Timmermans interview + Advice from Franc • Table.Briefings

Dear reader,

Since Sunday evening, Frans Timmermans has been at the COP26, and he wants to personally contribute to the success of the world climate conference. The Vice-President of the European Commission does not agree with the criticism after the first week: “Things have gone better than many expected,” he said in an interview with Timo Landenberger and Lukas Scheid. But of course, there are still many questions to be answered, he added. The EU and other industrialized countries also have a duty: “Developing countries must be able to rely on the fact that the rich countries are serious about solidarity“.

Some observers had not expected much new from Frances Haugen’s appearance in the European Parliament. But the former Facebook employee had prepared herself intensively and had concrete advice for the work on the Digital Services Act. This has “the potential to become the global gold standard,” she said. We analyzed below what exactly the whistleblower recommended to MEPs and whether this could lead to last-minute changes.

A special committee of the European Parliament has been dealing with the regulation of artificial intelligence since 2020. The final draft of its report is presented today; Falk Steiner has already had a look. Among other things, the authors call for strict liability for the operators of high-risk systems. Law enforcement agencies, on the other hand, should be allowed to exploit the potential to the full, including real-time face recognition. Conflict is par for the course.

Your
Till Hoppe

Frans Timmermans: “The CBAM has never been a contentious issue”

Frans Timmermans is Vice-President of the European Commission and responsible for the Green Deal.

Mister Timmermans, the second half of the UN climate conference has just started. What do you expect from this crucial week?

By the end of this conference, we want to be on track for the Paris agreement. That means that we stay well below 2 °C, and we still have a chance to keep 1,5 °C as a maximum rise of temperature level.

The aims are clear. But can they be achieved?

In the first week, things went better than many had thought. So there is more optimism than I would have expected. But it’s also clear that we still have to solve some major issues.

Such as?

We have to finish the rulebook. That includes the discussion about Article 6. Climate finance and the issue of adaptation is also extremely important. Developing countries need to see rich countries to be serious about solidarity. We need to reach the 100-Billion-Dollars that are promised, but the need for adaptation will increase. So we need a system beyond voluntary pledges.

In its own climate protection measures, the EU relies on its emissions trading system. How will you convince other states to follow?

China has already done that for its energy sector, and they plan to extend it to other sectors as well. Parts of the US have emission trading, and Canada also has a comparable system. They have realized: You can let the market do the work for you if you put an emission trading system into place.

For the others, the EU is planning a Carbon Border Adjustment Mechanism (CBAM). Some states have expressed their concerns already. Is the CBAM an issue here?

CBAM never came up as an issue. It is part of the discussion but mostly in a positive sense.

How so?

Countries want to know how it might affect themselves, but mainly they want to know how it works. What is very clear is: Every single country that wants to decarbonize will have to put a price on carbon. Then you have the risk of carbon leakage, and you have to find a way to avoid that risk. CBAM is such a measure.

A lot to talk about.

I arrived Sunday night, and since then, I already had several meetings with the Chinese delegation, I spoke to John Kerry, the delegation of Bhutan and New Zealand, and many more to come. That’s what we do here.

Haugen hearing in the EP: a Snowden moment for the DSA?

There have already been numerous interviews in the European Parliament that served more to promote themselves than to gain knowledge. The appearance of Facebook boss Mark Zuckerberg was one of them. Not so on Monday evening, when Zuckerberg’s most prominent critic, Frances Haugen, answered questions in the Internal Market Committee.

Many of the questioners showed serious interest in the assessments of the whistleblower, who has published thousands of internal documents. And the former Facebook product manager had concrete answers ready. Answers that concern the central EU legislative project for basic rules on the Internet: the “Digital Services Act”. The DSA is currently being intensively negotiated in Parliament and Council (Europe.Table reported).

It would not be the first time that revelations by a whistleblower have had a decisive impact on an important regulatory project: In 2013, Edward Snowden gave the negotiations on the General Data Protection Regulation a decisive boost.

Haugen’s verdict on her previous employer was scathing: “Every single day, Facebook puts its profits ahead of user safety,” she said. If lawmakers don’t step in, she said, nothing will change. With regard to the DSA, Haugen addressed a series of recommendations to the MPs:

Full transparency: Until now, Facebook’s functioning has been like a black box. To change that, external experts would have to be given full access to the company’s relevant data. Haugen strongly advises against unspecific exceptions in the DSA for trade secrets – Facebook would exploit these to declare everything possible a classified matter.
No restriction on illegal content: Moderation obligations should not only apply to illegal content, Haugen urges, but also to content that serves to disinform, manipulate elections or influence minors. Content, in other words, that is not allowed under the platforms’ T&Cs but is exempt from regulations such as the Network Enforcement Act.
No exemptions: The obligations should be comprehensive, Haugen demands. She strongly advises against exemptions for media content, as is currently being discussed: Almost every disinformation campaign uses fake news websites to spread its misleading content.
Comprehensive risk assessment: An assessment of societal risks by companies is not enough, nor is the assessment proposed by the Commission through auditing companies commissioned by the company, Haugen argues. “Auditors want to be reassigned,” she warns, and are therefore unlikely to look closely enough. Instead, Haugen proposes a three-step audit process: By the company itself; by involving a wide range of civil society organisations and experts who represent the diversity of society; and by published progress reports, complete with traceable statistics.
Strong oversight: Haugen strongly advises against delegating enforcement of the DSA to member states. There are few experts in the world who can assess companies’ algorithms and their impact, she said. Spread across 27 member states, she said, it would be hard to reach critical mass.
Against interoperability: Haugen warns against enshrining interoperability in the DSA or DMA, as called for by the S&D and the Greens/EFA, among others. The problem: If users wanted to delete their own content, such as photos that they had previously sent to their contacts (with other interoperable messenger services) via a messenger service, it would be very difficult to ensure that the photo was actually deleted from the servers of all services. This would require “extremely invasive regulation,” Haugen said.
Individual responsibility: So far, hardly anyone has rebelled against the abuses at Facebook, because no one has to fear being held responsible. Haugen therefore recommends naming people responsible for changes to the system. This would “radically change the culture at Facebook”.

Haugen’s philosophy with regard to online platforms: “Trust has to be earned first“. Her appearance is likely to strengthen those in the European Parliament who are pushing for particularly tough provisions in the DSA in the negotiations. These are mainly MEPs from the S&D, Greens/EFA, and the Left Party.

Some of the parliamentarians see themselves confirmed

The shadow reporter of the Greens/EFA in the Internal Market Committee, Alexandra Geese, sees in Haugen’s statement an important chance to revive the negotiations once again: “Frances is the shining light who opens the black box of algorithms at the right moment for European legislation,” she says. Geese is fighting for greater transparency for algorithmic systems. She advocates that access to data from “very large online platforms” for the study of systemic risks should not be limited to accredited researchers (Article 31) but should also be opened up to academics, NGOs, and journalists. Haugen’s plea for this could now give this demand more force.

Geese also sees the whistleblower as confirming her call for an independent European authority to be responsible for enforcing the DSA for “very large online platforms”. The Commission proposal attributes this role to national supervisory authorities (DSCs) and the Commission. Geese also points to a lack of competence and resources here. The demanded new authority should then also control the independent audits and risk assessments of the online platforms.

Tiemo Wölken, an S&D shadow rapporteur for the DSA in the Legal Affairs Committee, emphasizes the relevance of transparent recommendation systems: “We need to break the monopoly of the big platforms over our attention. To this end, I propose that third-party providers be allowed to offer their own recommendation algorithms for platforms so that the user decides what is important to them, not the platform itself.”

The Federal Ministry of Justice and Consumer Protection (BMJV), on the other hand, does not see any reason for amendments to the DSA bill due to the revelations. “The requirements of the DSA draft in terms of transparency and risk identification are quite promising,” says a BMJV spokeswoman at the request of Europe.Table. The “engagement-based ranking”, one of the core problems identified by Haugen, is already addressed in the DSA.

Influence on AI regulation and regulation of online political advertising

However, State Secretary Christian Kastrop shares the desire for more transparency for algorithms: “In some places, the DSA alone still falls short: When using artificial intelligence, it must be transparent and verifiable how the algorithms used by large platforms function,” he confirms. However, this transparency cannot be achieved by the Digital Services Act alone, but with clearer rules, such as those envisaged in the new AI regulation. He also agrees with Haugen’s recommendations regarding access to AI systems beyond approved researchers.

MEP Wölken can feel strengthened in his demand to tighten the AI regulation and not leave the certification to the companies themselves. The rapporteur in the Special Committee on Artificial Intelligence, Axel Voss (CDU/EPP), warns against leaving certification to the state alone: “The past has taught us that such a task massively overburdens public authorities on the one hand and on the other hand often leads to solutions that are hostile to innovation and alien to the market,” said Voss. The state and industry would have to cooperate closely in this area, but the basic principles of the free market economy would still have to be respected.

For Andreas Schwab, rapporteur for the Digital Markets Act (DMA), the whistleblower’s revelations also reveal the urgent need for regulation of political online advertising – beyond DMA and DSA. According to the current work plan, the Commission intends to present a legislative proposal to this effect on November 23rd. “We need strict rules on what kind of political advertising large online platforms are allowed to run, and we need more transparency on who pays for it,” Schwab said. Instruments that curb so-called microtargeting and psychological profiling in a political context are also particularly important, he said. There must be no “Cambridge Analytica 2.0”, in which personal user data is misused for political purposes, warns Schwab.

Listening to Haugen could mean delays

But can Haugen’s hearing before the European Parliament really become the “gamechanger” for a more progressive law, as many MEPs from the S&D and Greens/EFA would like? The political resistance is great – and some of the points raised were already considered to be conclusively discussed.

Wölken’s proposals, for example, which show many overlaps with Haugen’s recommendations, failed in the Legal Affairs Committee due to the opposition of the EPP, reports the Lower Saxon. “I really hope that the impressive revelations of Frances Haugen will lead to a rethink here. The proposals are on the table,” says Wölken.

Thierry Breton wants to act quickly

EU Internal Market Commissioner Thierry Breton, who met Haugen for the second time yesterday, stressed the importance of the revelations and specifically addressed the recommendation for individual responsibility: “Ultimately, the responsibility for a company’s actions lies with the CEO and the board of directors” – in other words: Mark Zuckerberg. The digital sphere is no exception.

Likewise, the Frenchman is putting pressure on not to lose any time now: “Speed is everything. We need the DSA/DMA package adopted in the first half of 2022,” says Breton. Against the backdrop of massive lobbying attempts by Big Tech, he stresses, “We will not allow corporate interests to compromise the more significant interests of European citizens.” Till Hoppe / Jasmin Kohl

AIDA report on AI: There is potential for dispute

The European Parliament’s Special Committee on Artificial Intelligence in the Digital Age (AIDA) is debating the final draft of its report today, available to Europe.Table. In it, the committee, which was established in June 2020, makes its recommendations for the future policy treatment of algorithmic decision-making systems. While many points are not very controversial, some recommendations are likely to hold great potential for debate.

The report is not sparing in its harsh European self-criticism. It says: “The EU does not meet any of the requirements to fully exploit the potential of AI, especially compared to […] China and the US”. There is a “lack of legal certainty, access, and sharing of high-quality data, harmonized rules, and standards, funding, research, skills and infrastructure for core technologies”. The EU needs to address this on several levels – with a clear legal framework, research funding, strategic coordination with allies, and many individual instruments.

Among other things, the final version recommends the introduction of a limited new liability mechanism for the operator. High-risk systems should be subject to strict liability with compulsory insurance; systems with a lower risk classification, on the other hand, should be subject to a presumption of deficiency at the expense of the operator.

Law enforcement should exploit AI potential

The AIDA Committee is also quite confrontational with other players on the issue of the use of AI systems by law enforcement agencies: It is crucial for the safety of citizens that the authorities are as far ahead as possible in AI development – which is why “the full potential of digital technologies for the prevention and prosecution of serious crime should be exploited through the use of real-time facial recognition in selected locations“.

The same applies, according to the draft report, to “carefully developed algorithms for crime prevention and investigation, based on high-quality data”. These could offer “a higher level of efficiency, neutrality and legal certainty than human law enforcement officers” and should therefore be supported.

However, many of the other recommendations are also likely to find their way into the legislative work on the AI Regulation. This includes, for example, the issue of cybersecurity requirements for AI products under the EU Cyber Security Regulation. Here, the authors suggest that national initiatives such as the BSI’s German AIC4 or the Maltese AI certification program should also be taken into account.

Overall, however, some of the report’s wishes are likely to remain unfulfilled – even within parliament’s own ranks: It is currently considered unlikely that the EP will be given an “ad hoc digital committee with legislative powers”, as is the recommendation to set up a European stock market index modelled on the NASDAQ. fst

Paris launches new push for energy market reform

In view of rising prices, the French government is once again pushing for changes in the European energy market. The wholesale market is functioning well, said Economy and Finance Minister Bruno Le Maire before a meeting of the Euro Group in Brussels. But the end customers, companies and consumers, must be better protected against rising prices.

France proposes three specific measures: An “automatic stabilization mechanism” is to ensure that the profits made by a producer when energy prices are high on the market have to be passed on to the supplier. The latter would then, in turn, pass these on to the end customers.

Secondly, companies should be able to conclude long-term supply contracts for five to ten years, according to Le Maire, which guarantee a supply of “renewable, decarbonized energy” at a fixed price. The government in Paris is likely to have nuclear energy not least in mind.

Thirdly, the same option should also be available for private households. Le Maire argued that the price of electricity should be decoupled from the price of fossil fuels. The latter would also become structurally more expensive, for example, through the addition of a CO₂ price.

Other member states, however, see the recent price trend as a temporary phenomenon and are skeptical of the push by France and Spain in particular. “I don’t think it will solve our immediate problems,” said Dutch Finance Minister Wopke Hoekstra. EU Economic Affairs Commissioner Paolo Gentiloni also expects the problem, and with it, the recent rise in inflation, to ease. The authority believes that “the phenomenon is a temporary one and is likely to subside in the first half of next year”. The commission will set out its view in its new economic forecast on Thursday. tho

France: CBAM as a priority of the Council Presidency

The French government intends to push the CO2 cap-and-trade mechanism vigorously during its presidency in the first half of 2022.

“CBAM will certainly be a priority during the French presidency,” said Secretary of State for Europe Clément Beaune at a conference of the EU Commission. Many member states support the project, which is intended to protect European steel producers from competition from other countries where there is no comparable CO2 pricing.

However, the extent to which the revenues from the border adjustment should flow into the EU budget is controversial, Beaune said. France would argue that the revenues should be treated as own resources of the EU. The same applies to an EU digital tax.

EU budget director-general Gert-Jan Koopman said the commission plans to present proposals on own resources by the end of the year. The EU is looking for new sources of revenue to refinance the bond-financed COVID reconstruction fund. tho

Anyone who has made it past the first round of security checks at the Scottish Event Campus in Glasgow is greeted by a large poster: “Welcome to the UN Climate Change Conference UK 2021”. Yet, the United Kingdom is not the sole host of the diplomatic summit on climate protection. Or about empty promises and greenwashing. Depending on whom you ask.

Co-host and as such conspicuously inconspicuous is Italy. And indeed, on closer inspection, the poster in question contains the small print: “In Partnership with Italy”.

A few kilometers of queuing and security checks later, the willing COP visitor is also robbed of his last hope that the southern European partner would at least have been able to assert itself in the culinary provision on the site.

For the price of five pounds, sloppy sandwiches are offered for sale. They can only be beaten by a bag of vinegar-flavored crisps. Even Barack Obama has noticed: During his visit to Glasgow, the 44th US president praised the negotiators for trying to achieve a breakthrough despite “weak coffee and bad food”.

Obama’s radius of movement at the COP was, however, predefined by his numerous fans and apparently did not lead him into Hall D to the pavilions of countries and organizations. The UN pavilion offers free barista cappuccino, and Qatar serves Arabic coffee with a good load of cardamom. The best caffeinated hot drink, however, is available from the Global Wind Energy Council. You can rely on the international community, after all. At least when it comes to coffee. Timo Landenberger and Lukas Scheid

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,

Since Sunday evening, Frans Timmermans has been at the COP26, and he wants to personally contribute to the success of the world climate conference. The Vice-President of the European Commission does not agree with the criticism after the first week: “Things have gone better than many expected,” he said in an interview with Timo Landenberger and Lukas Scheid. But of course, there are still many questions to be answered, he added. The EU and other industrialized countries also have a duty: “Developing countries must be able to rely on the fact that the rich countries are serious about solidarity“.

Some observers had not expected much new from Frances Haugen’s appearance in the European Parliament. But the former Facebook employee had prepared herself intensively and had concrete advice for the work on the Digital Services Act. This has “the potential to become the global gold standard,” she said. We analyzed below what exactly the whistleblower recommended to MEPs and whether this could lead to last-minute changes.

A special committee of the European Parliament has been dealing with the regulation of artificial intelligence since 2020. The final draft of its report is presented today; Falk Steiner has already had a look. Among other things, the authors call for strict liability for the operators of high-risk systems. Law enforcement agencies, on the other hand, should be allowed to exploit the potential to the full, including real-time face recognition. Conflict is par for the course.

Your
Till Hoppe

Frans Timmermans: “The CBAM has never been a contentious issue”

Mister Timmermans, the second half of the UN climate conference has just started. What do you expect from this crucial week?

By the end of this conference, we want to be on track for the Paris agreement. That means that we stay well below 2 °C, and we still have a chance to keep 1,5 °C as a maximum rise of temperature level.

The aims are clear. But can they be achieved?

In the first week, things went better than many had thought. So there is more optimism than I would have expected. But it’s also clear that we still have to solve some major issues.

Such as?

We have to finish the rulebook. That includes the discussion about Article 6. Climate finance and the issue of adaptation is also extremely important. Developing countries need to see rich countries to be serious about solidarity. We need to reach the 100-Billion-Dollars that are promised, but the need for adaptation will increase. So we need a system beyond voluntary pledges.

In its own climate protection measures, the EU relies on its emissions trading system. How will you convince other states to follow?

China has already done that for its energy sector, and they plan to extend it to other sectors as well. Parts of the US have emission trading, and Canada also has a comparable system. They have realized: You can let the market do the work for you if you put an emission trading system into place.

For the others, the EU is planning a Carbon Border Adjustment Mechanism (CBAM). Some states have expressed their concerns already. Is the CBAM an issue here?

CBAM never came up as an issue. It is part of the discussion but mostly in a positive sense.

How so?

Countries want to know how it might affect themselves, but mainly they want to know how it works. What is very clear is: Every single country that wants to decarbonize will have to put a price on carbon. Then you have the risk of carbon leakage, and you have to find a way to avoid that risk. CBAM is such a measure.

A lot to talk about.

I arrived Sunday night, and since then, I already had several meetings with the Chinese delegation, I spoke to John Kerry, the delegation of Bhutan and New Zealand, and many more to come. That’s what we do here.

Haugen hearing in the EP: a Snowden moment for the DSA?

There have already been numerous interviews in the European Parliament that served more to promote themselves than to gain knowledge. The appearance of Facebook boss Mark Zuckerberg was one of them. Not so on Monday evening, when Zuckerberg’s most prominent critic, Frances Haugen, answered questions in the Internal Market Committee.

Many of the questioners showed serious interest in the assessments of the whistleblower, who has published thousands of internal documents. And the former Facebook product manager had concrete answers ready. Answers that concern the central EU legislative project for basic rules on the Internet: the “Digital Services Act”. The DSA is currently being intensively negotiated in Parliament and Council (Europe.Table reported).

It would not be the first time that revelations by a whistleblower have had a decisive impact on an important regulatory project: In 2013, Edward Snowden gave the negotiations on the General Data Protection Regulation a decisive boost.

Haugen’s verdict on her previous employer was scathing: “Every single day, Facebook puts its profits ahead of user safety,” she said. If lawmakers don’t step in, she said, nothing will change. With regard to the DSA, Haugen addressed a series of recommendations to the MPs:

Full transparency: Until now, Facebook’s functioning has been like a black box. To change that, external experts would have to be given full access to the company’s relevant data. Haugen strongly advises against unspecific exceptions in the DSA for trade secrets – Facebook would exploit these to declare everything possible a classified matter.
No restriction on illegal content: Moderation obligations should not only apply to illegal content, Haugen urges, but also to content that serves to disinform, manipulate elections or influence minors. Content, in other words, that is not allowed under the platforms’ T&Cs but is exempt from regulations such as the Network Enforcement Act.
No exemptions: The obligations should be comprehensive, Haugen demands. She strongly advises against exemptions for media content, as is currently being discussed: Almost every disinformation campaign uses fake news websites to spread its misleading content.
Comprehensive risk assessment: An assessment of societal risks by companies is not enough, nor is the assessment proposed by the Commission through auditing companies commissioned by the company, Haugen argues. “Auditors want to be reassigned,” she warns, and are therefore unlikely to look closely enough. Instead, Haugen proposes a three-step audit process: By the company itself; by involving a wide range of civil society organisations and experts who represent the diversity of society; and by published progress reports, complete with traceable statistics.
Strong oversight: Haugen strongly advises against delegating enforcement of the DSA to member states. There are few experts in the world who can assess companies’ algorithms and their impact, she said. Spread across 27 member states, she said, it would be hard to reach critical mass.
Against interoperability: Haugen warns against enshrining interoperability in the DSA or DMA, as called for by the S&D and the Greens/EFA, among others. The problem: If users wanted to delete their own content, such as photos that they had previously sent to their contacts (with other interoperable messenger services) via a messenger service, it would be very difficult to ensure that the photo was actually deleted from the servers of all services. This would require “extremely invasive regulation,” Haugen said.
Individual responsibility: So far, hardly anyone has rebelled against the abuses at Facebook, because no one has to fear being held responsible. Haugen therefore recommends naming people responsible for changes to the system. This would “radically change the culture at Facebook”.