EP amendments to the DSA + Mario Draghi • Table.Briefings

Dear reader,

Yesterday, the European Parliament adopted its negotiating position on the Digital Services Act by a large majority vote. This means that a number of special regulations have once again been added to the basic framework of the DSA. Some changes are bold, writes Falk Steiner in his analysis. He asks consumer protection advocates and industry representatives to voice their opinion and provides an outlook on points that still need to be addressed – such as the question of how the DSA will relate to national law.

Italy is facing an election that more than a few are seeing with great concern: If Mario Draghi runs for the presidency, he would have to leave his post as prime minister – and that in the midst of implementing a major, EU-funded reform program. The already fragile government coalition is at risk of collapsing, with no worthy successor in sight. Isabel Cuesta reports on the tense climate ahead of the election, which starts on Monday.

Your
Sarah Schaefer

DSA: EP changes expand the one-for-all law

By

Falk Steiner

The basic idea behind the Digital Services Act is simple: The DSA is intended to create uniform rights and obligations throughout Europe between users and various forms of providers on the Internet. And impose heavier burdens on providers in the process. On Thursday afternoon, the European Parliament voted 530 to 78, with 80 abstentions, in favor of the latest version after final amendments. “This vote gives Parliament the back-up to defend its position against the Council,” expects Andreas Schwab (CDU/EVP).

A key aspect of the DSA is the regulation of social media operators’ obligations. “In the future, there will be Europe-wide rules for reporting and deleting illegal content online, but also new rights for users in the event of unfair behavior on the part of the platforms,” says Tiemo Woelken (SPD/S&D), describing the regulation as adopted by the MEPs.

Alexandra Geese (Greens/EFA) sees it as a successful mix. “Platforms will be liable for their own behavior, not for the opinions expressed by their users,” said Geese. Combating systemic risks and protecting the right to freedom of expression is the balancing act that is being created here.

From the perspective of consumer advocates, the rights of users must now be consolidated in the trilogue. “Compared to the position of the member states, the parliamentary position is a remarkable step forward,” says Martin Madej, a consultant in the Digital and Commerce team at the Federation of German Consumer Organizations (VZBV).

DSA and national law: relations remain unclear

There is likely to be some debate about content regulation in particular. It has not yet been decided how the DSA will relate to national law, for example. Will providers have to remove all content from their platforms that is illegal under national law?

The German Network Enforcement Act (NetzDG) already proved to be a systematic blunder when it came to the question of which reports platforms are obliged to review: Not all, but only a specific catalog of predefined criminal offenses, are covered by the NetzDG. And since there is no European criminal law, the frame of reference in the DSA is always national. For example, incitement to hatred paragraph for the denial of the Holocaust, which is met with much approval in Germany, could become problematic if the Polish criminal code were to apply. The DSA has remained vague here, even in the parliamentary position.

And the question of whether the content of professional media should be treated equally to that of ordinary users once again stirred up debate. A motion by cultural and media politicians to exempt such content did not find a majority in the European Parliament. Many MEPs feared that a blanket exemption for professional media companies would open the door to misinformation campaigns by state media such as Russia Today (RT) or aggressive private companies like Breitbart.

Oliver Sueme from the Internet industry association Eco sees systematic reasons for not including a media exception in the DSA. The aim, he says, “must be to maintain a clear line and not to overburden the horizontal instrument with special regulations.” He, therefore, sees the rejection as positive and as a “good signal for the protection of democratic values and against disinformation on the net.”

Overlaps with other EU regulations

Andreas Schwab (CDU/EVP) does not consider the job done, even with the DSA: “As horizontal legislation for platforms of all kinds, it will require additional measures such as the proposal on regulations of political advertising and the law on freedom of the media.” In fact, it will likely take years for courts to finally clarify the interactions with other EU regulations after the DSA is passed.

The DSA parliamentary position also contains bold proposals in other areas that overlap with other regulations. For example, the parliamentarians have spoken out against a general ban on advertising based on data analysis. However, they at least want to exclude the use of sensitive data categories and also prohibit the processing of personal data for advertising targeted at minors.

Alien Mulyk, Public Affairs Officer EU and International at the e-commerce association BEVH, criticizes this as “absurd insofar as companies, in order to prevent such advertising from being shown to minors, first have to track that they are minors.” However, this could well have been the intention of the submitters – because this would cause a total ban through the back door.

Dark Patterns ban

Another parliamentary position is also likely to have a major impact in this context: A clear majority of MEPs voted in favor of a ban on so-called Dark Patterns. This refers to user misleading techniques that are intended to lead to consent, for example, in advertisement tracking. For example, pop-up windows in which certain options are barely recognizable or color-coding such as a green background. Such methods already keep courts busy. A DSA tailored to parliamentary tastes would outright ban them.

“Banning surveillance advertising altogether would have been a more effective strategy, but excluding the processing of sensitive data and Dark Patterns is certainly the second-best option,” says Jan Penfrat, Senior Policy Advisor at the European Digital Citizens’ Rights Association EDRi. The Federation of German Consumer Organizations also welcomes the amendments and hopes that the Parliament will be able to convince the member states in the trilogue.

Thomas Duhr, Vice-President of the German Association for the Digital Economy (BVDW), is not as pleased with the parliamentary plans. Some “very restrictive regulations have been adopted for online advertising that could harm the entire digital economy, as they create massive legal uncertainty.” Existing legislation on data and privacy protection would be circumvented, expanded, and ultimately ignored with these regulations. In some points, MEPs have used the Digital Services Act as a catch-all for any regulatory issues, Duhr criticizes.

The attempt at a one-for-all law affects very different sectors. The rejection of so-called stay-down obligations was primarily directed against automated filtering of already recognized infringements. For example, film or music use on social media platforms or cloud storage. This is considered susceptible to so-called overblocking.

Many points mentioned only in justifications

From the perspective of the German Markenverband, however, this also affects online marketplaces. They are to be subject to new obligations to verify the identification of vendors (“Know Your Business Customer”). However, consumer protection will remain full of holes “as long as counterfeits identified online can be uploaded again and again,” says Christian Koehler, CEO of Markenverband. During the trialogue, he said, the latter would campaign for the “notice and take down” principle and the anchoring of the KYOB principle in the articles of the DSA. As with many other points now envisaged by the EP, much is only mentioned in the explanatory memoranda. But in the actual legal text, the articles, some recitals are hardly reflected.

In the trilogue, consumer protectionists want to achieve tighter regulations, especially for the liability of online marketplaces, which also include compensation. Ursula Pachl of the umbrella consumers’ group BEUC is critical of the fact that – at the request of the industry committee – exemptions for small and medium-sized providers in the marketplace obligations were included in the parliamentary position. “This could mean that consumers could still buy unsafe products if they turn to smaller online marketplaces,” Pachl said.

A “differentiated approach that takes the diversity of content and services into account” is needed, says Bitkom CEO Bernhard Rohleder. The DSA would have to be “designed in such a way that it sets standards on a global scale“.

Mario Draghi: Italy’s dilemma

It’s been a year since Mario Draghi was entrusted with the task of stabilizing Italian politics amid a pandemic and a crushing economic crisis. Choosing a technocrat to lead the country was President Sergio Matarella’s last resort to avoid early general elections.

If Draghi were now to run for president himself, the country would possibly face renewed political turmoil. The 74-year-old would vacate the post of prime minister amid the implementation of the major EU-funded reform program, and a worthy successor is not in sight. The presidential election, which begins on Monday, is therefore also being watched closely in Brussels and other member states.

“I am simply a man, a grandfather if you will, in the service of institutions,” Draghi said in December, hinting that he would be willing to run for president. Sergio Mattarella (Partido Democratico) is not running for a second term. Draghi has all the qualifications to succeed him. However, if the former ECB chief were to become president, he would have to appoint a successor for the post of prime minister or call early elections.

For many, this poses a threat to the fragile government of national unity. Others believe that Draghi as president could exert a stabilizing influence on Italy’s turbulent politics over the next seven years.

Fragile government coalition threatens to break up

Mario Draghi’s current government is supported by the 5-Star Movement (M5S), Forza Italia, Lega Nord, PD, Italia Viva, and Article One. Draghi formed it at the height of the pandemic after incumbent Prime Minister Giuseppe Conte was forced out of office. The former ECB chief led the motley alliance with a firm hand.

But the election of the new president could break up the alliance. The 85-year-old Silvio Berlusconi has expressed his interest in running for president. He threatened that his Forza Italia party would leave the current coalition and force early parliamentary elections if Draghi moved to the presidency.

But the potential success of Berlusconi’s push is questionable. The media entrepreneur with a criminal record has been looking for allies by phone for weeks, apparently in vain. Deputy Vittorio Sgarbi has been contacting deputies and senators on behalf of the Cavaliere, as Berlusconi is also known. “La Repubblica” quoted him as saying that Berlusconi was sad and considering an honorable resignation. But the right-wingers (Lega, Forza Italia and Fratelli d’Italia) do not have another viable candidate at the moment.

So far, no one is risking revealing their cards, neither the potential candidates nor the political groups. On Monday, however, the voting will begin. The Italian president will be elected by the members of the Senate, the Parliament, and the regional delegates. Together they add up to 1009 voters, called “grandi elettori.” Next Monday, the deputies will meet in a joint session in Montecitorio and vote for the first time in secret by writing the candidate’s name on a piece of paper.

Tensions increase

Candidates must be supported by two-thirds to win the election. The hurdle drops to a simple majority when the election reaches the fourth round, with daily voting until the required quorum is reached. The election becomes increasingly difficult to navigate in its final stages, when loyalties sometimes change quickly and individual parliamentarians take advantage of the secret ballot to violate their group’s voting discipline.

Draghi’s political position is weakened by the fact that tensions are rising in his coalition. Two of the main parties, the 5-Star Movement and the Democratic Party, are at odds.

In both formations, with several ministers in the government, there are some who are betting that Draghi will stay where he is to complete reforms and ensure stability in the executive branch. Others, like PD Secretary Enrico Letta, are inclined to open the doors of the Quirinal Palace for the former banker to ensure national stability and international recognition. Draghi argues that the legislature will continue whether he is at the helm or not. Isabel Cuesta

Environment Council: Taxonomy resistance is forming

On Thursday, the first informal meeting of EU environment ministers under the French presidency began in the Amiens. Barbara Pompili, France’s Minister of the Ecological Transition, said she was pleased that there was agreement in principle among the member states on the planned carbon offset mechanism (CBAM). Now, it was a matter of discussing exactly how the instrument would be designed. The French government had announced its intention to make the CBAM a climate priority during its presidency. The energy ministers will also be present at the three-day meeting.

The heated debate about the taxonomy does not stop at this meeting. On Thursday evening, Spain, Austria, Denmark, and Luxembourg published a letter to the Commission opposing the classification of gas and nuclear power as sustainable. A common position on the matter will be taken at the Environment Council meeting, they said. The countries had previously announced that they would reject the draft taxonomy.

Federal government wants to take a stand

Germany is represented on the environmental dossier by Stefan Tidow, State Secretary at the BMUV. For the energy part, he is joined today by Sven Giegold, State Secretary at the BMWK. Tidow also commented on the taxonomy. Asked by journalists if he saw any chance of preventing nuclear power from being included in the taxonomy, he replied, “We’re not there yet.” He said the German government would first take a stand and make it very clear that it found the inclusion of nuclear power difficult. The Commission would then have to present its proposal, and then the question would be how to proceed.

Is the dispute over taxonomy putting a strain on Franco-German relations? “No, we have different interests, but that is quite normal,” Tidow replied. Nuclear power is not green energy, of course. It is not sustainable because the question of final storage is unresolved, and it is basically not economical either if you take into account the liability risk. The German government has a clear position on this.

Focus on climate package Fit for 55

According to host Pompili, the environment and energy ministers are to advance the legislative texts of the Fit for 55 climate package. In the meantime, most of the drafts of the EU Parliament’s rapporteurs for the package of measures to combat climate change have been submitted. But some of the individual instruments remain highly controversial. No decisions are made at informal meetings, but the scope for possible compromises is being explored.

On Thursday, however, the first item on the agenda was the problem of plant protection products and how the negative impact on biodiversity can be reduced. Here, there is criticism from the ranks of the member states that the European Food Safety Authority EFSA has not yet published any standards to which the national authorities could orient themselves. Also on the agenda was the EU Commission’s draft regulation for deforestation-free products, i.e., against “imported deforestation” from Brazil or Asia.

For the energy ministers, today and tomorrow will be about deepening the discussion on a response to high energy prices. So far, there is no consensus between the northern Europeans, who trust the market, and the southern Europeans, who are calling for joint initiatives. The joint meeting of environment and energy ministers is also expected to address the social cushioning of climate change and wood as a sustainable raw material and forest as a CO2 store. sti

Von der Leyen: Chips Act to come in early February

The EU Commission plans to present its draft legislation to promote the chip industry in Europe at the beginning of February. Commission President Ursula von der Leyen announced this at the World Economic Forum. Europe.Table had previously reported that the Internal Market Commissioner responsible, Thierry Breton, intended to present the proposal for the European Chips Act soon.

Von der Leyen said that the current dependence on a few producers outside Europe could no longer be afforded. To achieve this, the EU would have to “radically” change its approach. The initiative’s stated goal is to increase the EU’s share of global microchip production to 20 percent by 2030. The EU would have to more than double its share within a few years to achieve this. If the semiconductor market grows as forecasted, production capacities in Europe will have to more than quadruple by 2030.

The aim is to strengthen Europe’s position along the entire value chain. The European Chips Act, therefore, aims to promote research capacities as well as chip design and production. In order to channel investments to Europe, the authority will relax the state aid rules as announced and, for the first time, allow state aid for innovative “first of a kind” factories, von der Leyen said. In addition, the supply chains are to be monitored more closely in order to prevent acute bottlenecks in the future, as is currently the case. In addition, the aim is to improve access to skilled workers and financing for medium-sized companies in the sector.

Von der Leyen also wants to discuss a targeted division of labor with partners such as the USA. The goal is to “better balance” mutual dependencies. tho

EP rapporteur wants standard plug for more devices

The European Parliament’s rapporteur, Alex Agius Saliba, wants to mandate a uniform charging port for additional devices. The EU Commission had proposed obliging manufacturers of cell phones, tablets, digital cameras, and portable speakers, among others, to install a uniform charging cable connection in USB-C format. In his draft report, Agius Saliba (S&D) now proposes including e-readers, smartwatches, and in-ear headphones in the directive.

The initiative aims to end cable clutter among consumers and reduce electronic waste. The Commission estimates that about 11,000 tons of waste are generated annually in the EU from disposed and unused chargers. The standardized connectors are expected to reduce this amount by nearly 1,000 tons. In addition, electronic devices will no longer be sold with chargers as standard.

Agius Saliba wants to shorten the transition period for manufacturers compared with the Commission: They are to have only six instead of twelve months once the supplementary directive to the Radio Equipment Directive has come into force. Wireless charging is to be included in the regulation at a later date. Agius Saliba proposes here that the Commission should include whichever technical solution has become established by then by the end of 2025. tho

Study: ETS 2 useful but with deficits

The expansion of the European emissions trading system for buildings and road transport should not be the only driver for decarbonizing the two sectors. Rather, the ETS 2 must be embedded in a broad policy mix and binding national reduction targets, demand the authors of a study by the German Forum Ökologisch-Soziale Marktwirtschaft (internationally known as Green Budget Germany) and the Forschungsstätte der Evangelischen Studiengemeinschaft (FEST).

The EU Commission’s proposal to reform and expand the existing ETS was evaluated. This reform makes sense in principle, as CO2 pricing in the building and road transport sectors passes on the costs of climate damage to polluters and opens investment channels for climate-friendly alternatives for mobility and building heat, the study says. However, ETS 2 should be seen as complementary to “standards, public investment, and other market-based instruments” and as a warning indicator of the effectiveness or ineffectiveness of further climate policy measures.

The ETS 2 should not be a replacement for the so-called “Effort Sharing Regulation” (ESR), which sets greenhouse gas reduction targets for each country in those sectors not covered by the existing ETS. The authors conclude that ETS 2 is a tool to meet the ESR targets.

Minimum and maximum price for the ETS 2

Furthermore, the price control mechanisms, whose aim is to prevent highly fluctuating prices, are assessed as insufficient. Therefore, the authors propose both a price floor to ensure the effectiveness of the system for climate protection and a price cap to guarantee the social compatibility of CO2 pricing. The latter could be implemented via the Market Stability Reserve (MSR). This means that if the CO2 price in ETS 2 were to exceed the cap, surplus and unused emission allowances from previous years that were transferred to the MSR could be redeemed to lower the price.

The Social Climate Fund (SCF) is also seen as fundamentally positive, as it redistributes a substantial volume of ETS 2 revenues to poorer member states. However, the criteria under which member states receive money from the fund are unclear, according to the study commissioned by Germanwatch, CAN Europe, and WWF. They, therefore, call for improved governance structures that allow for a fair distribution of funds to particularly affected households. In addition, all revenues from the new ETS should flow into climate protection investments or compensation payments for EU citizens. luk

CO2 price for air traffic to come earlier

Airlines should pay for all of their CO2 emissions in Europe from 2026, a year earlier than initially planned by the EU, according to an early draft of the European Parliament’s position on the policy. This is what Sunčana Glavak (EPP), the rapporteur of the ENVI Committee in the EU Parliament for the extension of European emissions trading to air traffic, is proposing.

Currently, airlines still receive free CO2 allowances for more than 80 percent of their emissions in a kind of pilot phase. From 2024, airlines would lose 33.3% of their free CO2 permits, the draft said, rather than the 25% proposed by the Commission. From 2025, they would lose 66.6%, rather than 50%. Finally, in 2026, there would be no more free allocations. That would mean an extra 12 million CO2 permits are sold into the carbon market for polluters to buy, according to Suncana Glavak.

The Croatian MEP said airlines lack solutions to quickly cut their emissions and proposed that an EU innovation fund should help develop technologies to cut the sector’s emissions, including sustainable fuels and cleaner engines.

Strengthening CORSIA

Currently, only emissions from flights within Europe are covered by the EU carbon market, but flights to and from the EU are not. Those international trips are covered by a CO2 offsetting scheme set up by United Nations aviation agency ICAO, which becomes mandatory for countries in 2027 – the so-called Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

EP rapporteur Glavak demands that the EU should try to strengthen this system. CORSIA has been criticized by some countries and environmental organizations as ineffective in reducing CO2. If ICAO’s measures fall short of the EU’s climate goals, “other carbon mitigation options should be put in place,” the report said.

Last week, Peter Liese, rapporteur of the ETS reform, had announced that emissions from shipping would also be integrated into the ETS earlier than envisaged by the Commission. luk/rtr

Blinken: Russia border crossing would be act of aggression

Immediately ahead of the next round of top-level talks on a diplomatic solution to the Ukraine crisis, the United States has clarified that any border incursion by Russian troops would constitute aggression. Such an incident would provoke a “rapid, serious and joint response” from Western allies, US Secretary of State Antony Blinken said Thursday in Berlin after a meeting with German leader Annalena Baerbock. He said this included attempts at destabilization, such as through hybrid attacks or paramilitary actions.

Blinken thus clarified remarks made by US President Joe Biden. Biden had indicated Wednesday that minor aggression by Russia could result in a milder response from the West. Blinken will meet with Russian Foreign Minister Sergei Lavrov in Geneva on Friday.

Baerbock emphasized: “In the matter at hand, there is nothing less at stake than the preservation of the European peace order.” This “is existential for us, so we have no choice but to consistently stand up for it and protect it with a shield”. This also applies “if these measures have economic consequences for us”.

Baerbock and Blinken want dialogue

But she agreed with Blinken, “the only way out of the crisis is a political way, and this way leads only through dialogue,” Baerbock said. “Unfortunately, Russian behavior continues to speak a different language.” Every channel for talks must now be used. In this context, Baerbock welcomed the fact that NATO Secretary-General Jens Stoltenberg had invited to another meeting of the NATO-Russia Council. This was a “good and important signal”. It was also essential to revive the so-called Normandy format, to which Germany, France, Russia, and Ukraine belong.

At the virtual Davos World Economic Forum, EU Commission President Ursula von der Leyen also commented on the situation on the border with Ukraine: “If the situation gets out of control, if there are further attacks on Ukraine’s territorial integrity, we will respond with massive economic and financial sanctions,” von der Leyen said. “The transatlantic community is steadfast in this regard.” Russia’s attempt to divide Europe into spheres of influence is unacceptable. “If there are attacks, we are ready.” rtr

Twitter must disclose activities against hate speech in France

The US short message service Twitter must disclose details on what it does to tackle hate speech online in France. That was the decision of a Paris appeals court on Thursday, upholding the ruling of a lower court.

It upheld a ruling by a lower court last year that ordered Twitter to provide details on the number, nationality, location, and spoken language of people it employs to moderate content on the French version of the platform. The appeals court said it confirmed, in full, the first ruling and said Twitter should pay €1,500 in damages to each of six plaintiffs, a copy of the ruling seen by Reuters showed.

A Twitter spokesperson said the company’s top priority was to ensure the safety of the people using its platform, adding that the group was reviewing the court decision. The lower court decision also required Twitter to disclose any contractual, administrative, commercial, and technical documents that would help determine the financial and human resources it has deployed to fight hate speech online in France.

Global technology giants such as Twitter, Facebook, and Google have been accused of doing too little to address online abuse. In Germany, the Network Enforcement Act (NetzDG) has already been in place since 2018, under which platforms with large reach are covered and according to which punishable content must be quickly and consistently deleted from social media. rtr

Gunther Kegel: achieving climate targets with innovation

Gunther Kegel is President of the German Electrical and Electronic Manufacturers’ Association (ZVEI) and Chairman of the Board of Pepperl+Fuchs.

“We need to use energy more efficiently,” says Gunther Kegel passionately. His goal: “To be able to generate more as an economy with less power consumed.” Kegel is not an environmental activist but represents the German electrical industry as president of the ZVEI association. Based on the number of employees, it is Germany’s second-largest industrial segment. Kegel himself holds a Ph.D. in electrical engineering. The catalyst for his career was a Christmas present: “When I was nine years old, my grandmother gifted me an electrical construction kit. It included experiments that fascinated me.”

After completing his studies, Kegel joined Pepperl+Fuchs in 1990, a company that manufactures electronics for factory and process automation. He now heads the global player as chairman of the board. He enjoys his honorary role as association president, says Kegel. In ZVEI, he says, you can tackle important social issues: renewable energy sources, electric motors, automation. Kegel sees all of this as an opportunity to trigger change through technology.

“The light bulb is a great example,” says the 61-year-old. At the EU level, his association lobbied for a faster transition away from light bulbs and toward energy-saving illuminants. From Kegel’s point of view, a dual success: “If you approach such challenges with innovations, you have the better product for customers, which is more energy-efficient at the same time.” Climate protection, not through abolishment, but through innovation and market economy, this mechanism is pioneering, he says. ZVEI’s motto is: “Energy efficiency through electrification and digitization.”

No electricity tax for renewables

He considers the EU’s Fit for 55 legislative package to be both trend-setting and worthy of criticism – in some respects, he says, it is not ambitious enough. For example, the Electronic Manufacturers’ Association is calling for energy sources to be taxed solely on their greenhouse gas emissions. Renewables would then no longer be subject to electricity tax.

Why? “It has to pay off to invest in climate-friendly technologies – for the company and the individual”. If the CO2 price is to have an effect, it needs to be significantly higher, at 100 to 150 euros per metric ton. “Then, for example, a single tank of gas would cost 20 euros more, and that would make an impact on the pocket.”

With such market-based incentives, he says, people could be persuaded to change their way of thinking. For all his ambitions for transformation, however, Kegel also stresses that planability and continuity are important to him. “Things should not happen too quickly.” Europeans must now roll up their sleeves and plan how to achieve the goals they have set. “Politically, this is nowhere near as spectacular as the bold announcement of a Green Deal.” But: the actual work, the implementation, still needs to be done “And fast.” Paul Meerkamp

EUROPE.TABLE EDITORS

Till
Hoppe

Charlotte
Wirth

Falk
Steiner

Timo
Landenberger

Corinna
Visser

Lukas
Knigge

Eric
Bonse

Sarah
Schaefer

Manuel
Berkel

Lisa-Martina
Klein

Markus
Grabitz

Stephan
Israel

Claire
Stam

Dear reader,

Yesterday, the European Parliament adopted its negotiating position on the Digital Services Act by a large majority vote. This means that a number of special regulations have once again been added to the basic framework of the DSA. Some changes are bold, writes Falk Steiner in his analysis. He asks consumer protection advocates and industry representatives to voice their opinion and provides an outlook on points that still need to be addressed – such as the question of how the DSA will relate to national law.

Italy is facing an election that more than a few are seeing with great concern: If Mario Draghi runs for the presidency, he would have to leave his post as prime minister – and that in the midst of implementing a major, EU-funded reform program. The already fragile government coalition is at risk of collapsing, with no worthy successor in sight. Isabel Cuesta reports on the tense climate ahead of the election, which starts on Monday.

Your
Sarah Schaefer

DSA: EP changes expand the one-for-all law

By

Falk Steiner

The basic idea behind the Digital Services Act is simple: The DSA is intended to create uniform rights and obligations throughout Europe between users and various forms of providers on the Internet. And impose heavier burdens on providers in the process. On Thursday afternoon, the European Parliament voted 530 to 78, with 80 abstentions, in favor of the latest version after final amendments. “This vote gives Parliament the back-up to defend its position against the Council,” expects Andreas Schwab (CDU/EVP).

A key aspect of the DSA is the regulation of social media operators’ obligations. “In the future, there will be Europe-wide rules for reporting and deleting illegal content online, but also new rights for users in the event of unfair behavior on the part of the platforms,” says Tiemo Woelken (SPD/S&D), describing the regulation as adopted by the MEPs.

Alexandra Geese (Greens/EFA) sees it as a successful mix. “Platforms will be liable for their own behavior, not for the opinions expressed by their users,” said Geese. Combating systemic risks and protecting the right to freedom of expression is the balancing act that is being created here.

From the perspective of consumer advocates, the rights of users must now be consolidated in the trilogue. “Compared to the position of the member states, the parliamentary position is a remarkable step forward,” says Martin Madej, a consultant in the Digital and Commerce team at the Federation of German Consumer Organizations (VZBV).

DSA and national law: relations remain unclear

There is likely to be some debate about content regulation in particular. It has not yet been decided how the DSA will relate to national law, for example. Will providers have to remove all content from their platforms that is illegal under national law?

The German Network Enforcement Act (NetzDG) already proved to be a systematic blunder when it came to the question of which reports platforms are obliged to review: Not all, but only a specific catalog of predefined criminal offenses, are covered by the NetzDG. And since there is no European criminal law, the frame of reference in the DSA is always national. For example, incitement to hatred paragraph for the denial of the Holocaust, which is met with much approval in Germany, could become problematic if the Polish criminal code were to apply. The DSA has remained vague here, even in the parliamentary position.

And the question of whether the content of professional media should be treated equally to that of ordinary users once again stirred up debate. A motion by cultural and media politicians to exempt such content did not find a majority in the European Parliament. Many MEPs feared that a blanket exemption for professional media companies would open the door to misinformation campaigns by state media such as Russia Today (RT) or aggressive private companies like Breitbart.

Oliver Sueme from the Internet industry association Eco sees systematic reasons for not including a media exception in the DSA. The aim, he says, “must be to maintain a clear line and not to overburden the horizontal instrument with special regulations.” He, therefore, sees the rejection as positive and as a “good signal for the protection of democratic values and against disinformation on the net.”

Overlaps with other EU regulations

Andreas Schwab (CDU/EVP) does not consider the job done, even with the DSA: “As horizontal legislation for platforms of all kinds, it will require additional measures such as the proposal on regulations of political advertising and the law on freedom of the media.” In fact, it will likely take years for courts to finally clarify the interactions with other EU regulations after the DSA is passed.

The DSA parliamentary position also contains bold proposals in other areas that overlap with other regulations. For example, the parliamentarians have spoken out against a general ban on advertising based on data analysis. However, they at least want to exclude the use of sensitive data categories and also prohibit the processing of personal data for advertising targeted at minors.

Alien Mulyk, Public Affairs Officer EU and International at the e-commerce association BEVH, criticizes this as “absurd insofar as companies, in order to prevent such advertising from being shown to minors, first have to track that they are minors.” However, this could well have been the intention of the submitters – because this would cause a total ban through the back door.

Dark Patterns ban

Another parliamentary position is also likely to have a major impact in this context: A clear majority of MEPs voted in favor of a ban on so-called Dark Patterns. This refers to user misleading techniques that are intended to lead to consent, for example, in advertisement tracking. For example, pop-up windows in which certain options are barely recognizable or color-coding such as a green background. Such methods already keep courts busy. A DSA tailored to parliamentary tastes would outright ban them.

“Banning surveillance advertising altogether would have been a more effective strategy, but excluding the processing of sensitive data and Dark Patterns is certainly the second-best option,” says Jan Penfrat, Senior Policy Advisor at the European Digital Citizens’ Rights Association EDRi. The Federation of German Consumer Organizations also welcomes the amendments and hopes that the Parliament will be able to convince the member states in the trilogue.

Thomas Duhr, Vice-President of the German Association for the Digital Economy (BVDW), is not as pleased with the parliamentary plans. Some “very restrictive regulations have been adopted for online advertising that could harm the entire digital economy, as they create massive legal uncertainty.” Existing legislation on data and privacy protection would be circumvented, expanded, and ultimately ignored with these regulations. In some points, MEPs have used the Digital Services Act as a catch-all for any regulatory issues, Duhr criticizes.

The attempt at a one-for-all law affects very different sectors. The rejection of so-called stay-down obligations was primarily directed against automated filtering of already recognized infringements. For example, film or music use on social media platforms or cloud storage. This is considered susceptible to so-called overblocking.

Many points mentioned only in justifications

From the perspective of the German Markenverband, however, this also affects online marketplaces. They are to be subject to new obligations to verify the identification of vendors (“Know Your Business Customer”). However, consumer protection will remain full of holes “as long as counterfeits identified online can be uploaded again and again,” says Christian Koehler, CEO of Markenverband. During the trialogue, he said, the latter would campaign for the “notice and take down” principle and the anchoring of the KYOB principle in the articles of the DSA. As with many other points now envisaged by the EP, much is only mentioned in the explanatory memoranda. But in the actual legal text, the articles, some recitals are hardly reflected.

In the trilogue, consumer protectionists want to achieve tighter regulations, especially for the liability of online marketplaces, which also include compensation. Ursula Pachl of the umbrella consumers’ group BEUC is critical of the fact that – at the request of the industry committee – exemptions for small and medium-sized providers in the marketplace obligations were included in the parliamentary position. “This could mean that consumers could still buy unsafe products if they turn to smaller online marketplaces,” Pachl said.

A “differentiated approach that takes the diversity of content and services into account” is needed, says Bitkom CEO Bernhard Rohleder. The DSA would have to be “designed in such a way that it sets standards on a global scale“.

Mario Draghi: Italy’s dilemma

It’s been a year since Mario Draghi was entrusted with the task of stabilizing Italian politics amid a pandemic and a crushing economic crisis. Choosing a technocrat to lead the country was President Sergio Matarella’s last resort to avoid early general elections.

If Draghi were now to run for president himself, the country would possibly face renewed political turmoil. The 74-year-old would vacate the post of prime minister amid the implementation of the major EU-funded reform program, and a worthy successor is not in sight. The presidential election, which begins on Monday, is therefore also being watched closely in Brussels and other member states.

“I am simply a man, a grandfather if you will, in the service of institutions,” Draghi said in December, hinting that he would be willing to run for president. Sergio Mattarella (Partido Democratico) is not running for a second term. Draghi has all the qualifications to succeed him. However, if the former ECB chief were to become president, he would have to appoint a successor for the post of prime minister or call early elections.

For many, this poses a threat to the fragile government of national unity. Others believe that Draghi as president could exert a stabilizing influence on Italy’s turbulent politics over the next seven years.

Fragile government coalition threatens to break up

Mario Draghi’s current government is supported by the 5-Star Movement (M5S), Forza Italia, Lega Nord, PD, Italia Viva, and Article One. Draghi formed it at the height of the pandemic after incumbent Prime Minister Giuseppe Conte was forced out of office. The former ECB chief led the motley alliance with a firm hand.

But the election of the new president could break up the alliance. The 85-year-old Silvio Berlusconi has expressed his interest in running for president. He threatened that his Forza Italia party would leave the current coalition and force early parliamentary elections if Draghi moved to the presidency.

But the potential success of Berlusconi’s push is questionable. The media entrepreneur with a criminal record has been looking for allies by phone for weeks, apparently in vain. Deputy Vittorio Sgarbi has been contacting deputies and senators on behalf of the Cavaliere, as Berlusconi is also known. “La Repubblica” quoted him as saying that Berlusconi was sad and considering an honorable resignation. But the right-wingers (Lega, Forza Italia and Fratelli d’Italia) do not have another viable candidate at the moment.

So far, no one is risking revealing their cards, neither the potential candidates nor the political groups. On Monday, however, the voting will begin. The Italian president will be elected by the members of the Senate, the Parliament, and the regional delegates. Together they add up to 1009 voters, called “grandi elettori.” Next Monday, the deputies will meet in a joint session in Montecitorio and vote for the first time in secret by writing the candidate’s name on a piece of paper.

Tensions increase

Candidates must be supported by two-thirds to win the election. The hurdle drops to a simple majority when the election reaches the fourth round, with daily voting until the required quorum is reached. The election becomes increasingly difficult to navigate in its final stages, when loyalties sometimes change quickly and individual parliamentarians take advantage of the secret ballot to violate their group’s voting discipline.

Draghi’s political position is weakened by the fact that tensions are rising in his coalition. Two of the main parties, the 5-Star Movement and the Democratic Party, are at odds.

In both formations, with several ministers in the government, there are some who are betting that Draghi will stay where he is to complete reforms and ensure stability in the executive branch. Others, like PD Secretary Enrico Letta, are inclined to open the doors of the Quirinal Palace for the former banker to ensure national stability and international recognition. Draghi argues that the legislature will continue whether he is at the helm or not. Isabel Cuesta

Environment Council: Taxonomy resistance is forming

On Thursday, the first informal meeting of EU environment ministers under the French presidency began in the Amiens. Barbara Pompili, France’s Minister of the Ecological Transition, said she was pleased that there was agreement in principle among the member states on the planned carbon offset mechanism (CBAM). Now, it was a matter of discussing exactly how the instrument would be designed. The French government had announced its intention to make the CBAM a climate priority during its presidency. The energy ministers will also be present at the three-day meeting.

The heated debate about the taxonomy does not stop at this meeting. On Thursday evening, Spain, Austria, Denmark, and Luxembourg published a letter to the Commission opposing the classification of gas and nuclear power as sustainable. A common position on the matter will be taken at the Environment Council meeting, they said. The countries had previously announced that they would reject the draft taxonomy.

Federal government wants to take a stand

Germany is represented on the environmental dossier by Stefan Tidow, State Secretary at the BMUV. For the energy part, he is joined today by Sven Giegold, State Secretary at the BMWK. Tidow also commented on the taxonomy. Asked by journalists if he saw any chance of preventing nuclear power from being included in the taxonomy, he replied, “We’re not there yet.” He said the German government would first take a stand and make it very clear that it found the inclusion of nuclear power difficult. The Commission would then have to present its proposal, and then the question would be how to proceed.

Is the dispute over taxonomy putting a strain on Franco-German relations? “No, we have different interests, but that is quite normal,” Tidow replied. Nuclear power is not green energy, of course. It is not sustainable because the question of final storage is unresolved, and it is basically not economical either if you take into account the liability risk. The German government has a clear position on this.

Focus on climate package Fit for 55

According to host Pompili, the environment and energy ministers are to advance the legislative texts of the Fit for 55 climate package. In the meantime, most of the drafts of the EU Parliament’s rapporteurs for the package of measures to combat climate change have been submitted. But some of the individual instruments remain highly controversial. No decisions are made at informal meetings, but the scope for possible compromises is being explored.

On Thursday, however, the first item on the agenda was the problem of plant protection products and how the negative impact on biodiversity can be reduced. Here, there is criticism from the ranks of the member states that the European Food Safety Authority EFSA has not yet published any standards to which the national authorities could orient themselves. Also on the agenda was the EU Commission’s draft regulation for deforestation-free products, i.e., against “imported deforestation” from Brazil or Asia.

For the energy ministers, today and tomorrow will be about deepening the discussion on a response to high energy prices. So far, there is no consensus between the northern Europeans, who trust the market, and the southern Europeans, who are calling for joint initiatives. The joint meeting of environment and energy ministers is also expected to address the social cushioning of climate change and wood as a sustainable raw material and forest as a CO2 store. sti

Von der Leyen: Chips Act to come in early February

The EU Commission plans to present its draft legislation to promote the chip industry in Europe at the beginning of February. Commission President Ursula von der Leyen announced this at the World Economic Forum. Europe.Table had previously reported that the Internal Market Commissioner responsible, Thierry Breton, intended to present the proposal for the European Chips Act soon.

Von der Leyen said that the current dependence on a few producers outside Europe could no longer be afforded. To achieve this, the EU would have to “radically” change its approach. The initiative’s stated goal is to increase the EU’s share of global microchip production to 20 percent by 2030. The EU would have to more than double its share within a few years to achieve this. If the semiconductor market grows as forecasted, production capacities in Europe will have to more than quadruple by 2030.

The aim is to strengthen Europe’s position along the entire value chain. The European Chips Act, therefore, aims to promote research capacities as well as chip design and production. In order to channel investments to Europe, the authority will relax the state aid rules as announced and, for the first time, allow state aid for innovative “first of a kind” factories, von der Leyen said. In addition, the supply chains are to be monitored more closely in order to prevent acute bottlenecks in the future, as is currently the case. In addition, the aim is to improve access to skilled workers and financing for medium-sized companies in the sector.

Von der Leyen also wants to discuss a targeted division of labor with partners such as the USA. The goal is to “better balance” mutual dependencies. tho

EP rapporteur wants standard plug for more devices

The European Parliament’s rapporteur, Alex Agius Saliba, wants to mandate a uniform charging port for additional devices. The EU Commission had proposed obliging manufacturers of cell phones, tablets, digital cameras, and portable speakers, among others, to install a uniform charging cable connection in USB-C format. In his draft report, Agius Saliba (S&D) now proposes including e-readers, smartwatches, and in-ear headphones in the directive.

The initiative aims to end cable clutter among consumers and reduce electronic waste. The Commission estimates that about 11,000 tons of waste are generated annually in the EU from disposed and unused chargers. The standardized connectors are expected to reduce this amount by nearly 1,000 tons. In addition, electronic devices will no longer be sold with chargers as standard.

Agius Saliba wants to shorten the transition period for manufacturers compared with the Commission: They are to have only six instead of twelve months once the supplementary directive to the Radio Equipment Directive has come into force. Wireless charging is to be included in the regulation at a later date. Agius Saliba proposes here that the Commission should include whichever technical solution has become established by then by the end of 2025. tho

Study: ETS 2 useful but with deficits

The expansion of the European emissions trading system for buildings and road transport should not be the only driver for decarbonizing the two sectors. Rather, the ETS 2 must be embedded in a broad policy mix and binding national reduction targets, demand the authors of a study by the German Forum Ökologisch-Soziale Marktwirtschaft (internationally known as Green Budget Germany) and the Forschungsstätte der Evangelischen Studiengemeinschaft (FEST).

The EU Commission’s proposal to reform and expand the existing ETS was evaluated. This reform makes sense in principle, as CO2 pricing in the building and road transport sectors passes on the costs of climate damage to polluters and opens investment channels for climate-friendly alternatives for mobility and building heat, the study says. However, ETS 2 should be seen as complementary to “standards, public investment, and other market-based instruments” and as a warning indicator of the effectiveness or ineffectiveness of further climate policy measures.

The ETS 2 should not be a replacement for the so-called “Effort Sharing Regulation” (ESR), which sets greenhouse gas reduction targets for each country in those sectors not covered by the existing ETS. The authors conclude that ETS 2 is a tool to meet the ESR targets.

Minimum and maximum price for the ETS 2

Furthermore, the price control mechanisms, whose aim is to prevent highly fluctuating prices, are assessed as insufficient. Therefore, the authors propose both a price floor to ensure the effectiveness of the system for climate protection and a price cap to guarantee the social compatibility of CO2 pricing. The latter could be implemented via the Market Stability Reserve (MSR). This means that if the CO2 price in ETS 2 were to exceed the cap, surplus and unused emission allowances from previous years that were transferred to the MSR could be redeemed to lower the price.

The Social Climate Fund (SCF) is also seen as fundamentally positive, as it redistributes a substantial volume of ETS 2 revenues to poorer member states. However, the criteria under which member states receive money from the fund are unclear, according to the study commissioned by Germanwatch, CAN Europe, and WWF. They, therefore, call for improved governance structures that allow for a fair distribution of funds to particularly affected households. In addition, all revenues from the new ETS should flow into climate protection investments or compensation payments for EU citizens. luk

CO2 price for air traffic to come earlier

Airlines should pay for all of their CO2 emissions in Europe from 2026, a year earlier than initially planned by the EU, according to an early draft of the European Parliament’s position on the policy. This is what Sunčana Glavak (EPP), the rapporteur of the ENVI Committee in the EU Parliament for the extension of European emissions trading to air traffic, is proposing.

Currently, airlines still receive free CO2 allowances for more than 80 percent of their emissions in a kind of pilot phase. From 2024, airlines would lose 33.3% of their free CO2 permits, the draft said, rather than the 25% proposed by the Commission. From 2025, they would lose 66.6%, rather than 50%. Finally, in 2026, there would be no more free allocations. That would mean an extra 12 million CO2 permits are sold into the carbon market for polluters to buy, according to Suncana Glavak.

The Croatian MEP said airlines lack solutions to quickly cut their emissions and proposed that an EU innovation fund should help develop technologies to cut the sector’s emissions, including sustainable fuels and cleaner engines.

Strengthening CORSIA

Currently, only emissions from flights within Europe are covered by the EU carbon market, but flights to and from the EU are not. Those international trips are covered by a CO2 offsetting scheme set up by United Nations aviation agency ICAO, which becomes mandatory for countries in 2027 – the so-called Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

EP rapporteur Glavak demands that the EU should try to strengthen this system. CORSIA has been criticized by some countries and environmental organizations as ineffective in reducing CO2. If ICAO’s measures fall short of the EU’s climate goals, “other carbon mitigation options should be put in place,” the report said.

Last week, Peter Liese, rapporteur of the ETS reform, had announced that emissions from shipping would also be integrated into the ETS earlier than envisaged by the Commission. luk/rtr

Blinken: Russia border crossing would be act of aggression

Immediately ahead of the next round of top-level talks on a diplomatic solution to the Ukraine crisis, the United States has clarified that any border incursion by Russian troops would constitute aggression. Such an incident would provoke a “rapid, serious and joint response” from Western allies, US Secretary of State Antony Blinken said Thursday in Berlin after a meeting with German leader Annalena Baerbock. He said this included attempts at destabilization, such as through hybrid attacks or paramilitary actions.

Blinken thus clarified remarks made by US President Joe Biden. Biden had indicated Wednesday that minor aggression by Russia could result in a milder response from the West. Blinken will meet with Russian Foreign Minister Sergei Lavrov in Geneva on Friday.

Baerbock emphasized: “In the matter at hand, there is nothing less at stake than the preservation of the European peace order.” This “is existential for us, so we have no choice but to consistently stand up for it and protect it with a shield”. This also applies “if these measures have economic consequences for us”.

Baerbock and Blinken want dialogue

But she agreed with Blinken, “the only way out of the crisis is a political way, and this way leads only through dialogue,” Baerbock said. “Unfortunately, Russian behavior continues to speak a different language.” Every channel for talks must now be used. In this context, Baerbock welcomed the fact that NATO Secretary-General Jens Stoltenberg had invited to another meeting of the NATO-Russia Council. This was a “good and important signal”. It was also essential to revive the so-called Normandy format, to which Germany, France, Russia, and Ukraine belong.

At the virtual Davos World Economic Forum, EU Commission President Ursula von der Leyen also commented on the situation on the border with Ukraine: “If the situation gets out of control, if there are further attacks on Ukraine’s territorial integrity, we will respond with massive economic and financial sanctions,” von der Leyen said. “The transatlantic community is steadfast in this regard.” Russia’s attempt to divide Europe into spheres of influence is unacceptable. “If there are attacks, we are ready.” rtr

Twitter must disclose activities against hate speech in France

The US short message service Twitter must disclose details on what it does to tackle hate speech online in France. That was the decision of a Paris appeals court on Thursday, upholding the ruling of a lower court.

It upheld a ruling by a lower court last year that ordered Twitter to provide details on the number, nationality, location, and spoken language of people it employs to moderate content on the French version of the platform. The appeals court said it confirmed, in full, the first ruling and said Twitter should pay €1,500 in damages to each of six plaintiffs, a copy of the ruling seen by Reuters showed.

A Twitter spokesperson said the company’s top priority was to ensure the safety of the people using its platform, adding that the group was reviewing the court decision. The lower court decision also required Twitter to disclose any contractual, administrative, commercial, and technical documents that would help determine the financial and human resources it has deployed to fight hate speech online in France.

Global technology giants such as Twitter, Facebook, and Google have been accused of doing too little to address online abuse. In Germany, the Network Enforcement Act (NetzDG) has already been in place since 2018, under which platforms with large reach are covered and according to which punishable content must be quickly and consistently deleted from social media. rtr

Gunther Kegel: achieving climate targets with innovation

“We need to use energy more efficiently,” says Gunther Kegel passionately. His goal: “To be able to generate more as an economy with less power consumed.” Kegel is not an environmental activist but represents the German electrical industry as president of the ZVEI association. Based on the number of employees, it is Germany’s second-largest industrial segment. Kegel himself holds a Ph.D. in electrical engineering. The catalyst for his career was a Christmas present: “When I was nine years old, my grandmother gifted me an electrical construction kit. It included experiments that fascinated me.”

After completing his studies, Kegel joined Pepperl+Fuchs in 1990, a company that manufactures electronics for factory and process automation. He now heads the global player as chairman of the board. He enjoys his honorary role as association president, says Kegel. In ZVEI, he says, you can tackle important social issues: renewable energy sources, electric motors, automation. Kegel sees all of this as an opportunity to trigger change through technology.

“The light bulb is a great example,” says the 61-year-old. At the EU level, his association lobbied for a faster transition away from light bulbs and toward energy-saving illuminants. From Kegel’s point of view, a dual success: “If you approach such challenges with innovations, you have the better product for customers, which is more energy-efficient at the same time.” Climate protection, not through abolishment, but through innovation and market economy, this mechanism is pioneering, he says. ZVEI’s motto is: “Energy efficiency through electrification and digitization.”

No electricity tax for renewables

He considers the EU’s Fit for 55 legislative package to be both trend-setting and worthy of criticism – in some respects, he says, it is not ambitious enough. For example, the Electronic Manufacturers’ Association is calling for energy sources to be taxed solely on their greenhouse gas emissions. Renewables would then no longer be subject to electricity tax.

Why? “It has to pay off to invest in climate-friendly technologies – for the company and the individual”. If the CO2 price is to have an effect, it needs to be significantly higher, at 100 to 150 euros per metric ton. “Then, for example, a single tank of gas would cost 20 euros more, and that would make an impact on the pocket.”

With such market-based incentives, he says, people could be persuaded to change their way of thinking. For all his ambitions for transformation, however, Kegel also stresses that planability and continuity are important to him. “Things should not happen too quickly.” Europeans must now roll up their sleeves and plan how to achieve the goals they have set. “Politically, this is nowhere near as spectacular as the bold announcement of a Green Deal.” But: the actual work, the implementation, still needs to be done “And fast.” Paul Meerkamp