The new Commission’s tech agenda, inside the Council telecoms negotiations

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

“We must exploit our strengths in order to maintain or attain leadership in strategic technologies, to establish essential assets for technological sovereignty and resilience, and to foster commercialisation of deep tech innovation.”

– Ursula von der Leyen in her mission letter to the proposed Commission Executive Vice-President for Tech Sovereignty, Democracy, and Security Henna Virkkunen (Finland/EPP)

Story of the week: The incoming European Commission will face a heavy burden when it comes to tech, tasked with proposing 30 acts and initiatives, according to the mission letters published on Tuesday (17 September). Top EU officials are deeply concerned about Europe lagging in strategic technologies like artificial intelligence (AI). The two high-level reports by former Italian Prime Ministers Enrico Letta and Mario Draghi, published over the last few months, set the stage for these initiatives. The mission letters split tech policy among seven different commissioners. Some members of the European Parliament (MEPs) worry that this fragmentation could come in the way of delivering a coherent digital policy. Read more.

Don’t miss: An insider’s look at the Council negotiations on telecoms shows that member states are not convinced by Enrico Letta and Mario Draghi’s suggestions to deregulate the telecom sector, according to a working document dated Monday (16 September). Read more.

Also this week:

Breton’s resignation could mark a new chapter for EU digital policy
Intel halts plans for flagship factories in Germany, Poland amid financial woes
Tech sovereignty gets its executive vice-president in the new Commission
Top EU Court annuls a €1.49 billion fine on Google
Commission ends probe of Microsoft-Inflection AI merger
UN’s high-level advisory body wants international scientific AI panel
Hyperloop: from sci-fi to priority for next EU transport commissioner
Adult-content creators call for inclusion in AI policy talks
EU Commission demands Apple to align interoperability with digital competition rules
Draft Council conclusions aim to strike a balance with Letta, Draghi on telecom consolidation
European Parliament study: AI liability directive should cover general-purpose AI, expand to software

Staff changes

Welcome, Virkkunen! Finland’s Henna Virkkunen has been appointed as the European Commission’s next executive vice-president (EVP) for Tech Sovereignty, Security, and Democracy, signalling a shift in EU digital policy, European Commission President Ursula von der Leyen announced in a press conference on Tuesday. Virkkunen will oversee “digitalisation and digital infrastructure,” described by von der Leyen as “pre-conditions for being at the cutting edge of research and development,” adding that these are, in turn, key to Europe’s competitiveness globally. Read more.

The maze we have to work with. European Commission President Ursula von der Leyen’s proposal for the next College of Commissioners, announced on Tuesday, is to split the tech portfolio into a maze-like organogram. At a glance, Virkkunen sits atop the pyramid, but many of the pieces of the tech puzzle are split between at least five other EVPs and commissioners, leaving even the most experienced EU watchers disoriented. Read more.

Goodbye, Breton! The resignation on Monday of now-outgoing Internal Market Commissioner Thierry Breton, known as the key architect of the EU’s current digital agenda, is viewed by some as a chance to reshape what has often been criticised for being controversial. The Elysée Palace announced former Europe and foreign affairs minister Stéphane Séjourné (Renew Europe) as France’s new pick to join the College of Commissioners, later put forward as EVP for Prosperity and Industrial Strategy by von der Leyen. It was not over for X fights, however, with Breton making a pun about regulating on Mars in response to Elon Musk’s “bon voyage” post. Read more.

Artificial Intelligence

AI Liability Directive. A European Parliament Research Service (EPRS) study released on Thursday recommends that the AI Liability Directive (AILD) should be expanded into software liability regulation that includes general-purpose artificial intelligence (AI) products. “Next steps in the JURI committee [on Legal Affairs] will be decided in October,” said MEP Axel Voss (EPP, Germany), who leads work on the AILD at the committee, on Thursday. Read more.

UN wants an international scientific AI panel. The United Nations should take an active role in understanding the risks and sharing the benefits of Artificial Intelligence (AI) according to a long-awaited report from the High-Level Advisory Body on Artificial Intelligence to the UN, published on Thursday. “With its development in the hands of a few multinational companies in a few countries […] the imperative of global governance is irrefutable,” reads the press release and report. On the same day, the European Parliament announced that EP President Metsola and a delegation of 15 MEPs will be in New York on 20-24 September to attend the UN’s Summit of the Future. Read more.

The adult industry wants a say. The Digital Intimacy Coalition, advocating for privacy and sexual expression in digital spaces, launched a new initiative called Open Mind AI, submitting an open letter to the European Commission on Thursday, requesting representation in forthcoming AI policy discussions. People in the adult industry currently feel excluded from discussions around tech regulations, which also focus on Big Tech, including porn platforms. Read more.

LinkedIn’s AI training. On Wednesday, LinkedIn updated its privacy policy for European users to clarify that it does not use data from members in the EU, EEA, or Switzerland to train generative AI models. For non-EU users, a default setting automatically authorises this use, several users reported. The news comes after X suspended the processing of some personal data from EU users’ public posts to train AI models in August, and Meta halted plans to roll out AI in Europe, following a request from data protection authorities.

Big Tech on fragmented regulation. Fragmented regulation in the EU threatens Europe’s position in the AI era, risking a loss in innovation and competitiveness, according to a Meta-led open letter supported by 36 companies. Europe must adopt harmonised regulations to leverage AI benefits and maintain its competitive edge, the letter reads.

UK and US AI conferences in San Francisco. The US will host the first meeting of the international network of AI safety institutes in San Francisco on 20-21 November, the Biden administration announced on Wednesday. On 21-22 November the UK will host a conference on “Frontier AI safety frameworks”, organised by the UK AI Safety Institute and GovAI, a Thursday post on X and a call for papers on the UK AISIs homepage announced.

OpenAI mega round. Sam Altman’s tech darling is nearing closing a $6.5 billion round of investment, with investors waiting to find out if they will be let into tech’s most VIP party on Friday, Bloomberg reported on Thursday citing anonymous sources.

Competition

Top EU Court annuls Google fine. The European Union’s General Court annulled the Commission’s €1.49 billion fine on Google for anticompetitive behaviour with its AdSense product on Wednesday, leaving the Commission just over two months to appeal. The decision is a setback for the Commission, which fined Google €8 billion in three competition cases. Just last week, €2.42 billion was confirmed as a final decision. Read more.

Commission drops Inflection AI/Microsoft probe. The Commission will stop looking into whether Microsoft’s hiring of Inflection AI staff breached EU merger rules after seven EU countries dropped their requests for an investigation, the EU executive said in a press release on Wednesday. Read more.

Booking.com’s competition troubles. The Court of Justice of the EU (ECJ) ruled that Booking.com’s price parity clauses, which prevent hotels from offering lower rates elsewhere, are unnecessary and could reduce competition, in a Thursday judgement. These clauses are not deemed anti-competitive under EU law. Despite this, Germany’s antitrust watchdog has banned them, and the Digital Markets Act (DMA) prohibits such practices for large platforms.

MEPs on Apple ECJ ruling. MEPs called for stronger actions against multinational corporations’ tax practices, in reaction to the ECJ ruling that Apple has to pay €13 billion in taxes it avoided in Ireland. Some viewed it as a positive step but argued for tougher measures like minimum corporate tax rates, tax data exchanges, and competition law reforms. Others urged tax harmonisation and stricter measures against tax avoidance.

New course for competition policy. European companies need scale to compete globally, and EU merger rules will “evolve,” a newly appointed Commission EVP for a Clean, Just and Competitive Transition told the Financial Times in an interview published Thursday.

Cybersecurity

The curious pagers incident. On Tuesday, hundreds of Hezbollah pagers in Lebanon exploded almost simultaneously in a coordinated attack, reportedly by Israel’s Mossad and military, the AP reported. The pagers, made by a Taiwanese manufacturer and distributed through a Hungarian company, had hidden explosives detonated remotely. A Hungarian government spokesperson confirmed the distributor was a trading intermediary without operations in Hungary. The pagers were orchestrated by Israel through an “elaborate ruse,” The New York Times reported on Wednesday.

Data & Privacy

CoE guidelines. The Council of Europe released guidelines to protect personal data during voter registration and authentication, in a Wednesday post. The guidelines stress safeguarding sensitive data like biometric information, political opinions, and racial or ethnic origin.

The FTC looks at privacy. The US Federal Trade Commission (FTC) said that social media and video streaming services have engaged in “vast surveillance” of users with inadequate privacy controls and safeguards for minors, in a report released on Thursday. The FTC recommended limiting data retention and sharing, restricting targeted advertising, and strengthening protections for teens.

Digital Markets Act

Apple’s interoperability. The Commission will formally specify steps that Apple needs to take to comply with the DMA around its interoperability with other products, the EU executive announced on Thursday. These proceedings mark the first time the Commission is making use of this DMA tool. The announcement of the two “specification proceedings” came while MEPs in Strasbourg debated the historic European Court of Justice ruling on the Apple state aid case. Read more.

Digital Services Act

DSA debate. MEPs emphasised the importance of implementing the Digital Services Act (DSA) to protect users online, particularly children, and safeguard democratic integrity, during the Strasbourg plenary session on Tuesday. MEPs called for faster enforcement of the DSA, particularly in regulating online marketplaces, and stressed the need for greater collaboration between the Commission and national authorities to ensure effective implementation.

Industrial Strategy

Intel halts plan for flagship factories in Germany Poland. US chipmaker Intel has paused its planned new factories in Magdeburg, Germany and Wrocław, Poland, amid financial woes, in a blow to the EU efforts to build up domestic chipmaking capacity. Read more.

From sci-fi to priority. European Commission President Ursula von der Leyen has tasked her incoming transport commissioner with developing the hyperloop, but a recent test of the technology shows there is much to be done before it becomes the next high-speed transport mode. Although this transport system is still in the early stages of development, it was mentioned in von der Leyen’s mission letter to her pick for transport commissioner, the Greek Apostolos Tzitzikostas. Read more.

The debate around Galileo satellites launched from the US. European satellites were launched from Florida on 28 April and 18 September. MEP Christophe Grudler (Renew, France) said it is “unacceptable” that the Council and Commission did not consult the Parliament before authorising launches at the plenary on Thursday. MEPs’ authorisation is required for the launches, but the Parliament is instead “voting to authorise launches that have already taken place,” he said. The French The Left delegation (LFI) issued a press release calling this “an insult to the democratic process” and “endangering European sovereignty.”

Scale-up needs. In response to the Draghi report urging Europe to close its “innovation gap,” France Digitale and over 30 European partners released the Leading European Tech Scaleups (LETS) report on Wednesday, a list of 251 European tech companies generating at least €10 million in global annual turnover. Challenges such as market fragmentation within Europe and a lack of local tech IPOs need addressing to enhance growth, the report said. It calls for the next European Parliament and Commission to prioritise solutions for these issues.

The General Court reduces Qualcomm’s fine. The General Court of the ECJ reduced a fine the Commission had imposed on Qualcomm to € 238.7 million from € 242 million in a Thursday judgement. Back in 2019, the Commission found that Qualcomm abused its dominant position in the market for a type of telecoms chips, by selling them at a reduced price to Huawei and ZTE to eliminate its rival, Icera. Qualcomm appealed the decision. The court rejected all of Qualcomm’s arguments, barring the one about the calculation of the fine.

Law enforcement

Encryption problems still linger. On Monday, the Global Encryption Coalition’s Steering Committee expressed concerns over the 9 September compromise text on the online child sexual abuse material (CSAM) regulation proposed by the Hungarian Presidency. Despite changes like narrowing detection obligations to known CSAM and delaying evaluations for new detection technologies, the Coalition argues that mandatory scanning for encrypted messaging remains problematic because undermines end-to-end encryption, introduces security vulnerabilities, and jeopardizes digital rights and security for citizens, companies, and governments.

Ghost dismantled. On Wednesday, Europol, Eurojust, and global law enforcement agencies dismantled Ghost, an encrypted communication platform used by criminal networks for drug trafficking, money laundering, and organized crime. A coordinated effort across nine nations led to 51 arrests and the seizure of weapons, drugs, and over €1 million.

Platforms

Instagram for teens. Instagram is launching Teen Accounts in a bid to improve safety for young users and provide parents with greater control, Meta announced on Tuesday. Teens under 16 will need parental permission to relax these protections. Instagram will start transitioning teens to these accounts in phases, beginning with the US, UK, Canada, and Australia, with a global rollout planned for early 2024.

Meta vs. Russia. Meta late Monday said it is banning Russian state media outlets from its apps around the world due to “foreign interference activity.” The ban comes after the United States accused RT and employees of the state-run outlet of funnelling $10 million through shell entities to covertly fund influence campaigns on social media channels including TikTok, Instagram, X, and YouTube, according to an unsealed indictment.

Telecom

The Council draft aims to balance telecom consolidation with Letta and Draghi. The Hungarian Presidency of the Council of the EU is trying to reconcile member states’ hesitance with the eagerness for telecom sector consolidation as highlighted in the Letta and Draghi reports, according to draft Council conclusions dated Wednesday and seen by Euractiv. The compromise document is the first new draft, that integrates the views of member states. It will be discussed in a telecom Council working party next Tuesday. Read more.

A “European Alliance for Connectivity,” is the solution to foster innovation in the EU’s telecommunications sector, wrote global policy and government affairs director at Cisco Diane Mievis in a blog post on Thursday. Mievis suggests that such an alliance would “address the broadband needs of European” users and support the review of the telecoms rulebook and the move towards spectrum harmonisation.

Palau becomes 194th member of ITU. The UN’s telecommunications organisation, ITU, welcomed the Pacific Island nation as the 194th member of the organisation on Friday. As the country is vulnerable to climate change and disasters, ITU wishes to help the island state to “set up early-warning systems” and develop “emergency telecommunication plans.”

NVIDIA’s plans for telecom. AI chipmaker NVIDIA launched “a suite of accelerated computing software and hardware for designing, simulating, training and deploying AI radio access network technology (AI-RAN) for wireless networks in the AI era,” dubbed NVIDIA AI Aerial, according to a Wednesday press release.

What else we’re reading this week:

What Happens If TikTok Loses Its Fight Over Law Banning It in the US (Bloomberg)

How Israel Built a Modern-Day Trojan Horse: Exploding Pagers (The New York Times)

Inside Google’s 7-Year Mission to Give AI a Robot Body (Wired)

[Edited by Rajnish Singh]