Competition, coin mining and plastic memories: why the EU should watch the Web Summit carefully

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by Tiago Cabral, member of CEDU

After the overall success of the 2016 edition – with a few exceptions like the failing Wi-Fi[i]– Lisbon hosted for the second time “the largest tech conference in the world”. We are obviously referring to this year’s edition of Web Summit which brought about 60.000 attendees from more than 170 countries to the Portuguese capital. This event is obviously significant to the Portuguese economy with an investment of about 1.3 Million Euros originating an expected return of about 300 Million. But there is more to Web Summit than the number of attendees or its effect on the Portuguese economy (even if both are relevant), it offers a look into the future and the future brings a plethora of complicated legal and political challenges. Some of these challenges demand a supranational response and the EU should watch very carefully the trends coming out of Lisbon. In the following paragraphs, we shall highlight a few topics to illustrate.

1. “The Digital Single Market has become a new political and constitutional calling for the EU” and it cannot work in the absence of healthy competition. The European Commissioner for Competition’s “clearing the path for innovation” speech[ii] (7th November) – even if its content or delivery certainly did not impress us – made clear how seriously the Commission is taking this issue. American Tech Giants dominate the EU’s market and without proper competition enforcement, European companies may fall prey to anti-competitive behaviour before they have the chance to get a foothold. The speech also made a few interesting points about the growing importance of big data in competition and about trust in competition. However, it had a rather uncomfortable “Google paranoia” emanating from it. The 2.42€ billion fine against Google for breaching EU antitrust rules was historic – whether or not we agree with it –, but so were, for example, Microsoft v. Commission (2007) and the 561€ million fine against Microsoft (2013) for non-compliance with browser choice commitments. Yet, by name the Commissioner only referred to Google. There was a reference to the issue of special tax treatment, which immediately brings the controversies with Apple and Amazon[iii] to mind, but the companies were not named. Since there was no time to properly explain the details of the referred antitrust proceeding – or of the other two ongoing antitrust proceedings against Google, regarding AdSense and Android – the speech did nothing to further inform the audience on this issue and only left the feeling that there is a fixation on Google in the Commission. Interestingly, the 6th November intervention by the Commissioner where she was interviewed by Kara Swisher suffers no such issues. The interviewer asked the right questions, what companies are breaking the rules, what is the Commission’s reaction and what are the consequences. There was no singling out of a company with references to Google, Amazon, Apple and Facebook, no attempts to explain the complicated reasoning behind the proceedings in a few short minutes, the comparisons to the US also added value to the interview.


2. Robots and AI were certainly a central theme in this year’s Web Summit with the debate between robots Sophia and Einstein beating François Hollande’s intervention, at least in audience’s engagement. According to a 2013 Oxford study, automation might reach around 47 percent of professions in the United States in the next decade or two[iv]. The bank of England estimates that about 15 million jobs in the UK could be at risk of automation (i.e., being replaced by robots). In fact, if the reader wishes to start making preparations for the future, there is a rather convenient website, that using Oxford’s data, offers a searchable database where it is possible to find the probability of automation for each of the 702 occupations analysed in the original study. There will not be an “employment apocalypse”, but technology is knocking at the door and some substantial changes will happen shortly. Still, the issue does not stop with automation in the workplace, there is the issue of autonomous cars and even of sexual relationships with robots[v]. Recently MPE’s called EU-wide liability rules to “to enforce ethical standards or establish liability for accidents involving driverless cars” looking at how fast the technology is progressing it is already past time to start seriously debating it, if the UE does not wish to fall further behind other superpowers like the US.

3. We shall briefly address two more subjects: fake news and virtual currencies. The first became widely discussed after the Brexit Referendum and the 2016 American Presidential Election, and is still a hot topic in the U.S[vi]. However, the issue is not restricted to the UK and the US, it arose, to a lesser extent, in both the French Presidential election and the German federal election. This is one of the cases where the EU was already ahead of the curve because the External Action Service’s StratCom Task Force has been working to “challenge Russia’s ongoing disinformation campaigns” since 2015. Recently they launched the “EU vs Disinfo” incorporating news on the issue and the latest examples of disinformation. Furthermore, in the coming months the Commission plans to “launch a public consultation to gather the views of a wide range of stakeholders on fake news, organise a multi-stakeholder Conference on Fake News to define the boundaries of the problem, assess the effectiveness of the solutions already put in place by social media platforms and to agree on key principles for further action and set up a High Level Group”. A few interventions at Web Summit also address the question like “How to Prevent Cyberwar”, “How do we move from fake news?”, “Do tech companies have too much influence over the news?” and “What I know about You and the Media”. Regarding virtual currencies there are already proposals to replace the Framework Decision 2001/413/JHA with a new Directive on combating fraud and counterfeiting of non-cash means of payment, and to amend the 4th money laundering Directive (Directive 2015/849/EU) to adapt the Union’s legal framework to new realities of virtual and cryptocurrencies. The issue was addressed in the interventions like “cryptocurrencies: A bubble is only the beginning”, “cryptocurrency: Bubble or here to stay?”, “Cryptocurrencies 101: Bitcoin, Ethereum and everything you need to know”, “ICOs: The new funding round”; “ICO – hype or revolution?” and “Digital currency and the ICO: The VCs’ cut”.

4. It is impossible to cover every single relevant topic in this short essay. Likewise, the 20ish minute interventions at Web Summit only scratch the surface of very complex subjects. Nevertheless, it is highly useful to understand in what direction the Tech current is flowing because fighting against it is generally counterproductive and often results in drowning. States by themselves might face an impossible task when trying to regulate large Tech companies or borderless and complex technological problems. Even for the EU finding technologically viable solutions that protect its citizens, market and democratic integrity without curbing innovation is certainly complicated. Identifying the issues, promoting the debate between stakeholders and European Institutions, and raising the citizen’s awareness to both the issues and the EU’s efforts to solve them are all crucial steps in overcoming this challenge. Incidentally, Web Summit contributes enormously to each of these steps and, let us hope, also to the economic and legal evolution of the EU.

[i] On a related note, slow internet connections might be bad for our health, increasing stress levels.

[ii] You might also find the written version in this link.

[iii] The Commission considered that “Ireland gave illegal tax benefits to Apple worth up to 13€ billion” and “Luxembourg gave illegal tax benefits to Amazon worth around €250 million”.

[iv] See “The Future of Employment: How Susceptible Are Jobs to Computerisation?”, Carl Benedikt Frey and Michael A. Osborne, accessed November 13, 2017,  https://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf

[v] See Autonomous driving & handling the handover”, “The eyes of true autonomy”, “A new way forward for self-driving cars”, “Hack your way to a self-driving system”, “Briefing: Four essentials to drive consumer acceptance of self-driving cars”, “A user-centered design approach to driverless cars”, “Bigger than cars: Connecting fleets, trucks, and transport systems” and “We must ban sex robots”.

[vi] See U.S. Special Counsel’s Russia Investigation.

Picture credits: Personal archive.

 

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