Displaying items by tag: European Commission

EU taking Ireland to court over Apple tax dispute

Written on Sunday, 15 October 2017 08:21

The European Commission is taking Ireland to the European Court of Justice for failing to recover from Apple illegal state aid worth up to €13 billion, as required by the Commission’s August 2016 decision. EU Member States have to recover illegal state aid within the deadline set by the Commission, which is usually four months.

The Commission concluded that Ireland’s tax benefits to Apple were illegal under EU state aid rules, because it allowed Apple to pay substantially less tax than other businesses. As a matter of principle, EU state aid rules require that illegal state aid is recovered in order to remove the distortion of competition created by the aid.

“Ireland has to recover up to €13 billion in illegal state aid from Apple. However, more than one year after the Commission adopted this decision, Ireland has still not recovered the money, also not in part,” said Commissioner Margrethe Vestager, in charge of competition policy. “We of course understand that recover in certain areas may be more complex than in others, and we are always ready to assist. But Member States must make sufficient progress to restore competition.”

The deadline for Ireland to implement the Commission's decision on Apple's tax treatment was 3 January 2017 in line with standard procedures, i.e. four months from the official notification of the Commission decision. Until the illegal aid is recovered, the company in question continues to benefit from an illegal advantage, according to the Commission, which is why recovery must happen as quickly as possible.

Today, more than one year after the Commission's decision, Ireland has still not recovered any of the illegal aid, the Commission claims. Furthermore, although Ireland has made progress on the calculation of the exact amount of the illegal aid granted to Apple, it is only planning to conclude this work by March 2018 at the earliest.

The Commission has therefore decided to refer Ireland to the Court of Justice for failure to implement the Commission decision, in accordance with Article 108(2) of the Treaty on the Functioning of the European Union (TFEU). If a Member State does not comply with the judgment, the Commission may ask the Court to impose penalty payments.

Published in Government

European Commission pushes for drone safety rules

Written on Tuesday, 03 October 2017 11:34

The European Commission is pushing to speed up the implementation of EU-wide rules for the use of drones in the European Union. More than 1,200 safety occurrences – including near-misses between drones and aircraft – were reported in Europe in 2016, which underlines the pressing need for a modern and flexible EU regulatory framework.

The European Commission is calling on the European Parliament and the Council to agree on its proposal from December 2015 establishing an EU-wide framework for drones.

In December 2015, the Commission proposed to create an EU-wide framework for drones as part of its Aviation Strategy. It tabled a legislative proposal establishing standards for drones and drone operations, which is still being examined by the European Parliament and the EU Member States.

Pending this adoption, the Commission’s Single European Sky Air traffic management Research Joint Undertaking (SESAR) – whose role is to develop the next generation of European Air Traffic Management – is currently making half a million euro available to support the demonstration of “geo-fencing” services, which can automatically prevent drones from flying into restricted zones.

“Drones offer tremendous opportunities for new services and businesses. That is why we want Europe to be a global leader,” said Commissioner for Transport, Violeta Bulc.

“I am confident our modern and flexible regulatory framework will give rise to new European champions in this sector. But safety always comes first. If we don’t have enough, the near misses between drones and airplanes could one day have disastrous consequences. I am therefore calling on the European Parliament and the Council to swiftly agree on our proposal from December 2015.”

Ensuring that drones can safely integrate the airspace alongside other users (such as aircraft) is fundamental. This is why the Commission proposed in November 2016 to create an automated traffic management system for drones operating at low-level, referred to as the “U-space”. Geo-fencing is a key component of the U-space.

The call for proposals announced by SESAR aims to select one project demonstrating the active geo-fencing of drones flying below 500 feet (around 152 meters). It requires that drones users are provided with up-to-date information on no-fly zone as well as real-time alerts if they enter one. The project will build on the geolocation capabilities which are built-in in many drones today.

Today's funding comes on top of an envelope of 9 million euros that has already been earmarked for exploratory projects to speed up the development of the U-space, such as the automatic identification of drones or drone-to-drone communication.

Published in Gadget

Google files appeal against $2.8bn EU antitrust fine

Written on Tuesday, 19 September 2017 10:45

Alphabet-owned Google is fighting back against the $2.8 billion antitrust fine it was given by the European Commission in June this year. The Californian tech giant has filed an appeal against the fine, which was the largest penalty ever given by the European Union’s regulator.

The European Commission had ruled that Google’s positioning of its own shopping comparison service at the top of Google search results was an abuse of power. If the practice continued, the Commission said, more fines would come Google’s way.

At the time when the fine was imposed, the EC’s Competition Commissioner, Margrethe Vestager, said Google was conducting activity that was “illegal under EU antitrust rules.” Google “respectfully disagreed” with the ruling, but was given 90 days to end its “anti competitive” practices or else face another fine amounting to 5 percent of the average daily global earning of Alphabet.

The company “has systematically given prominent placement to its own comparison shopping service,” the Commission claims. Furthermore, “Google has demoted rival comparison shopping services in its search results.”

For instance, rival comparison shopping services appear in Google's search results on the basis of Google's generic search algorithms. Google has included a number of criteria in these algorithms, as a result of which rival comparison shopping services are demoted. 

Evidence, according to the Commission, shows that even the most highly ranked rival service appears on average only on page four of Google's search results, and others appear even further down.

Google's own comparison shopping service is not subject to Google's generic search algorithms, including such demotions. As a result, Google's comparison shopping service is much more visible to consumers in Google's search results, whilst rival comparison shopping services are much less visible.

Google's “illegal practices” have had a “significant impact” on competition between Google's own comparison shopping service and rival services, the Commission claims. They allowed Google's comparison shopping service to make significant gains in traffic at the expense of its rivals and to the detriment of European consumers.

Given Google's dominance in general internet search, its search engine is an important source of traffic, the Commission claims. As a result of Google's practices, traffic to Google's comparison shopping service increased significantly, whilst rivals have “suffered very substantial losses of traffic on a lasting basis.”

The Commission is now looking at other areas where it suspects Google may have abused its monopoly power, notably its Android mobile operating system, speculates BBC Technology Correspondent Rory Cellan-Jones. The Commission’s ruling against Google “was seen as just the first shot in a wider campaign,” he said.

Published in Government

The European Commission has endorsed under EU state aid rules three German virtual access products that will allow the use of so-called vectoring technology in state funded high speed broadband networks. This will boost connectivity in rural areas, whilst maintaining competition in the Single Market.

In June 2015, the European Commission approved a €3 billion German state aid scheme to promote investment in high speed broadband infrastructure, especially for rural areas where private investment is lacking. In its decision, the Commission allowed the use of the so-called vectoring technology, provided Germany offered virtual access products to replace the physical access lost due to the use of vectoring.

Vectoring technology allows increased broadband speed over the existing copper network beyond the highest levels normally achieved via very high speed digital subscriber lines (VDSL). This is achieved at comparably low costs. However, as a side-effect, competitors are no longer able to gain physical access to individual copper lines leading to the customers, and are therefore prevented from providing their own high speed internet products to them.

The introduction of an adequate virtual unbundled local access (VULA) product can compensate the negative effects of vectoring. A VULA product requires the network operator to transport competitors' data traffic at conditions similar to those the competitors would have had with physical access to the copper lines. This preserves the possibility for competitors to make own diversified high speed internet offers to their customers even when vectoring is used by the network operator.

In September 2016, Germany notified to the Commission three VULA products proposed by Deutsche Telekom, DNS:Net and NetCologne for their respective broadband roll-out projects under the national next generation access (NGA) scheme.

The Commission said it has thoroughly examined the three proposed VULA products, to assess whether they would adequately compensate the negative effects of vectoring and ensure open access to the network, as required by the 2013 Broadband State Aid Guidelines.

After several amendments to the notified products, the Commission found that the proposed VULA products offered by the three companies fulfill the requirements of providing adequate virtual access to the network.

In particular, the VULA products cover the stretch of copper network leading to final customers. This is in line with the Commission's June 2015 decision, considering that in the relevant rural areas vectoring technology removes physical access to the copper network at this point in the network.

On this basis, the Commission concluded that the three proposed VULA products fulfill the requirements set out in its approval decision of June 2015. This in turn allows vectoring technology to start being used in state-funded high speed broadband networks in Germany.

Published in Government

The European Union has increased pressure on US technology leaders Facebook, Twitter and Google in relation to its user terms. The EU has requested that they amend their user terms in order to make them compliant with current EU law - after EU lawmakers deemed the proposals submitted by the technology giants as ‘insufficient’.

In June, the European Commission (EC) and consumer protection authorities in the EU wrote directly to Facebook, Google and Twitter in which they stressed to the technology companies that they need to improve their proposed changes to user terms by the end of September.

The EU has the power to impose fines if Facebook, Twitter and Google fail to comply with the request issued. Twitter has thus far not responded to an e-mailed request for a comment from Reuters, whilst Google declined to comment on the ongoing situation. However, Facebook believes that it is compliant with current EU law, but conceded that its terms could be formatted in a way which was easier to understand and would work to meet the authorities concerns.

The concerns are concentrated mainly on procedures the social media entities propose to set up for the removal of illegal content on their websites, some analysts have claimed that the terms limit their liability and allows them unilaterally to remove content posted by users.

The US technology trio has been given a deadline of July 20th to submit new proposals, which need to be implemented by the end of September. A source close to the case has claimed that two of the companies had submitted amended proposals, while a third had asked for more time, declining to specify which one.

Facebook, Google and Twitter agreed to the proposed changes touted in March amidst concerns raised by European regulators in March of this year. One of the main issues centered on the terms which forced European consumers to seek redress in California, where the companies are all headquartered, instead of the consumer’s home address.

US technology firms have previously faced scrutiny over the way it conducts its business in Europe, ranging from issues such as privacy, to illegal or threatening content. Both the consumer protection authorities and the EC has requested that the trio provide more details on the timeframe and deadlines it will apply in relation to dealing with notifications of content deemed illegal under consumer law.

Published in Government

The European Commission has launched a public consultation on how Europe should promote digital innovation in health and care, for the benefits of citizens and health systems in Europe.

The input will feed into a new policy Communication to be adopted by the end of 2017, as announced in the recent review of the Commission's Digital Single Market strategy.

“We are dedicated to improving European citizens' quality of living by improving Europe's health, care and research systems by using digital technologies to their full potential,” stated Vice-President Andrus Ansip and Commissioners Vytenis Andriukaitis, Mariya Gabriel and Carlos Moedas.

“This consultation will help us identify ways to offer citizens, medical professionals and researchers better access to health data, prevention, rapid response to pandemic threats, personalized treatments and care,” the statement added.

“We are considering new digital initiatives to deliver on the free movement of patients and data, to support the modernization of national health systems, and to bring together scattered evidence and innovative knowledge from across Europe. At the heart of our policies, citizens and their wellbeing are our first priority.”

The consultation will collect information on three main pillars, including citizens' secure access to their health data and the possibility to share it across borders, clarifying citizens' rights and enhancing interoperability of electronic health records in Europe.

It will also focus on connecting and sharing data and expertise to advance research, personalize health and care, and better anticipate epidemics. Finally, it will focus on using digital services to promote citizen empowerment and integrated person-centered care.

Citizens, patient organizations, health and care professionals, public authorities, researchers, industries, investors, insurers and users of digital health tools are all invited to share their views via EU Survey until 12 October 2017. 

Demographic change, growing prevalence of chronic diseases, re-emergence of infectious diseases and the rising cost of healthcare poses major challenges for healthcare provisions in Europe.

The Communication on effective, accessible and resilient health systems concluded that the Member States' future ability to provide high-quality healthcare to all citizens will depend on making health systems more resilient, while remaining cost-effective and financially sustainable.

Digital innovation can offer cost-effective tools to support the transition from a hospital-based healthcare model to a person-centered and integrated model, improve health promotion, prevention and access to care, and contribute to the sustainability and resilience of healthcare systems, the European Commission claims. It can make effective the right for citizens to access their health data everywhere in Europe.

It can also help improve surveillance and early detection of infectious outbreaks. It can drastically advance the diagnosis and treatment of patients. For instance, in the area of rare diseases, the current average time for diagnosing a known rare disease of 5.6 years could be shortened to one year thanks to molecular diagnosis and tele-consultations with specialists.

Furthermore, the digital transformation of health and care stimulates the empowerment of citizens allowing them to manage their own health and interact more easily with health providers.

The Digital Single Market Mid-term Review tackles these issues. It proposes that the Commission addresses the need and scope for measures on digital health and care, in line with legislation on the protection of personal data, patient rights and electronic identification.

Published in Government

The Investment Plan for Europe, the so-called "Juncker Plan", has backed a €150 million EIB loan agreement with Cosmote, a Greek telecommunications operator, to upgrade its mobile broadband network. This agreement was made possible by the support of the European Fund for Strategic Investments (EFSI).

The loan agreement will help to finance Cosmote's plans to enhance and expand its mobile broadband network, significantly increasing the network's performance in terms of speed, capacity and coverage. It will, in particular, improve the networks performances in more rural and remote areas of the country.

“This agreement demonstrates yet again the valuable role the Juncker Plan can play in mobilizing investment to support and expand growth-enabling infrastructure in Greece,” said Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs.

“The agreement also serves as testament to the Commission's broader strategic objective of seeking to fully exploit the opportunities offered by digital technologies to promote innovation, productivity and growth,” Pierre added. “The Commission remains committed to supporting investment that will act to secure Greece's economic recovery.”

The Juncker Plan is working to boost investment, support jobs and spur growth in Greece and across Europe. As of June 2017, operations approved in Greece under the EFSI represent a financing volume of over €1.1 billion and are expected to mobilize over €3.3 billion in investments.

This project contributes to meeting Europeans' growing connectivity needs, promoting access to high quality networks and boosting Europe's competitiveness, as foreseen in the Digital Single Market strategy. Some 10% of EFSI investments are in the digital sector.

Published in Telecom Operators

The European Commission has fined Google €2.42 billion for breaching EU antitrust rules. Google has abused its market dominance as a search engine by giving an illegal advantage to another Google product, its comparison shopping service, according to a European Commission statement. The company must now end the conduct within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google's parent company.

Google has come up with many innovative products and services that have made a difference to our lives. That's a good thing. But Google's strategy for its comparison shopping service wasn't just about attracting customers by making its product better than those of its rivals,” said Commissioner Margrethe Vestager, in charge of competition policy.

Instead, Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors,” Vestager added. “What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation.”

Google's flagship product is the Google search engine, which provides search results to consumers, who pay for the service with their data. Almost 90% of Google's revenues stem from adverts, such as those it shows consumers in response to a search query, according to the European Commission statement.

In 2004 Google entered the separate market of comparison shopping in Europe, with a product that was initially called "Froogle", re-named "Google Product Search" in 2008 and since 2013 has been called "Google Shopping". It allows consumers to compare products and prices online and find deals from online retailers of all types, including online shops of manufacturers, platforms (such as Amazon and eBay), and other re-sellers.

When Google entered comparison shopping markets with Froogle, there were already a number of established players. The Commission’s statement points out that contemporary evidence from Google shows that the company was aware that Froogle's market performance was relatively poor (one internal document from 2006 stated "Froogle simply doesn't work").

Comparison shopping services rely to a large extent on traffic to be competitive. More traffic leads to more clicks and generates revenue. Furthermore, more traffic also attracts more retailers that want to list their products with a comparison shopping service. Given Google's dominance in general internet search, its search engine is an important source of traffic for comparison shopping services.

From 2008, Google began to implement in European markets a fundamental change in strategy to push its comparison shopping service. This strategy relied on Google's dominance in general internet search, instead of competition on the merits in comparison to shopping markets.

The company “has systematically given prominent placement to its own comparison shopping service,” the Commission claims. Furthermore, “Google has demoted rival comparison shopping services in its search results.” For instance, rival comparison shopping services appear in Google's search results on the basis of Google's generic search algorithms. Google has included a number of criteria in these algorithms, as a result of which rival comparison shopping services are demoted.

Evidence, according to the Commission, shows that even the most highly ranked rival service appears on average only on page four of Google's search results, and others appear even further down. Google's own comparison shopping service is not subject to Google's generic search algorithms, including such demotions. As a result, Google's comparison shopping service is much more visible to consumers in Google's search results, whilst rival comparison shopping services are much less visible.

Google's illegal practices have had a “significant impact” on competition between Google's own comparison shopping service and rival services, the Commission claims. They allowed Google's comparison shopping service to make significant gains in traffic at the expense of its rivals and to the detriment of European consumers.

Given Google's dominance in general internet search, its search engine is an important source of traffic, says the Commission. As a result of Google's illegal practices, traffic to Google's comparison shopping service increased significantly, whilst rivals have “suffered very substantial losses of traffic on a lasting basis.”

Published in Finance

The European Commission has opened an “in-depth” investigation to assess the proposed acquisition of NXP by Qualcomm under the EU Merger Regulation. The Commission has concerns that the transaction could lead to higher prices, less choice and reduced innovation in the semiconductor industry.

Commissioner Margrethe Vestager, in charge of competition policy, said: “We use our electronic devices every day - mobile phones or tablets. As semiconductors are used in practically every electronic device, we are dependent on them in those devices. With this investigation, we want to ensure that consumers will continue to benefit from secure and innovative products at competitive prices."

The proposed transaction involves the acquisition of the whole of NXP by Qualcomm and would combine two of the leading players in the semiconductor industry. More specifically, Qualcomm develops and supplies baseband chipsets (both standalone and integrated with an application processor) enabling cellular telecommunications standards such as UMTS and LTE. NXP is an important provider of semiconductors, in particular for the automotive industry. With respect to mobile devices, NXP is a leading provider of near-field communication ("NFC") chips and secure elements ("SEs").

The Commission's initial market investigation raised issues relating in particular to semiconductors used in mobile devices, such as smartphones, and in the automotive industry. The Commission is concerned that the merged entity would hold strong market positions within both baseband chipsets and NFC/SEs chips, and would have the ability and incentive to exclude their rival suppliers from these markets through practices such as bundling or tying.

The Commission is also concerned that the merged entity would have the ability and incentive to modify NXP's current intellectual property licensing practices, in particular in relation to NFC technology, including by bundling the acquired NFC intellectual property to Qualcomm's patent portfolio. The Commission will investigate whether such conduct could lead to anticompetitive effects, such as increased royalties for customers and/or exclusion of competitors.

The Commission claims the merger would remove competition between companies active in the markets for semiconductors used in the automotive sector and, in particular, in the emerging Vehicle-to-Everything ("V2X") technology, which will play an important role in the future development of "connected cars".

The transaction was notified to the Commission on 28 April 2017. The Commission now has 90 working days, until 17 October 2017, to take a decision. The opening of an in-depth investigation does not prejudge the outcome of the investigation.

Published in Government

The European Commission has determined that Croatia's €101.4 million Next Generation Network (NGN) Broadband plan is in line with EU state aid rules. This scheme aims to provide fast internet access where it is currently not available, in particular in rural areas.

Commissioner Margrethe Vestager, in charge of competition policy, said: "Croatia's broadband scheme will bring faster internet to consumers and businesses that currently do not have it. It will help Croatia to put in place the necessary infrastructure for an information society and contribute to creating a Digital Single Market within the EU."

Croatia's current broadband market is characterized by high prices and low take-up rates compared to the EU average. This scheme aims to significantly improve the situation and help Croatia increase its connectivity and meet the targets set out by the Commission in the context of the Digital Single Market.

Backhaul networks, such as the Next Generation Network (NGN) in Croatia, provide the backbone of internet networks and can be thought of as information highways. Next Generation Access (NGA) networks, which can be thought of as more local roads, connect into the NGN.

The previous Croatian broadband scheme, the National Broadband Plan, was approved by the Commission in January 2016 and supported the roll-out of NGA networks in un-served or underserved areas. The purpose of the new measure is to provide sufficient upstream capacity to sustain the previously approved scheme in rural areas.

Croatia's NGN will be rolled out partly in areas where either no NGN backhaul network exists, or areas where the backhaul infrastructure is insufficient to meet projected needs. No operator has shown any interest to invest commercially in the scheme's target areas, which were identified by Croatia through a detailed mapping exercise and two public consultations.

The scheme aims to increase the coverage of high speed broadband and provide speeds of 100 Mbit/s symmetrical (i.e. upload and download). It will run until 31 December 2023. The new infrastructure will be financed mainly through the European Regional Development Fund and partly by national funds, and the network will remain in public ownership.

The management of the scheme is attributed to a public undertaking, OiV, which will offer long term leasing agreements on the infrastructure to all interested operators. These operators will subsequently be able to offer connection services to local access providers, which in turn serve end consumers. In this way, the new NGN backhaul network will support the NGA networks previously approved under EU state aid rules.

The Commission assessed the measure under EU state aid rules, in particular its 2013 Broadband Guidelines. These guidelines aim to ensure, amongst other things, that public funding does not take the place of private investment. They also ensure that other service providers can use the publicly funded infrastructure on a non-discriminatory basis. This protects effective competition, which is a key driver for investment and better prices and quality for consumers and businesses.

The Commission concluded that the positive effects on competition in the Croatian broadband market outweigh possible distortive effects on already established operators. It therefore found the Croatian NGN scheme to be in line with EU state aid rules.

Published in Government
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