Telcos vs Big Tech, Breton’s future

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“Specific requirements […] still constitute regulatory discrepancies between us and communication services provided by US Big Tech.”

– said Paolo Grassia, senior director of public policy at ETNO to Euractiv.

Story of the week: The European Telecommunications Network Operators’ Association (ETNO), an industry group comprising the largest telecom operators in the EU, called for a level playing field with US Big Tech in a position paper. In answer to a Commission’s telecommunications public consultation ending on Sunday. The seemingly innocuous phrase represents a strong position in a heated debate over the future of Europe’s connectivity infrastructure. Read more. 

Don’t miss: French President Emmanuel Macron will nominate Thierry Breton for the European Commission, angling for an expanded portfolio around economic security and defence, reported in Le Monde on Thursday 27 June. However, the nomination of Breton, currently Commissioner for Internal Market, could be challenged later in the summer, as Macron’s grip on power is in jeopardy. The nominations are to be decided by the end of August, at which point the new Commission President, can start assigning portfolios. Read more. 

Also this week: 

• EIB launches new programme to support strategic technologies 
• Apple halts rollout of features in EU due to ‘regulatory uncertainties’ 
• EU Commission accuses Apple App store of violating digital competition rules 
• EU Commission accuses Microsoft of breaking antitrust rules with bundled Teams app 
• Sovereignty requirements for cloud providers unlikely to make it to Commission’s proposal for implementing act 
• US Big Tech lobby challenges EU Commission’s telecoms ‘investment gap’
• EU officials pitch EU space law as a competitiveness driver 

Artificial Intelligence 

Civil society calls for independence in AI national regulators. A group of over 30 civil society organisations, including consumer association BEUC, said the Commission should clarify to member states that national authorities enforcing the AI Act should be independent. The organisations drew attention to Denmark’s and Italy’s appointments of authorities as questionable examples, in an open letter on Tuesday.  

French watchdog urges EU to regulate generative AI services available on cloud. The French competition authority issued on Friday an opinion on the state of the artificial intelligence market, calling on the Commission to designate companies providing Model as a Service (MaaS) providers as gatekeepers under the Digital Markets Act. MaaS are generative AI tools available in the cloud. It further suggests the Commission to request for minority participations of big companies in the AI market. 

US AI sound recording copyrights infringements. The Recording Industry Association of America announced on Monday it filed two copyright infringements cases in front of Boston and New York Federal Courts against artificial intelligence startups Suno and Udio for alleged “mass infringement of copyrighted sound recordings copied and exploited without permission.” 

Competition 

Vestager on Apple AI. Apple’s move to roll back its AI plans in Europe is the most “stunning, open declaration that they know 100% that this is another way of disabling competition where they have a stronghold already,” Margrethe Vestager, the Commission’s vice president for a Europe fit for the digital age and Commissioner for Competition, told a Forum Europa event. Apple said last Friday it wouldn’t launch its homegrown Ai features in the EU, citing regulatory uncertainties cause by competition rules as well as security concerns around interoperability requirements. 

Commission “fitness check.”  The Commission said that some complex areas of consumer protection law still pose challenges in the digital age, such as penalties for infringements, consumer remedies, and fake reviews. Most of the 2019 directive “on better enforcement and modernisation of consumer protection rules” has been correctly transposed into national laws, but there is still diverse implementation, said the Commission in a report.  

Cybersecurity 

New names on sanctions list. The EU sanctioned six individuals for cyberattacks on critical infrastructure and essential services in member states and Ukraine, according to a Monday press release by the European Council. The EU’s cyber sanctions regime has now targeted 14 individuals and four entities. 

Cloud attacks. Cloud resources are now the primary targets for cyberattacks, said French multinational company Thales, in a study published on Tuesday. Despite increased risks, data encryption remains low, with less than 10% of enterprises encrypting most of their sensitive cloud data. 

Microsoft’s cyber troubles. Earlier this year, Russian hackers infiltrated Microsoft’s systems, accessing staff and customer emails, Reuters reported on Friday. Microsoft is now notifying affected customers and sharing compromised emails but has not specified the number of impacted customers or stolen emails. The company previously stated that a small percentage of corporate email accounts were affected and is now working on improving security practices. 

NIS2 feedback open. The European Commission initiated a feedback process on Thursday for the draft implementing act under the NIS2 Directive, which aims to ensure a high level of cybersecurity across the EU. The NIS2 Directive now includes medium and large entities from critical sectors. The implementing act is set to be adopted by 17 October, outlining the technical and methodological requirements for cybersecurity risk management for entities in digital infrastructures, digital providers, and ICT service management.  

Hungary’s Apple problems. On Wednesday, Apple made unauthorised charges to the bank cards of numerous Hungarian users, deducting amounts for various subscriptions or previous purchases, Hungarian media reported. The company withdrew payments through devices linked to users’ Apple IDs. It is unclear how and why the error happened in Hungary, which affected several banks, also including Revolut. 

Data & Privacy 

No sovereignty in EUCS. Sovereignty requirements will almost certainly not be included in an EU cloud certification scheme (EUCS), expected to be wrapped up by the end of 2024, a source close to the matter told Euractiv. The matter was scrapped from the agenda of the 18 June meeting of the European Cybersecurity Certification Group (ECCG), comprising member states’ cybersecurity authorities under the wing of the Commission. Another source familiar with the matter explained that member states expected guidance from the European Commission on how such requirements could be put in place outside the EU-wide scheme, which is why the agenda item was discarded. Read more. 

Digital diplomacy 

Germany and China on data flows. Berlin’s Digital Ministry and China’s Cyberspace Administration of China signed an agreement to improve dialogue with a view to enhance cooperation on cross-border data flows, according to a Wednesday press release.   

Digital Markets Act 

Apple’s DMA breach. The European Commission said Apple’s App Store is in breach of the bloc’s digital competition rules in preliminary findings announced in a press release, on Monday. If the findings are confirmed, the Commission can declare Apple violating the DMA by March 25, 2025, one year after it started its investigation. The EU executive also launched a new investigation into Apple over its new contract terms for third-party developers and app stores, including a “Core Technology Fee,” introduced in May. This requires third-party app developers and app stores to pay for using key Apple services. Read more. 

Don’t bundle up. Microsoft violated EU antitrust rules by bundling its Teams app with its Office 365 and Microsoft 365 productivity suites, the Commission said on Tuesday Read more. 

Industrial strategy 

Atos third restructuring proposal fails. The third serious restructuring proposition of €10 billion turnover French company failed, announced Atos on Thursday. This brings back the possibility of an agreement with Czech billionaire Daniel Křetínský. The agreement to sell sovereign interests, military and cybersecurity systems, to the French State was approved on Tuesday and would be signed on Thursday, Atos said. 

Law enforcement 

Denmark’s online child protection. The Danish government and several children’s organisations have formed an alliance to combat the addictive design and harmful business practices of social media platforms, Euronews reported on Wednesday.  

Telecom 

Dispelling the EU space law mystery. In a bid to cast the upcoming EU space law in a favourable light, Commission officials pitched it as a competitiveness driver for the continent’s industry during the European Space Forum in Brussels on Monday and Tuesday. The officials tried their best to quench the industry’s thirst for details on the space law, which has been two years in the making, with a draft the Commission has now postponed twice. It is still not known when the Commission will table the EU space law. Read more. 

EU leaders pledge to deepen the single market in telecommunications. EU leaders agreed on Thursday on a pledge to further deepen the single market in three key areas: energy, finance and telecommunications. in line with April Enrico Letta’s suggestions. 

Big Tech doesn’t want telecoms regulation. US lobby organisation CCIA Europe, which represents Amazon, Google, and Meta, among others, disapproved the suggested extension of the European Electronics Communication Code to cloud providers in their position paper replying to the Commission’s public consultation on the future of telecoms. They casted doubts on the European Commission’s claim of an investment gap of at least €174 billion to meet Europe’s 2030 connectivity targets. The BSA, a lobby for software providers like IBM and Salesforce, also advised against expanding the scope of the EECC. Read more. 

Association of competitive telcos ECTA repeats call against deregulatory measures. In their own answer to the public consultation, lobby association ECTA explained that there is no sound evidence of a poor state of the European telecommunications market and that there was therefore no need for deregulatory measures. Read more. 

GSMA wants to include telecoms investment in EU green taxonomy. The Commission should include telecoms investments in its taxonomy for green investment, wrote global lobby of mobile operators worldwide GSMA, echoes a position which GSMA took in earlier this year in their industry manifesto for Europe: that telecoms are enablers of Europe’s green transition. 

France to nationalise strategic submarine cable company. Finnish company Nokia announced on Thursday it entered into a €350 million agreement with the French state to sell 80% of Alcatel Submarine Networks to the French Agency APE. The Alcatel subsidiary designs, produces, deploys and maintains subsea cables. It employs 2,000 people, with almost 70% in France. Nokia should retain 20% of the shares, with the possibility for the French State to complete the subsidiary’s nationalisation. 

What else we’re reading this week: 

The U.S. Government’s Kaspersky Ban Sets an Ugly Precedent (Bloomberg) 

‘So far we’ve just been lucky’: Maritime security expert warns of Russian risks in North Sea (Follow the Money) 

What the Arrival of A.I. Phones and Computers Means for Our Data (The New York Times) 

[Edited by Rajnish Singh]

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