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Commission and member states to raise consumer concerns with app industry

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Event-iPadEurope's 'app economy' is booming. It employs more than 1 million people and is expected to be worth €63 billion in the next five years. According to the external app analytics platform Distimo, around 80% of the revenue – estimated at more than €10bn billion per year – of one supplier comes from purchases made by consumers from within an application by which consumers access special content or features, commonly called 'in-app' purchases.

For the app economy to develop its full potential and continue innovating, consumers need to trust the products. At present over 50% of the EU online games' market consists of games advertised as “free”, although they often entail, sometimes costly, in-app purchases. Often consumers are not fully aware that they are spending money because their credit cards get charged by default. Children are particularly vulnerable to marketing of 'free to download' games which are not 'free to play'. Following complaints from all over Europe, the European Commission is meeting today and tomorrow (27 and 28 February) with national enforcement authorities and large tech companies in order to discuss these concerns. Industry will be asked to commit to providing solutions within a clear timeframe so as to ensure proper consumer protection for apps customers.

Commission Vice President Viviane Reding, the EU’s justice commissioner, said: "Europe’s app industry has enormous potential, both to generate jobs and growth, and to improve our daily lives through innovative technology. For the sector to deliver on its potential consumers must have confidence in new products. Misleading consumers is clearly the wrong business model and also goes against the spirit of EU rules on consumer protection. The European Commission will expect very concrete answers from the app industry to the concerns raised by citizens and national consumer organisations."

Consumer Policy Commissioner Neven Mimica said: “Consumers and in particular children need better protection against unexpected costs from in-app purchases. National enforcement authorities and the European Commission are discussing with industry how to address this issue which not only causes financial harm to consumers but can also put at stake the credibility of this very promising market. Coming up with concrete solutions as soon as possible will be a win-win for all.”

At the meetings with the industry, national enforcement authorities across the EU will present their common understanding of how to apply the relevant consumer rules in this area. The action is led by the Danish Consumer Ombudsman. France, the United Kingdom, Italy, Belgium, Luxembourg and Lithuania, members of the Consumer Protection Cooperation (CPC) network in charge of enforcing consumer rights across the EU, will be participating to the meetings as well.

The four most important issues raised by consumers and which will be discussed at the meetings are :

  • Games advertised as 'free' should not mislead consumers about the true costs involved;
  • games should not contain direct exhortations to children to buy items in a game or to persuade an adult to buy items for them;
  • consumers should be adequately informed about the payment arrangements and purchases should not be debited through default settings without consumers’ explicit consent, and;
  • traders should provide an email address so that consumers can contact them in case of queries or complaints.

Next steps

The meetings are an opportunity for the Commission and member state authorities to reach a common understanding with industry to address the concerns raised by consumers. In any case, the European Commission, together with the national consumer rights enforcement authorities will continue to follow up with any necessary action.

Background

The EU market for online and mobile games and applications is booming. In 2011, consumers in the UK, Germany, France, Italy, Spain, Netherlands and Belgium are estimated to have spent €16.5bn on online games. According to an external study of Bitkom (an association representing the telecoms and ICT industry in Germany) in Germany alone revenues from in-app purchases doubled between 2012 and 2013 reaching €240 million. Over one million of the customers are children and teenagers aged between 10 and 19 years.

The EU Consumer Protection Cooperation (CPC) Regulation (EC N°2006/2004) links national consumer authorities in a pan-European enforcement network. Thanks to this framework, a national authority in one EU country can call on their counterpart in another EU country to ask them to intervene in case of a cross-border infringement of EU consumer rules.

The cooperation is applicable to consumer rules covering various areas, such as the unfair commercial practices Directive or the unfair contract terms Directive.

The principles on online games and in-app purchases which the UK Office of Fair Trading published on 30 January 2014 are consistent with this action.

More information

The Common Position of the national consumer enforcement authorities on consumer protection in games apps can be found here.

Homepage of Vice President Viviane Reding

Follow the Vice President on Twitter: @VivianeRedingEU

Follow EU Justice on Twitter: @EU_Justice

Homepage of Consumer Policy Commissioner Neven Mimica

Follow Commisisoner Mimica on Twitter: @NevenMimicaEU

Follow EU Consumer Policy on Twitter: @EU_Consumer

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Cheaper phone calls among EU countries, a reality from today

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From today, Wednesday 15 May, phone calls among EU member states will be cheaper thanks to the European Electronic Communication Code, adopted by the European Parliament in November last year.   

The new law, caps the price of calls at a maximum of 19 eurocents for both mobile and fixed calls (so-called ‘intra-EU calls’) and it also caps SMS at a maximum of 6 eurocents.  The adoption of this regulation was the next step after the EU abolished roaming costs in 2017, which already capped calls and texts to national rates while roaming in other EU countries.

Asked to comment, Vice-Chair of the Internal Market and Consumer Protection Committee MEP Dita Charanzová said:  “I am proud of what we have achieved for European consumers. Rates have been unjustly high for too long. We are one Union and there was no logical reason for these costs. I hope this will be the end of bill-shock in Europe.”

In addition to Intra-EU calls, the new law also includes more long-term and principled measures. Starting from 2020, every European citizen will have a right to an affordable broadband internet connection. The law requires each European country to ensure, through either a voucher or a social tariff, that low income or disadvantage citizens can afford an internet connection.

“Internet must be seen as a utility. Just as we would not deny access to electricity or gas or water, no one should be denied access to the internet just because they are disadvantaged,” added Charanzová.

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#Denmark commits to joining #EuroHPC Joint Undertaking

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Denmark has announced that it will become a founding member of the EuroHPC Joint Undertaking.

Map showing signatories to declaration and as list

Denmark has confirmed its commitments towards the European Joint Undertaking for High Performance Computing (EuroHPC JU), with the firm intention of joining this legal entity once it is formally adopted by the Council of the European Union.

The EuroHPC JU will pool European and national resources to establish a world-class high performance computing (HPC, also known as supercomputing) and data infrastructure, and a competitive HPC ecosystem, by acquiring and operating world-class high-performance computers and also by building in Europe key technology blocks (from low power processor up to systems architecture), software tools and applications. The aim is to put Europe in the HPC world top three by 2022-2023.

European Commission Digital Single Market Vice President Andrus Ansip and Digital Economy and Society Commissioner Mariya Gabriel welcomed the commitment made by Denmark: "It is with great pleasure that we welcome Denmark into this ambitious European initiative. By aligning our European and national strategies and pooling resources and knowledge, we will be able to develop European high performance computing technologies and applications and integrate them into a vibrant ecosystem.  The development of a world-class supercomputing infrastructure in Europe will allow a wide range of scientific and industrial users to access computing simulations and big data analysis. This will facilitate cutting-edge life science research for new drugs development and personalized medicine. Supercomputer capabilities will also help researchers in areas like weather prediction, climate modelling and renewable energy, to create, for example, models for how the wind moves around a wind turbine blade."

The Danish Minister for Higher Education and Science, Tommy Ahlers, added: "The rapid increase in volume of data creates new prospects for research and innovation, and it is vital for Europe to be a front-runner in this regard. We need to pool our resources in order to create the most viable and competitive solutions. High Performance Computing will be a central infrastructure for future research and excellent Danish scientists and businesses are ready to contribute to the development of this new ecosystem. I am pleased to sign the declaration making Denmark an establishing member state of the European co-operation on High Performance Computing. Personally, I am truly excited to follow the coming work of the EuroHPC."

The EuroHPC JU total budget is around EUR 1 billion. Half of the funding will be provided by the European Commission, and half by European countries. There will also be in-kind contributions from private partners. The goal of the JU will be to acquire systems with pre-exascale performance  by 2020, and to support the development of exascale (a billion billion or 1018 calculations per second) systems based on European technology by 2022-2023. It will also work to fostering applications and skills development and the wider use of high performance computing. The JU is due to begin operations before the end of this year.

Uses of high performance computing

High performance computing is already improving people’s lives in sectors such as healthcare, weather, clean energy, precision agriculture and cybersecurity. For example, in medicine, by using data processing technologies with information about a person’s genes, proteins, and environment to prevent, diagnose, and treat diseases, it is possible to provide better and personalised treatments at lower cost. Supercomputers are also used to support the discovery of new drugs or for understanding the functioning of the human brain and its diseases.

In cybersecurity and defence, supercomputers are used for developing efficient encryption technologies, understanding and responding to cyberattacks or in nuclear simulations; scientists also use their computing power to study climate change and for weather prediction. They can predict the path and the effects of devastating storms and can save lives and limit the economic consequences.

More information on the EuroHPC Joint Undertaking

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#Estonia joins European initiative to develop #Supercomputers

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Estonia has signed the European declaration on high-performance computing (HPC) with the aim to pool European and national resources to build and deploy world-class supercomputers that would be ranked in the world's top-three by 2022-2023. Digital Single Market Vice President Andrus Ansip attended the signing ceremony in Tartu, Estonia.

With this signature, Estonia marks its intention to join the European co-operation on supercomputing – the EuroHPC Joint Undertaking that was proposed by the European Commission in January. The vice president welcomed Estonia's signature and said: "Supercomputers are becoming the engine of our economy, fuelled by large amounts of data. The EU is currently lagging behind: we do not have any supercomputers in the world's top ten. This is why we have launched the EuroHPC initiative."

High-performance computing is needed to process ever larger amounts of data and help researchers make scientific breakthroughs in many areas from healthcare and renewable energy to car safety and cybersecurity. The EuroHPC Joint Undertaking, which is due to begin operations before the end of this year, will cover the whole value chain from technology components to systems and machines, and to applications and skills. It will offer expertise and training with a particular focus on helping small and medium-sized companies. The EU's contribution in the cooperation project will be around €486 million under the current EU budget, which should be matched by a similar amount from member states and associated countries.

Further details are available here.

More information on enhanced co-operation in the EU is available here.

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