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By LAURA KAYALI
With Laurens Cerulus and Mark Scott
— London Tech Week kicks off today.
— Germany puts its foot down on the e-Privacy Regulation, asking for more protection for users.
— Digitization and artificial intelligence are among the priorities of the European Parliaments leaders for the next five years.
Good morning and welcome to Morning Tech. Its a public holiday in some EU countries, including Belgium. But were here to keep you company if youre stuck at work.
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|DRIVING THE DAY|
LONDON TECH WEEK: Yes, its that time of year again when techies from the British capital (and a whole bunch of politicians) break out the party balloons to celebrate Londons top spot on the European scene. Expect government announcements, claims of record investment and a lot of crowing that Brexit wont hurt the U.K. digital economy. But if you dig a little deeper, there are two warring factions within U.K. Tech fighting over what the countrys pending departure from the European Union really means — and how the governments policies are affecting how the local industry will grow. For more from Mark, read below or click here.
Case of the optimists: You dont have to venture far from hipster Shoreditch or well-heeled Mayfair to hear startup founders and venture capitalists tell you that the volatility created by Brexit is a great opportunity.” And so far, the figures show that the U.K. is doing just fine. The country garnered $8.7 billion in venture funding last year, according to Dealroom, the data provider. And wherever you look, local unicorns are being created faster than you can pay £5 for an overpriced flat white coffee near Silicon Roundabout.
Case for the pessimists: Just like everything in divided Britain, not everyone agrees with this assessment, claiming that lagging indicators like venture money dont really tell you whats going on around the country today. Instead, they point to a gradual fall in new techies showing up to work in the countrys digital ecosystem (and the ongoing development of rival hubs in Berlin and Paris) as a telling (leading) indicator that not all is well in the state of U.K. tech.
What about the politicians? Glad you asked. Amid this techie stand-off, U.K. lawmakers are playing the cake and eat it, too strategy of both trying to woo people to the local tech scene, while also pushing ahead with some of the most aggressive digital regulation anywhere in the Western world. Just like a page out of the Brexit playbook, few policymakers are yet willing to make tough decisions about how to handle the future growth of London and the rest of the countrys tech sector. Thats leaving many locals scratching their heads about how the U.K. will continue to grow without proper leadership from those in Westminster.
Talking of London Tech Week, Theresa May, the outgoing U.K. prime minister announced £153 million in government funding this morning focused on supporting next-generation computing technology. She also said that 2,500 places would be made available on artificial intelligence and data conversion courses starting in 2020, and that a panel of local techies would write a study on the countrys tech competitiveness amid the uncertainty caused by Brexit.
“If we are going to maintain our position as a global leader, our challenge is how we develop British Tech and make it even better,” May is expected to say later this morning. “We want this to be the place everyone thinks of — and comes to — first when they want to develop their world changing tech ideas.”
COMMISSIONERS WHEREABOUTS: Justice Commissioner Vĕra Jourová is in Prague, where she speaks at a roundtable on Artificial Intelligence. Digital Commissioner Mariya Gabriel is in Sofia, and meets with various Bulgarian ministers.
MARK YOUR CALENDAR: The Court of Justice of the European Union will rule on the Google vs. Germanys telecoms regulator case June 13. Judges will have to determine whether Gmail is a telecoms service.
GERMANY ASKS FOR MORE PROTECTION IN E-PRIVACY: Morning Tech did not see that one coming. During Fridays Telecom Council, the German minister said Berlin “cant support the [e-Privacy] text at the moment because of the wide-ranging powers to process communications data without the consent of the final user.” Pressing for a higher level of privacy protection, he said Germany “rejects Article 6 at the moment, particularly when it comes to localization data and compatible further processing.” Ministers were discussing the Romanian presidencys progress report.
Watch out for Germanys position paper: The minister said they are preparing a document to feed future discussions.
Ireland and the U.K. on a different page: Ireland also has reservations about Article 6, but for different reasons: Dublin fears it is over-protective and would hinder the fight against child pornography (a POLITICO investigation in March showed Facebook also pushes that argument in lobby meetings with the Irish government). The U.K. also mentioned child sexual abuse, but also insisted on the importance of clarifying the interaction between e-Privacy and GDPR to avoid legal uncertainty. The British minister asked for “future-proof definitions” and said the scope was not entirely clear. “We would not want this measure to take public broadcasting into the definition of direct marketing,” she said.
The Commissions (unsurprising) disappointment: Digital Commissioner Mariya Gabriel expressed disappointment as she wanted EU countries to have made an agreement on the text by now. She urged “the incoming Finnish presidency [to] tackle the remaining points.” Finland will take the helm of the EU Council in July, but already hinted it would not reach a general approach on the file.
GDPR AT CJEU: A German court asked a preliminary question to the Court of Justice of the EU on the scope of the right of data access by users under the GDPR. The court wishes to know whether the right of access is “applicable to the committee of a parliament of a constituent state of a Member State that is responsible for processing the petitions of citizens — namely the Petitions Committee of the Hesse Land Parliament.” H/T Frederik Borgesius.
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DIGITIZATION AND AI AMONG THE PARLIAMENT LEADERS FIVE PRIORITIES: Leaders of the European Parliament last week agreed on five areas they want the EU to prioritize over the next five years, according to the group leaders agreement seen by POLITICOs Florian Eder. Environmental and climate issues top the list, followed by economic, competition policy and industrial policy; taxation; innovation, digitalization, artificial intelligence and consumer protection; rule of law and fundamental rights.
Austrian EPP MEPs make committee picks: The delegation of former chancellor Sebastian Kurz, which has seven MEPs, is led by Othmar Karas. Several parliamentarians will ask for committees involved in tech regulation: Karas himself wants to be on the Industry committee, Karoline Edtstadler on the Civil Liberties and Legal Affairs committees, Barbara Thaler on the Internal Market committee and Alexander Bernhuber on the Culture committee.
G20 AGREES, OR DOES IT? Over the weekend, finance ministers from the worlds largest economies agreed to overhaul how the likes of Google and Facebook pay taxes worldwide, a potential breakthrough in the bitter debate about where these tech giants should pay tax. As part of the proposals, which are expected to be finalized by the end of next year, countries will now hammer out the details, including potential divvying up the rights to tax firms when their goods or services are sold locally, even if companies dont have a physical presence nationally. If that still doesnt work, governments may then be able to levy a global minimum tax rate.
At first, its hard not to see this as a victory for France (and the United Kingdom), both countries that have pushed ahead with their own local (digital revenue) taxes because of the lack of a consensus, either across the EU or globally. Speaking at the G20 conference, Frances Bruno Le Maire said: “We have a new economic model based on digital activities and based on the sale and exchange and use of massive data.”
But, but, but: The United States still remains opposed to such digital taxes, claiming that they represent unfair taxation against its tech giants, whereas other countries global firms (like Germanys automakers) get a free pass under the proposed new regime. With more than a year to go before these rules are supposed to come into force, expect a heavy lobbying fight to either water down the digital tax proposals, or efforts to extend them to other parts of the global economy (where other countries firms dominate).
Yes, the G20 is moving ahead. But that doesnt mean the fight is over.
|DIGITAL SINGLE MARKET|
TELECOM MINISTERS WISHLIST: Telecom ministers highlighted cybersecurity, artificial intelligence and fair competition as priorities for the next five years, in their conclusions adopted at Fridays Telecoms Council. National governments said: “Europes cybersecurity capacity should be reinforced in order to protect its digital infrastructures, products, services and users, and its global competitiveness and digital sovereignty.” It called for regional hubs on cybersecurity to boost “technological and industrial capacity.” The text also mentioned the “importance of transparency, fairness, accountability and responsibility in the use of algorithms, so that online platforms across the EU operate in a transparent and predictable manner.”
MACRON TALKS SMART REGULATION WITH TWITTER CEO: The French president Emmanuel Macron met with Jack Dorsey Friday in Paris to discuss the G7 Call to Action and Twitters efforts on content regulation. “People want more safety, more privacy, more trust on the web. They want their lives protected and democracy preserved. You are willing to make Twitter a safer place and I share this goal. I count on you [Jack Dorsey] to deliver together on smart regulation, transparency, data ownership,” Macron tweeted after the meeting. Dorsey said (in French) he would continue working towards a “safer internet.” The Élysée palace did not reply to a request for comment.
MICROSOFT CUTS DEAL WITH FRENCH TAX AUTHORITIES: The U.S. company agreed last year to pay €350 million in back taxes to cover the 2010-2012 period, according to French media. French authorities made similar deals with Amazon and Apple. “Neither [the ministry of economy] nor Microsoft have officially communicated on the agreement,” ZDNet added.
|GLOBAL TECH CORNER|
THE RUSSIA EDITION: Russias telecoms regulator said nine major VPNs would soon be blocked because they refused to deny access to sites featuring on the countrys national blacklist, TorrentFreak reports. Kaspersky Secure Connection, however, agreed to comply, the regulators chief said.
Russian disinformation draws ads on YouTube: Researchers found that 14 YouTube channels linked to Russia and spreading fake news generated billions of views and millions of dollars in ad revenues. Also, videos from those channels were not labeled as state-sponsored, despite pledges from Googles YouTube to flag such content. Read more on Reuters.
|BEFORE YOU GO|
CHIFFRE DU JOUR: €55 billion. Thats how much more the rolling out of 5G networks in Europe would cost without Chinese vendors Huawei and ZTE, according to a study by GSMA.
Morning Tech wouldnt happen without Ian Geoghegan and Zoya Sheftalovich.
|POLITICO PRO ARTICLE|
UK cant make up its mind on tech
— By Mark Scott | Read Online
Digital Politics is a column about the global intersection of technology and the world of politics.
LONDON — Theres a lot Britain cant agree on. Brexit. Who should be the countrys next prime minister. Jeremy Corbyns leadership of the Labour Party.
Add to that list: What to do about tech.
This week, London — still Europes tech capital despite the ongoing political uncertainty — will play host to its annual “tech week” — part marketing ploy, part cheerleading fest to showcase what the British capital, and the rest of the country, has to offer when it comes to glitzy startups, venture capital investment and government support for the digital economy.
Yet in Westminsters halls of power, the hipster mecca of EastRead More – Source