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Digital Brief: Calls for biometrical ban, online marketplaces’ threat, Germany’s antitrust crusade

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

 

“Deploying remote biometric identification in publicly accessible spaces means the end of anonymity in those places. Applications such as live facial recognition interfere with fundamental rights and freedoms to such an extent that they may call into question the essence of these rights and freedoms.”

Andrea Jelinek, EDPB Chair, & Wojciech Wiewiórowski, EDPS

 

Story of the week: The European Data Protection Board (EDPB) and the European Data Protection Supervisor (EDPS) intervened in an unprecedented way in the ongoing AI policy debate on Monday. The EU privacy watchdogs called for a general ban on the use of AI for automated recognition of all human features, such as faces, voice and gait, in public spaces. The two data protection authorities also recommended the banning of AI biometric systems that cluster people based on ethnicity, gender, political or sexual orientation, and the restriction of emotional recognition tools to very limited cases.

The calls came in response to the European Commission proposal for harmonised rules on AI, the Artificial Intelligence Act. In the legislative proposal, the Commission included limits on the use of live facial recognition software in public spaces but stopped short of banning it altogether as it left room for exemptions (i.e. search of a kidnapped person or a fugitive). Campaign groups criticised the provision, arguing it might open the door for abuses and ‘biometric mass surveillance’.

What the EDPB and EDPS are advocating is a much broader ban, involving all human features and not just the face. The reasoning is that this technology cannot ensure compliance with the principles of proportionality and necessity, leading to unacceptable interference with fundamental rights. While the opinion is not binding, the two authorities are very influential since they will play a key role in enforcing the privacy provisions of the AI Act.

Luca Bertuzzi joined EURACTIV’s Yellow Room podcast this week to recap the discussion on AI and biometric recognition tools.

 

Don’t miss: Christine Schaldemose, rapporteur for the Digital Services Act (DSA), spoke to EURACTIV this week, as the legislation faced debate in the European Parliament on Monday (21 June). The Danish MEP described the proposal as “an opportunity to regulate tech giants in a way we haven’t done before”, and pointed to consumer protection as the area where she saw her main contribution to the proposal. In her view, online marketplaces are posing a threat to EU product safety law, and the DSA can provide a level playing field for EU and non-EU suppliers. She also opened the door for banning micro-targeting but referred to the opinion of the competent parliamentary committee in this regard. Read more.

 

Also this week:

  • Germany fears the DMA might loosen its antitrust grip on tech giants
  • The media sector sees the DSA as an opportunity to rebalance relations with online platforms
  • A ruling of the EU Court of Justice clarifies platforms’ liability for copyright infringements
  • Europe might lose €2 trillion by 2030 if uncertainty over data flows continues

 

Slovenia on the watchlist

 

 

DMA

Germany’s antitrust crusade. On Monday (21 June), Germany’s competition authority initiated a proceeding against Apple, making it the last of the GAFA companies – Google, Amazon and Facebook being the other three – to be investigated by the Bundeskartellamt. The probe will mainly focus on Apple’s creation of a “digital ecosystem around its iPhone that extends across several markets” and comes after an amendment was added to German competition legislation in January, enabling proactive intervention against large tech companies. This new law looks set to have a complicated relationship with the proposed Digital Markets Act (DMA), which German policymakers fear might provide for a less solid legal framework for countering anti-competitive practices. Read more.

Nuclear option. “In the most far-reaching situation where a gatekeeper has systematically been breaking the rules to strengthen its position, we could go all the way to break up the company,” said Margrethe Vestager, Executive Vice President of the European Commission for A Europe Fit for the Digital Age. The EU digital chief was referring to the ‘structural remedies’ contained in the DMA, which would provide an ultima ratio for splitting tech giants that repeatedly abuse their market position. Breaking up Big Tech is a debate that dates back several years, and Andreas Schwab, the DMA rapporteur in the EU parliament, was one of the key initiators. With the DMA, the European Commission seems to be getting real about it. After all, nuclear deterrence only exists if the other side is convinced you will press the button.

Watch your step. Sobering up from last week’s praising of the transatlantic alliance, the question remains to what lengths the United States will go to defend its tech companies. Although there is now a wave of bipartisan consensus on regulating Big Tech across the pond, Washington can hardly accept EU legislation tailored to only target American companies. Already last week, the White House warned Brussels not to pursue “protectionist” policies, to the point that Vestager tried to make the case that the DMA is not intended just for American companies. Only time will show if Europe’s new-found determination on antitrust policy will stand the test of US economic pressure.

Competition coordination. The heads of the EU’s national competition authorities have published a joint letter via the European Competition Network focusing on the enforcement of the proposed Digital Markets Act (DMA). The document calls for the experience and resources of national competition authorities to be utilised in the DMA’s implementation, with complementarity and cooperation between European and member-state level authorities. The Commission budgeted €50 mil for the administrative cost of the DMA, which made several experts doubt the Commission will be able to enforce the legislation on its own.

DSA

Online space for the media. The media sector is looking at the DSA as a way to rebalance its growing dependence on online platforms. Content moderation is a key concern, as private providers have been able to take down editorially approved content. The DSA is also set to redefine the liability of online platforms for copyright infringements, although the EU court cast on Tuesday a heavy shadow on the current wording (more on this below). Advertising provisions might also strike a chord at the heart of the media business model online. Read more.

Accountability measures. In an op-ed published on EURACTIV, four NGOs insisted on the need to keep risk assessment and audit requirements in the DSA. The open letter directly called on Patrick Breyer, Pirate MEP and opinion rapporteur of the Committee for Civil Liberties, Justice and Home Affairs (LIBE). The NGOs criticised the fact that in its draft opinion the German lawmaker deleted the risk assessment and audits requirements, which they deem are ‘two key accountability provisions’. The draft opinion proposes the replace the self-assessment and auditing provisions with corrective measures from public authorities subject to judicial review.

Don’t privatise law enforcement. In response, Breyer told EURACTIV that: “the Parliament’s intention is for independent public authorities to be in charge of tackling illegal content, and for providers to use a notice and action procedure. Mandating large platforms to periodically conduct a risk assessment and to mitigate risks would run counter the very idea of the liability exceptions and responsibility of public authorities by creating the impression that technical intermediaries are responsible for the actions of their users and should privately take law enforcement into their own hands.” The opinion still needs to be discussed in the LIBE committee.

Copyright

Copyright liability. A judgement from the European Court of Justice on Tuesday (22 June) on two German cases provided some insight into the liability of platforms when it comes to responsibility for copyright infringements. The ruling clarified that online platforms are exempt from liability for the illegally-posted content they host, as long as they aren’t actively contributing to making it available. The proposed Digital Services Act has altered existing wording on copyright exemptions, but this week’s verdict suggests that this is unlikely to alter their application. The ruling might also influence the application of the automated content recognition tools (what campaign groups call ‘upload filters’) mentioned in the Guidance to the Copyright Directive. Read more.

A solution for neighbouring rights? Google told French senators on Wednesday (23 June) that it is working on a “solution” to the issue of neighbouring rights for press agencies and publishers. These rights were introduced in a 2019 transposition of the EU directive on copyright. In April 2020 Google removed from its search engine and Google News any articles, videos and photographs it would have otherwise had to pay publishers for, to comply with the law. It took until January 2021 for Google and the French publishers’ organisation to reach an agreement on the matter, and many in the press publishing sector remain dissatisfied with the terms. Read more.

Data

The weight of data. According to a study commissioned by trade association DIGITALEUROPE, restricting cross-border data transfers might cost Europe as much as €2 trillion by 2030, more or less the size of Italy’s economy. The worst-hit industry would be manufacturing, with a €60 bn loss in exports, while sectors like culture, finance, tech and telecoms would also see a 10% drop in foreign revenues. The industry representatives call for a global agreement on data flows in the context of the eCommerce negotiations taking place within the World Trade Organisation (WTO). Read more.

Industrial strategy

Reality check. Commissioner Mariya Gabriel called for a more pragmatic approach to EU innovation policy, saying that Europe is not going to create its own version of Google or Facebook. Instead of trying to imitate Silicon Valley, the European Commissioner for Innovation insisted Europe needs to make use of its competitive advantages, particularly as a leader in green technology. The invitation was probably prompted by Qwant, the Franco-German attempt to create a ‘European Google’ that has recently been financially rescued with €8 mil by Chinese firm Huawei.

Tech made in Europe. Investments in the European tech sector are growing, and unicorns are seeing the light at a growing pace. France, in particular, has already set its ambitious target and French start-ups are leading the way in scaling up to unicorns. Europe’s tech leaders joined policymakers on Monday (21 June) to discuss the startup landscape and tech ecosystem in Europe, as well as the role of public policy in facilitating entrepreneurship.

Who innovates the most. This week also saw the release of the European Innovation Scoreboard 2021. This year’s top innovator is still Sweden, followed by Finland, Denmark and Belgium. The report highlights growing convergence across the EU, as Europe’s South and East have also seen an improvement in performance. At the global level, the EU reportedly outpaced competitors such as China, Brazil and India, but remains behind the US, Japan, South Korea and Australia.

Contrasting trends in the chip industry. The global chip shortage is starting to be felt by consumers, as the prices of products such as laptops climb. The industry has been struggling to meet the demand for months now, and there are concerns that the shortfall could stretch years into the future. However, 3D chip packaging, a much more compact and energy-efficient version of its 2D counterpart, is advancing rapidly, with the world-leading Taiwan Semiconductor Manufacturing Company teaming up with Japanese researchers and suppliers to work on the technology.

Cloud expansion in China. Microsoft is considering expanding its cloud business in China by adding four new data centres by 2022, in addition to the one announced in March of this year. The tech heavyweight already has six data centres in the country, and the expansion plans are part of wider efforts to expand service capacity across Asia as demand for cloud services grows.

Media

Hong Kong loses its voice. The final edition of Apple Daily, Hong Kong’s largest pro-democracy newspaper, was published on Thursday (24 June). The paper was forced to close on Wednesday, a week after its offices were raided by police and members of its staff, including the editor-in-chief, arrested over allegations that its reporting had breached a controversial national security law. The European External Action Service issued a statement saying that the closure “clearly shows how the National Security Law imposed by Beijing is being used to stifle freedom of the press and the free expression of opinions.” On Thursday, pre-dawn queues stretched for hundreds of meters as people scrambled to buy a copy of the final issue.

Brexit hits British programming. The EU plans to cut the amount of British TV and film shown in Europe after Brexit, described as “disproportionate”, according to a leaked document seen by the Guardian. The EU’s Audiovisual Media Services Directive sets out quotas for the quantity of “European works” that must be available on TV and streaming services. While British works still fall under this label, the European Commission has been tasked with reviewing the risk of this to Europe’s “cultural diversity”, signalling a potential change in status for UK content.

The right to be forgotten. The European Court of Human Rights ordered Belgium’s Le Soir newspaper to anonymise the identity of a driver responsible for a deadly 1994 road accident in its electronic records. The Court weighed the freedom of expression of the paper’s publisher against the individual’s right to be forgotten, siding with the latter. The ruling noted that an internet search of the individual’s name immediately returned Le Soir’s article and that to keep it online could cause serious harm to the driver’s reputation, giving them a “virtual criminal record.”

Prizing journalists. Tuesday (22 June) saw the launch of the Daphne Caruana Galizia Prize for Journalism by the European Parliament. The prize, which will be awarded annually, is named in honour of the Maltese investigative journalist assassinated in 2017. It will be awarded to journalists for their work “promoting or defending the core principles and values of the European Union, such as human dignity, freedom, democracy, equality, rule of law and human rights.”

UMG goes its own way. The decision by French media conglomerate Vivendi to spin-off Universal Music Group (UMG) into a separate company has drawn high support from shareholders, 99% of whom voted in favour of the move. Vivendi will list UMG, worth €33 billion, in the autumn, opening the doors for 60% of the business to be distributed to shareholders. The hive-off is a victory for Vincent Bolloré, Vivendi’s controlling shareholder, but wasn’t without opposition from certain investors who opposed the terms of the deal but stopped short of calling for it to be blocked.

Cybersecurity

Shields up. On Wednesday (23 June), the European Commission set out plans for a Joint Cyber Unit to deal with evolving cyberthreats and coordinate EU-wide responses to them. The aim is to create a cybersecurity shield that will identify the threats before they hit. The creation of such a unit has been on Commission President Ursula von der Leyen’s agenda since 2019 and should become fully operational in 2023. Serious cyberattacks against key targets in Europe more than doubled between 2019 and 2020. Read more.

Transatlantic cooperation. Officials from both sides of the Atlantic gathered in Lisbon this week for an EU-US Ministerial Meeting on Justice and Home Affairs. Among the issues discussed was the recent approval of the draft text of the Second Additional Protocol of the Budapest Convention (or the Convention on Cybercrime). Both parties also committed to continuing their cooperation on a potential future UN legal instrument on cybercrime.

Taming cyber conflicts. Leading legal experts have begun a project to develop a manual on the laws of international cyber conflicts. The NATO-sponsored document will be the third of its kind and is set for publication in 2026, nine years on from its last update. While not legally binding, the manual is intended to set clearer boundaries on, and reduce the potential for escalation in, hacking conflicts.

Artificial Intelligence

AI Principles. The OECD has published its first review of the implementation status of the policy recommendations it put forward in its Principles on AI, published in May 2019. The report finds variation between countries in terms of both the design and implementation of AI policies, and allocation of funding for AI R&D. It also offers practical recommendations for implementing its principles and advises cross-border and multi-sectoral cooperation on AI.

The geopolitics of AI. A paper commissioned by the European Parliament’s Special Committee on Artificial Intelligence in a Digital Age cautioned that the impact of AI on global politics and the global balance of power is an area that has largely been ignored and encouraged greater attention to it in future, including through the creation of a European Security Commission on AI. Similarly, a working paper published by the committee following its April hearing with the Special Committee on Foreign Interference in the European Union including Disinformation examined the impact of AI on democratic processes. Both documents advised greater EU-US cooperation to shape the future of AI.

5G

Not welcome. On Tuesday (22 June), a Swedish court upheld a ban on using Huawei equipment in the country’s 5G-network infrastructure. In October, the country’s telecom regulator banned Huawei from supplying Swedish mobile companies with 5G equipment, citing security concerns. The upholding of the ban is a setback for Huawei’s aspirations in Europe and raises the possibility of retaliation by China against tech company and 5G rival Ericsson.

Space race

Reaching for the stars. Tuesday (22 June) saw the official launch of the EU’s new space programme, with nearly €9 billion allocated for the European Space Agency (ESA) and industry up to 2027. The Director-General of the ESA, Josef Aschbacher, spoke with EURACTIV about the role that Europe can play in the sustainability and regulation of space moving forward. Read more.

The space race moves forward. China launched three astronauts into space this week on the Shenzhou-12 spacecraft. The crew docked at China’s new space station, which is still under construction, and will remain in orbit for three months, conducting two long-duration spacewalks. The station, named Tiangong or “Heavenly Palace”, is intended to be completed by the end of 2022. Russia is also taking strides in space; earlier this year it announced a partnership with China to develop a lunar research station and plans to launch a “nuclear-powered space tug” in 2030. According to NASA, nuclear-powered spacecraft could cut the length of a round-trip to Mars by a year.

 

What else I’m reading this week:

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