Tech Brief - Commission scores double wins at top EU court, Draghi on tech

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“There would have been no Apple tax case had it not been for a formidable team. I was ready to face the loss, but it was the win that made me cry.”

Story of the week: Apple must pay a €13 billion tax bill as per a ruling from the European Court of Justice (ECJ) on Tuesday (10 September), which experts say gives weight to Ireland being dubbed, by some, a "tax-safe haven." Read more.

Don't miss: Tech took centre stage in Mario Draghi’s long-awaited report on European competitiveness, released on Monday. "Europe must become a place where innovation flourishes, especially for digital tech," said Draghi at the Commission’s press conference. His recommendations include a massive investment push, deeper EU integration and numerous targeted reforms to accompany enhanced competitiveness. Read more.

Also this week:

First AI Board meeting. On Thursday (12 September), the first meeting of the AI Board took place, where member states discussed the implementation of the AI Act. The AI Office presented its work thus far on the scientific panel, the codes of practice for general-purpose AI, and other implementation steps. Poland, Austria, and Spain shared their national governance model plans according to an agenda.

AI Factories get rolling. The Commission launched a call for expression of interest for setting up AI Factories, data centres specialised in AI training and development, on Tuesday.

Employee revolt on California AI bill. Over 100 current and previous employees at OpenAI, Google DeepMind, Anthropic, Meta, and xAI signed an open letter urging California Governor Gavin Newsom to approve the controversial SB 1047 bill. This came despite both Meta, OpenAI and Google Deepmind publicly opposing the bill. SB 1047 introduces mandatory safety testing and transparency requirements to prevent large-scale risks for AI models trained on more than $100 billion (€90 billion). Read more

Bumble’s AI plans. The dating app Bumble is expanding its use of AI to stay competitive amid shifting dating trends among younger users. At the Goldman Sachs annual technology conference, Bumble CEO Lidiane Jones revealed new AI-powered features, including tools for photo selection, conversation assistance, and profile creation, TechCrunch reported on Tuesday.

New OpenAI model. OpenAI released its new 'o1' and 'o1-mini' AI models designed to improve reasoning and problem solving. These models, available in ChatGPT and its API, include enhanced safety features, with more updates and features planned for the future, the company announced on Thursday.

New Mistral AI model. French AI startup Mistral released its first model that can process images and text, called Pixtral 12B, TechCrunch reported on Wednesday.

Google loses CJEU antitrust case. The Court of Justice of the European Union (CJEU) on Tuesday upheld the European Commission’s €2.42 billion fine against Google over allegations it abused its dominant position in the search engine market. The 14-year-old case, now put to rest, saw the tech giant hit with the regulatory’s second-ever largest antitrust fine. Read more.

Google’s new US antitrust trial. On Monday, a new antitrust trial started in Virginia, United States, over Google’s advertising tools. The trial began a day before the confirmation of a fine related to Google Shopping and only a month after US Columbia’s District Judge Amit Mehta declared its search engine an illegal monopoly.

Fight against in-game purchases. On Thursday, the European Consumer Organisation (BEUC) and 17 organisations accused the world’s biggest video game companies of "purposefully tricking" consumers, including children, to push them to spend more. Video Games Europe, Europe’s video games lobby, responded by citing a survey claiming that children’s spending decreased from €39 to €31 between 2023 and 2024. (Read more)

Cyber-espionage groups taken down. Polish authorities successfully dismantled a cyber-espionage group linked to Belarusian and Russian intelligence services, which had been conducting malicious activities in Poland, said the country's Minister of Digital Affairs Krzysztof Gawkowski on Monday. Read more.

Microsoft summit. Microsoft held a summit on Tuesday to address cybersecurity improvements after a July IT outage caused by a faulty CrowdStrike update, which impacted millions of Windows devices and disrupted major industries. The event highlighted the risks of relying on single-vendor security solutions, with Delta Air Lines pursuing legal claims against CrowdStrike and Microsoft, Reuters reported on Wednesday. Microsoft is also investigating a potential outage affecting users on AT&T networks, with around 21,000 reports of Microsoft 365 outages and possible issues with its Azure cloud service, Bloomberg reported on Thursday.

Question marks around X-DPC deal. Despite the conclusion of the Irish Data Protection Commission’s (DPC) court proceedings against social media platform X, questions about its AI data practices and compliance with EU data protection laws remain. Court proceedings by the Irish DPC against X ended last Wednesday after the company agreed to permanently stop processing some personal data for training its AI tool, Grok. Read more.

Irish DPC launches Google inquiry. The Irish Data Protection Commission (DPC) launched a cross-border inquiry into Google’s handling of EU citizen’s data for its AI model PaLM2, questioning the tech giant’s compliance with privacy laws, the watchdog announced in a press release on Thursday. The Irish Commission is looking into whether Google should have conducted an impact assessment of the processing of personal data before starting the activity, said the DPC. Read more.

France fines company for health data processing. France's data protection agency CNIL fined health tech company CEGEDIM SANTÉ €800,000 for processing health data without proper authorisation, the authority said on Thursday.

DMA workshops about Google. Google’s efforts to fully comply with the Digital Markets Act (DMA) remain insufficient, travel and hospitality organisations attending two European Commission workshops this week, told Euractiv. Several European companies related to travel and hospitality participated, discussing Google’s latest compliance solutions concerning trains and flights on Tuesday and hospitality on Wednesday. Read more.

DMA-GDPR interplay. The Commission and the European Data Protection Board (EDPB) are collaborating to clarify how the DMA and the General Data Protection Regulation (GDPR) interact, ensuring consistent application for digital gatekeepers, the Commission shared in a press release on Tuesday. A High-Level Group was formed to provide guidance, focusing on data-related and interoperability issues.

Draghi and (the lack of) innovation. While Italian technocrat Mario Draghi may have accurately diagnosed the EU’s competitiveness problems in his long-awaited report, his cure lacks spark, experts say. Innovation and tech took centre stage in the report, but many concrete proposals left experts underwhelmed. “The analysis is really good, but in terms of recommendations, many remain too incremental within the existing system,” Professor in Management, Strategy and Innovation and Bruegel Senior Fellow Reinhilde Veugelers told Euractiv. Read more.

AWS and data centres. Amazon Web Services (AWS) announced plans to invest £8 billion (€9.5 billion) in the UK over the next five years to build and maintain data centres, expected to contribute £14 billion to the UK’s GDP by 2028 and support over 14,000 jobs, Reuters reported on Wednesday. The UK government welcomed the move and is in talks with AWS about further investments across the country, the article said.

Vestager’s victories. EU Antitrust Chief Margrethe Vestager is concluding her term with major victories as the European Court of Justice ruled against Apple’s Irish tax arrangements and Google’s anti-competitive practices, marking a triumph for tax justice and fair competition. But can these rulings influence future EU policy as the current executive vice-president for A Europe Fit for the Digital Age and Competition prepares to leave office in November? Listen here.

Crushing competition. At Google's antitrust trial, prosecutors presented evidence showing a 2009 goal to "crush" rival ad networks, supporting claims that Google sought to monopolize the ad tech market. Google denies the accusations, citing competition from companies like Microsoft, Amazon, and Meta, Reuters reported on Thursday. If found guilty, Google may be forced to sell its Ad Manager platform, the article said.

Consumer groups v video games. Europe’s BEUC umbrella consumer rights group on Thursday filed a complaint with the European Commission, with support from member organisations in 17 European countries including France, Germany and Italy. The groups said companies behind games such as Fortnite, EA Sports FC 24 and Minecraft are guilty of “manipulative spending tactics” involving in-game virtual currencies, which they said children “are even more vulnerable to”.

China’s LinkedIn practices. China poses a fundamental threat to Euro-Atlantic civilisation and is using various channels, including LinkedIn, to establish contacts and gain influence and know-how, the Czech Security Information Service (BIS) has warned in its latest report. Through LinkedIn, Chinese intelligence services use “cover profiles of employees from fictitious consulting or headhunting companies, most commonly based in Singapore or Hong Kong,” to approach Czech academics, the report warns. Read more.

Draghi supports consolidation. Large EU telecom companies and smaller consumer associations and tech firms are divided on the findings of Draghi’s report, published on Monday, which sounded the alarm on the state of EU telecoms competition policy. "This is the third report – following the Commission’s white paper in February, and Enrico Letta’s in April – sounding the alarm over the state of technology, modern connectivity and digitalisation in Europe," Vodafone’s Chief External Officer Joakim Reiter told Euractiv on Monday, calling for urgent regulatory action from the Commission. Read more.

EU think tank challenges Draghi and Letta. The Centre on Regulation in Europe (CERRE) has challenged the recommendations of Letta and Draghi for the EU telecoms industry, in a report released on Thursday. CERRE’s report calls for a de-politicised debate around telecoms deregulation. Read more.

Draghi report welcomed by largest telecoms, bashed by Big Tech. Telecom associations GSMA and Connect Europe (formerly ETNO) welcomed the Draghi report and called EU politicians for action on Wednesday, including the need for the telecom sector "to scale and to regain its competitiveness." A piece by Big Tech lobby association CCIA Europe’s Head of Office Daniel Friedlaender yet bashes Draghi’s recommendations on telecoms, considering that "propping up old incumbents to the detriment of the rest of the value chain does not make any sense" if EU politicians want to stimulate growth and competitiveness.

Ericsson, Nokia support for investment in telecoms. Nineteen European CEOs, including CEOs from Ericsson, Deutsche Bank, Renault, Siemens and Nokia, urged the European Commission to do more in supporting investment in connectivity and digitalisation in an open letter published by Ericsson on Tuesday. The signatories support the Commission’s white paper, Letta and Draghi report findings and call Commission president von der Leyen to "swiftly create the conditions for a major increase in network investment," explaining that otherwise"the entire European industrial fabric will suffer."

ETNO becomes Connect Europe, changes director. On Monday, ETNO officially changed its name to Connect Europe and unveiled the name of its proposed new director-general: Alessandro Gropelli, who worked at ETNO for 10 years, including six as deputy DG. Gropelli’s new position should be confirmed during the next general assembly in early November in Lisbon. These changes do not seem to include policy priority changes for this association of the largest EU telecom operators.

[Edited by Martina Monti]

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