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Commission to be sole enforcer of tech rules, EU countries agree

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Representatives from EU countries have agreed that the European Commission will be the sole enforcer of new tech rules, with a limited role for national antitrust watchdogs instead of the wider powers sought for them, officials said on Monday (8 November), writes Foo Yun Chee.

EU ministers will formally ratify the agreement on 25 November as part of the bloc's common position ahead of negotiations with EU lawmakers and the Commission on the draft rules known as the Digital Markets Act (DMA) before they can become law.

The DMA, proposed by EU antitrust chief Margrethe Vestager last year, aim to curb the powers of Alphabet (GOOGL.O) unit Google, Facebook (FB.O), Apple (AAPL.O) and Amazon (AMZN.O) with a list of dos and don'ts.

German and French antitrust watchdogs and their counterparts in the other 25 EU countries in a joint letter in June argued for a bigger role in enforcing the DMA and cited their expertise in digital cases. Read more.

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"The Commission is the sole authority empowered to enforce this Regulation," said an EU document agreed by a working group of the EU Council and seen by Reuters.

"In order to support the Commission, member states may empower competent authorities enforcing competition rules to conduct investigative measures into possible infringements of obligations for gatekeepers," the document said.

It said the EU executive shall have full discretion to decide whether to open an investigation.

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Digital economy

Joint CEO statement: 'Europe needs to translate its digital ambitions into concrete actions'

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We, the CEOs of Europe’s leading telecommunication companies, call on EU policymakers to closely align Europe’s digital ambitions with a supportive policy and regulatory ecosystem. Our sector is investing heavily to bring new digital networks to all Europeans: total telecoms investment has now reached €52.5bn/yeari in Europe, the highest in six years. We are innovating on top of our 5G, fibre and cable networks, with collaborative initiatives on Open-RAN, edge cloud and data-enabled services. We are taking decisive action on climate change by anticipating our own climate neutrality goalsii, but also by facilitating extensive ICT uptake: this can enable up to 15% reduction in CO2 emissions across the whole economy.

European political leaders have also stepped up their efforts for digital leadership. Having approved the 20% allocation to the digital transition in the Recovery Plan for Europeiv and supported this with ambitious EU Digital Decade targetsv , Europe is at a turning point. We now need concrete and immediate action to seize the opportunity and fuel further technological innovation and inclusivity. Europe’s global role cannot be limited to buying and regulating the technology built by others: we must create the conditions for homegrown digital infrastructure and services to thrive and set global standards that others can aspire to.

In order to achieve these shared ambitions, we call for action in three areas:
• A clear alignment between European digital leadership ambitions and competition policy. The positive signals on industry collaboration – ranging from network sharing to IPCEI projectsvi and other forms of cooperation – are important steps forward and should be reinforced. Building scale in the telecoms sector remains a priority, inside markets as well as across markets: this is in the strategic interest of the EU and its citizens.
• Strong political buy in to ensure that regulatory action fosters investment in gigabit networks, which will require €300bn additional investmentvii . Regulation must fully reflect market realities, now and in the future. Namely, that telecom operators compete face-to-face with services by big tech, in the context of vibrant markets. High spectrum prices and auctions that artificially force unsustainable entrants into the market must end. Recent ideas to alter a European Commission proposal by extending retail price regulation to international calls – a competitive market where many free alternatives exist – are at odds with the Digital Decade targets: we estimate that they would forcibly remove over €2bn revenues from the sector in a 4 year period, which is equivalent to 2.5% of the sector’s yearly investment capacity for mobile infrastructureviii . In addition, the ongoing policy work on reducing the cost of roll-out is of essence and should proceed speedily.
• A renewed effort to rebalance the relationship between global technology giants and the European digital ecosystem. Horizontal measures such as the Digital Markets Act play a crucial role and, for this reason, we firmly support them. In addition, we must also consider important sector-specific issues. Large and increasing part of network traffic is generated and monetized by big tech platforms, but it requires continuous, intensive network investment and planning by the telecommunications sector.

This model – which enables EU citizens to enjoy the fruits of the digital transformation – can only be sustainable if such big tech platforms also contribute fairly to network costs. Furthermore, we must ensure that new industrial strategies allow European players – including telcos – to compete successfully in global data spaces, so we can develop a European data economy that is built on true European values. Europe needs a strong telecom sector and ecosystems. We stand ready to help institutions to further shape a policy environment that accelerates digitalization to the benefit of all European citizens and businesses.

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Signatories: Thomas Arnoldner, CEO, Telekom Austria Nikolai Andreev, CEO, Vivacom Guillaume Boutin, CEO, Proximus Group Sigve Brekke, President and CEO, Telenor Group Joost Farwerck, CEO and Chairman of the Board of Management, KPN Alexandre Fonseca, Executive President, Altice Portugal Timotheus Höttges, CEO, Deutsche Telekom Philip Jansen, CEO, BT Group Allison Kirkby, President and CEO, Telia Company José María Alvarez Pallete, Chairman and CEO, Telefónica Nick Read, CEO, Vodafone Group Stéphane Richard, Chairman and CEO, Orange Group Urs Schaeppi, CEO, Swisscom

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Europe must work together to stay at forefront of high-tech - Merkel

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European countries must work together on next-generation chip manufacturing, Angela Merkel said, drawing on her 16 years of experience in the highest office to warn that no European country could stay at the forefront of high-tech on its own, write Andreas Rinke and Thomas Escritt.

The outgoing German chancellor told Reuters in an interview that the costs of moving to the next level in areas from chip development to cloud and quantum computing and battery production meant that the private sector would need state support.

Merkel herself conducted fundamental research in quantum chemistry in East Germany before entering politics after German reunification in 1990. She pointed to Korea, Taiwan and U.S. President Joe Biden's stimulus package as examples of what was possible.

"The state will have to play a significant role. South Korea and Taiwan go to show that competitive chip production in the 3- or 2-nanometer range, for example, is essentially impossible without state subsidies," she said.

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The global economy's current struggle to restore supply chains snapped by resource shortages and the coronavirus pandemic further highlights the need to ensure that Europe has its own production facilities in key areas, she said.

But she also lamented the failure of German companies to capitalise on an outstanding research base.

In particular, she said she was "shocked" at German companies' lack of interest in quantum computing, even though Germany was a world leader in research in a field that could make computers faster and more powerful than ever before.

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NO ALEXA FOR ANGELA

She said her government had made steps towards improving Germany's innovation and start-up cultures, pointing to a German-led project to create a secure and efficient cloud data infrastructure for Europe, named Gaia-X.

"But in the long term it cannot be the state that drives new developments," the European Union's longest-serving leader said.

Germany's sprawling, decentralised government structure could also be a hindrance to innovation.

Merkel said the presence of an ethics council and data protection officer in each of the 16 federal states put a heavy burden on firms in life sciences, for instance, where Germany had fallen behind.

It was, however, at the leading edge of research in areas such as quantum physics, climate research, physics, chemistry and robotics, she said.

Not that the same could be said for Merkel's own use of home technology.

"I’m happy enough when I can set up a delayed start on my washing machine, but beyond that, to be honest, I have neither the time nor the inclination to have my whole home remote-controlled," she said.

"Maybe I’ll develop an interest when I have more time in the near future."

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Digital economy

First calls for proposals under the Digital Europe Programme are launched in digital tech and European Digital Innovation Hubs

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The Commission has announced the first set of calls for proposals under the Digital Europe Programme. This follows the adoption of the work programmes allocating nearly €2 billion for investments aimed to advance on the digital transition. The calls are open to businesses, organizations, and public administrations from the EU member states, as well as entities from other countries associated to the Digital Europe Programme.

These grants will be targeted towards an investment of over €415 million in cloud to edge infrastructure, data spaces, artificial intelligence (AI), quantum communication infrastructure, in advancing people's digital skills, and projects that promote a safer internet, fight child sexual abuse, and disinformation, until the end of 2022. The first call for proposals is also opening for the set-up and deployment of the European Digital Innovation Hub (EDIH) network. These hubs will support private companies, including SMEs and start-ups, and the public sector in their digital transformation.  More information as regards applying for grants under this set of calls for proposals is available online. Further calls will be published in early 2022.

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