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EU Policy Update - April 2019

2019-05-07 EU Policy Updates

In a nutshell: The European Parliament concluded the last plenary session of its 8th term on 18th April. The Parliament will resume in its new composition after the European elections (23-26 May). Before concluding its term, the LIBE committee issued two Working Documents on e-Evidence and finalised its position on TERREG. EU ministers have signed off the Copyright Directive. The European Commissioner for Competition Margrethe Vestager's special advisers identified challenges for future policy-making for competition in digital economy. The European Data Protection Supervisor issued its opinion on the possible EU-US deal on e-Evidence. European Court of Justice Advocate General released its opinion on the nature of Airbnb service.

E-evidence

LIBE identified further concerns with the e-Evidence proposal

Two more working documents were issued by the European Parliament's leading committee on the e-Evidence proposal – the Committee on Civil Liberties, Justice and Home Affairs (LIBE).

6th Working Document

The 6th Working Document (consisting of three parts: A, B, C) deals with questions related to safeguarding the fundamental right to a fair trial of data subjects and third parties. For example, orders to issue electronic data to law enforcement authorities will result in an incidental collection of data of people with whom the suspect/accused has communicated, and this data might not be necessarily relevant for on-going investigations. This also concerns the possibility for law enforcement authorities to misuse the e-Evidence instrument and to benefit from illegally-obtained electronic evidence. New rules for the inadmissibility of such evidence must be introduced, according to the 6th Working Document. The Working Document also criticises the European Commission's interpretation of human rights law and rejects the European Commission's statement on the so-called "right to security" that is used to justify the measures proposed in the e-Evidence proposal, while there is no legally-established "right to security" under any European human rights instruments.

7th Working Document

The 7th Working Document deals with proposed sanctions for service providers when they fail to comply with the proposed rules. It identifies the shortcomings of the proposed sanctions regime, as it might result in "forumshopping" by non-EU service providers, who could choose to appoint legal representatives in the member state with the lowest sanctions. The Working Document also identifies further concerns with the proposed deadlines for executing law enforcement orders for SMEs and non-EU service providers operating in different time-zones. It also questions whether the task of guaranteeing fundamental rights protection, until now a sovereign prerogative of state authorities, should be transferred to the service providers.

EDPS issued an opinion on the negotiating mandate of an EU-US agreement on e-Evidence

On 5 February, the European Commission adopted a recommendation for the EU Council decision to authorise the opening of negotiations on an international agreement between the EU and US on cross-border access to electronic evidence. While the European Commission expects the approval of a negotiating mandate by the EU Council in June, the European Data Protection Supervisor has issued an opinion on the matter. While assessing the procedural basis, as well as lacking substantive basis, for allowing data transfers to third countries in the EC recommendation, the EDPS reiterated its earlier opinion on the on-going e-Evidence reform in the EU that found no justification to oblige service providers to produce content data without any involvement of competent authorities of the Member State where the data subject is. Furthermore, the EDPS recommends including the obligation for EU and US competent authorities to systematically involve judicial authorities as early as possible in the process of gathering electronic evidence. The EDPS also outlined the need to clearly define different types of data ("content" and "non-content"), highlighting that traffic and location data (falling under "non-content" data) can be considered "sensitive". Furthermore, according to the EDPS, the transfer of such data can only be justified by "fighting serious crime".

Intermediary liability

The European Parliament finalised its position on TERREG

The Committee on Civil Liberties, Justice and Home Affairs (LIBE) that is responsible for the European Parliament's main position on the proposal for a regulation on preventing the dissemination of terrorist content online (TERREG) adopted its Report on 8 April. The European Parliament's main position explicitly excludes services other than at the application layer, cloud service providers and electronic communications services from the scope of the Regulation that obliges hosting service providers to remove terrorist content in the originally-proposed 1-hour deadline. According to the European Commission's Proposal, and reiterated in the European Parliament's Report, hosting service providers shall treat referrals made by Europol, alerting them of information that may be considered terrorist content, as a matter of priority and provide swift feedback on action taken. However, the ultimate decision on whether something is against their terms of service remains with the hosting provider in the case of such alerts made by Europol. The European Parliament prolonged the deadline for executing removal orders by competent authorities to 8 hours. In case of microenterprises, the deadline shall be no sooner than the end of the next working day, according to the Report. The next European Parliament will start negotiations with national governments after the EU elections.

Copyright Directive gets a green light from the EU ministers

EU ministers approved the Copyright Directive on 15 April in the EU Council. Italy, Finland, Luxembourg, the Netherlands, Poland and Sweden voted against, while Belgium, Estonia and Slovenia abstained. In a Joint statement, the aforementioned countries which voted against the agreed text expressed their regret that the Directive does not strike the right balance between the protection of rightsholders and the interests of EU citizens and companies, and will lead to legal uncertainty for many stakeholders concerned. Estonia considered that the final text of the Directive does not strike a sufficient balance between different interests in all aspects. Germany which voted for the reform did express its regret that it was impossible to agree on a concept of platform responsibility that could be supported by all parties. Germany has called for the uniform implementation of Article 17 (formerly Article 13, "upload filters") across Member States. Following the signature and publication of the directive in the Official journal of the EU, Member States will have 24 months to transpose the new rules into their national law.

UK asks feedback on its Online Harms White Paper

The United Kingdom government’s Department for Digital, Culture, Media and Sport has published its White Paper on Online Harms that outlines a proposal for the future legislative changes for online service providers to address illegal and harmful content online more effectively. The White Paper envisages the introduction of a "duty of care", requiring online service providers to take greater responsibility for the removal of illegal and other harmful content on their services. The regulator will be equipped to come up with appropriate codes of practice for companies to follow. Possible measures to enforce this include implementing codes of practice with the possibility of blocking the Internet Service Provider (ISP) of non-compliant websites and apps following the decision of an independent regulator alone. The White Paper recognises that the ISP blocking measure is a contentious one, however, it is also recognised that such a measure "could have sufficient impact to act as a powerful deterrent". The White Paper is open for feedback from the public until 1 July 2019. The UK government will then evaluate the responses and publish the government's response to the consultation. Following the publication of the government response, the legislation will be brought forward when parliamentary time allows.

European Court of Justice: Advocate General released its opinion in the Airbnb case

The European Court of Justice (ECJ) is requested by the investigating judge of the Tribunal de grande instance de Paris (Regional Court, Paris, France) to determine whether a service consisting in connecting hosts with accommodation to rent with persons seeking that type of accommodation corresponds to the definition of ‘information society service’ and thus benefits from the free movement of services, as guaranteed by Directive 2000/31 (e-Commerce Directive). Advocate General Szpunar released an (non-binding) opinion on 30 April stating that unlike Uber in Uber France (C‑320/16), Airbnb can be considered as an 'information society service'. According to the Advocate General, the main difference from the Uber France case is that Airbnb has no effective control over essential procedures of the provision of accommodation service, while Uber exercises such control by determining the maximum fare of the ride and overseeing the quality of the vehicles and their drivers.

Competition

Vestager's competition report on platforms

The European Commissioner for Competition Margrethe Vestager's Special Advisers have published a report on future challenges of digitisation for competition policy. The report, published at the beginning of April, analyses the place and power of dominant "platforms" (in its wider term, including for example operating systems) and the challenges of the digital economy for EU competition rules. Some of the conclusions made by three scholars in the fields of law, economics and engineering can be summarised as follows: 1) the digital economy poses challenges to traditional competition due to its fast-pace and diversification. As such, any regulation organising the whole sector (like in traditional public utilities) is inappropriate. 2) Dominant platforms have a responsibility to ensure they regulate themselves in a pro-competitive way. 3) Dominant platforms should be subject to a duty to ensure their interoperability with suppliers of complementary services. 4) No drastic changes are needed for existing competition law, beyond an increased transparency regime and an ad hoc regulatory response to issues that arise continuously (e.g. Interoperability).

Outside the EU bubble

Election corner

On 29 April, five leading candidates in the bid to become the next European Commission president (the so-called Spitzenkandidaten) participated in a public debate highlighting their political priorities as head of the European Commission. The Greens' Bas Eickhout, the Socialists' Frans Timmermans, Violeta Tomić of the Party of the European Left, Guy Verhofstadt for the Alliance of Liberals and Democrats and Jan Zahradil of the Alliance of Conservatives and Reformists in Europe. For this elections-special corner, we look into candidates’ statements during the debate when it comes to the EU's digital agenda:

  • Jan Zahradil stressed that the "European Commission should not act as a government of Europe" and instead it should assist Member States. He praised the Digital Single Market (DSM) and the legislation adopted under the auspices of it. On disinformation and its regulation, he stressed the risk of hampering freedom of expression. Rather than coming up with more legislation, the next Commission should reflect on the implementation of legislation that has been adopted under the DSM and regulate where strictly necessary. On the issues of taxation, Zahradil does not support an EU-wide "digital tax", that in his opinion should remain for Member States to decide over and regulate.
  • Guy Verhofstadt stressed the need for a single "EU regulator". In order to create European Facebook(s), the EU should follow its own European model of a strong regulation that does not rely on Big Tech's self-regulation pleas. On disinformation, Verhofstadt stressed the need to regulate algorithms that are used by social media to judge the content as soon as possible.
  • Violeta Tomić stressed the need to tax the GAFA (Google, Amazon, Facebook, Apple) in all countries they operate in and to abolish tax havens for Big Tech. In her opinion, new jobs will be created from green innovation and energy. The scale of disinformation online should be measured in order to tackle hate speech online.
  • Bas Eickhout highlighted the dangers posed by "data monopolists" that need to be regulated. Instead on monetising data, they should focus on delivering their service. The power of the EU lies in strong privacy regulation like GDPR. On taxation, the EU is lacking power, as without common rules on taxation, Member States are competing to provide the most favourable tax conditions for data monopolists. In order to tackle disinformation, more transparency needs to be introduced when it comes to business advertisement and social media revenues. According to Eickhout, politicians are not equipped to decide what is "fake" and what is not online.
  • Frans Timmermans stressed the urgency to ensure that people's data remains "theirs". Big Tech needs to adhere to common taxation rules across the EU. According to Timmermans, a minimum tax of 18% should be introduced for corporations across the EU. More regulation should be introduced to tackle disinformation. While traditional media is liable for delivering "fake news", platforms should not be treated differently. He also voiced his support for 5G in Europe, that in his view will also have a positive effect on the carbon footprint in the EU.