. A parliamentary investigation has been opened in Italy to investigate foreign interference and disinformation on national television following a series of controversial appearances of Russian guests speaking about the war in Ukraine. The committee looking into the situation said this week that it had summoned the heads of the country’s state TV network, state security agency and communications watchdog. The country’s public broadcaster and a number of private channels have drawn criticism recently after what some described as them having given air time to Russian “propagandists”, including via the broadcast of an interview last weekend with the Russian Foreign Minister Sergei Lavrov. Read more.

Industrial strategy

Sounds like a plan. A large-scale cloud project at the centre of the Romanian government’s digitalisation plan has so far attracted significant controversy, with protests over a range of aspects of the plan from the IT and non-governmental sectors, as well as from state institutions. The project, which is a key deliverable of the country’s National Recovery and Resilience Plan, would see a central role for the country’s intelligence services to develop the infrastructure and maintain its cybersecurity. Key public institutions such as the Constitutional Court, the body that oversees the electoral process, and the anti-corruption authority have already made clear they won’t buy into it. Since then, the government has backpedalled and tried to put the polemics to rest. Read more.

Media

The annual warning. 40% of Europe and Central Asia is facing a “problematic” press freedom situation, according to Reporters Without Borders (RSF) 2022 Press Freedom Index. As usual, this year’s ranking is topped by three Nordic countries – Norway, Denmark and Sweden – and RSF points to the spread of disinformation, as well as to the growth of what it describes as the “Fox News model” of opinion media, as culprits for an increasing polarisation within societies. While Europe and Central Asia rank as the regions with the highest percentage of territory classed as being in a “good” situation, the Index’s release comes at a time when concerns over the state of press freedom and journalist safety in Europe are increasing, particularly in the context of the war in Ukraine, which has already proved extremely deadly for media workers. Read more. 

We have a winner. While the methodology for the Index’s calculation changed this year, complicating comparisons with data from 2021, one shift has been striking: Greece fell from 70th to 108th place, replacing Bulgaria as the lowest-ranked country in the EU. RSF attributes Bulgaria’s rise, from 112th to 91st place, to the election of a new government last year, after 12 years of declining media freedom under conservative Prime Minister Boyko Borissov. Conversely, concerns have been growing about press freedom in Greece, with key setbacks over the past two years, including journalists being prevented from covering issues such as migration and COVID-19, as well as the murder of reporter Giorgos Karaivaz in Athens last year. Read more.

Still in the Balkans. In the Western Balkans, the picture is mixed. A number of countries fell in the rankings, Albania by 20 places to a record low of 103rd, Bosnia and Herzegovina on a smaller scale, and Montenegro fractionally, but North Macedonia, Serbia and Kosovo all saw improvements in their status on the list. Albania’s Prime Minister Edi Rama, however, hit back at the findings, describing the Index as a “lie” and “fantasy” on Twitter. The report criticised the Albanian media landscape for its lack of independence, failure to protect source confidentiality and attacks on journalists. By contrast, Rama responded that “there is no intimidation of media in Albania, nor obstruction of journalists’ freedom.” Read more.

Platforms

Urgent notifications. The window for addressing notifications about political ads would be shortened to 48 hours in the month leading up to an election under the French EU Council presidency’s first compromise proposal on political ad regulation. Among the changes introduced in the text was the shortening of the time frame for processing these notifications and responding to them by providing the requested information. The initiative, launched by the Commission in November with the aim of better safeguarding Europe’s electoral integrity in time for the next parliamentary elections in 2024, is now set to be discussed by diplomats in the Council. Read more.

The battle begins. As S&D MEP Elisabetta Gualmini’s draft report on platform workers is expected to be made public any day now, centre-right MEPs are warning: “we should avoid looking at it through traditional labour market standards,” Aldo Patriciello and Miriam Lexmann wrote last week in an internal email to colleagues in Parliament’s EMPL committee, seen by EURACTIV. The EPP lawmakers called for not “eliminating all advantages this new model provides like independence and flexibility for workers”, echoing the arguments put forward by the platforms.

Discussions kick-off. Meanwhile, in the Council, discussions on the proposal centre around the member states’ concerns that the legal implications the directive could have on sometimes very different labour market models from one country to another. Sweden, in particular, is concerned about the compatibility of the future text with its national legislation, which does not include a set definition of a worker, EURACTIV has learned. Several member states fear the directive will pave the way for a third status in-between employee and self-employed. The French presidency is currently collecting the first written contributions from states while the working group is due to meet again next week.

Telecom

It’s not only Europe. Australian telecoms company Optus has jumped on the European bandwagon by calling on regulators to tackle “free-riding” service providers and ensure that they pay more for the bandwidth they use. Traffic growth is driven by these over-the-top (OTT) providers, a company executive said at the CommsDay Summit in Sydney, warning that by consuming more bandwidth than was needed by consumers for streaming, investment was being side-tracked. The call echoes a broader sentiment in Europe where demand for charges on OTT providers is growing.

Looking forward. Japan’s Beyond 5G Promotion Consortium and the European organisation 6G Smart Networks and Services Industry Association this week signed a Memorandum of Understanding on areas including a vision of and requirements on 6G, promoting cooperation between European and Japanese R&D organisations and industries and the identification of common interests and collaboration on harmonised standards.

Twin transitions

Ready to negotiate. The French presidency is expected to receive a mandate to launch interinstitutional negotiations on the EU’s Path to the Digital Decade, which will see the establishment of a governance framework to monitor member states’ progress on the Commission’s 2030 Digital Decade targets. France has made a number of changes to the original proposal since it took over the Council Presidency at the start of this year, with the end result being that the supervisory power of the Commission has been reduced in relation to that of national governments. Read more. 

 

What else we’re reading this week:

UK ministers ditch plans to empower tech regulator (FT)

Tech companies face a legal nightmare if Roe v. Wade is overturned (Protocol)

 

Laura Kabelka and Mathieu Pollet contributed to the reporting.





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