Public Affairs Roundup April 09

Dear IAB Europe colleague,

This month’s newsletter brings you updates on the Telecoms Package, the Digital Consumer event organised by DG SANCO at which IAB Europe President was a speaker and recent developments on behavioural advertising.
 
As a general update on the upcoming EU changed, a new European Commission will be selected in 2009, though it is not yet clear which Commissioners will be seeking a second mandate and when exactly the new Commission will come into force. A new Commission President will be selected immediately after the European elections in June, with José Manuel Barroso seeking re-election. Barroso has strong support in the European Council but the impact of the financial crisis has put his definite re-selection in some doubt. Also, some of the current Commissioners may decide to run in the Parliament elections. A second referendum in Ireland on the Lisbon Treaty is scheduled for October 2009 and it is possible that the current Commission will be extended until after the result: the Swedish Presidency has already announced its European council summit will be held on 5th - 6th November, much later than normal. The uncertainty surrounding the Commission’s length of term has also been voiced by the Swedish Minister for EU Affairs Cecilia Malmström. Sweden shall take on the EU Presidency on 1st July and concerns have been raised over the Commission’s effectiveness during the latter half of 2009.  The extension would allow the current group of Commissioners to oversee the institutional changes resulting from the vote, but Brussels political analysts have warned that such an extension could create a ‘lame duck’ administration as the majority of the Commissioners will not be reappointed once the current term ends.   

The Greens/European Free Alliance group of the European Parliament have formally announced their opposition to the re-appointment of José Manuel Barroso as President of the European Commission. The group’s ‘Stop Barroso!’ message was revealed at the launch of their 2009 election campaign manifesto on 27th - 28th March. The Greens made clear their negative opinion of Barroso’s term as Commission President and called on the Socialist group (PES) to propose a credible replacement.

You may recall that the balance of power at the Parliament was shaken up since British conservatives announced their decision to leave the EPP-ED group. On 29th March, Italian Prime Minister Silvio Berlusconi’s centre-right party Forza Italia officially merged with the right-wing Alleanza Nazionale to form a new party called Il Popolo della Liberta (The People of Freedom). The new rightist bloc should be a powerful player in Italian politics for the foreseeable future and will also wield significant power in the new European Parliament after the 2009 elections in June. Il Popolo della Liberta is set to be the largest national delegation in the EPP-ED grouping and Berlusconi has already informed the other national groups in the EPP-ED that he will back MEP Mario Mauro to become the next President of the Parliament.

Save the date!
The Data Protection Directive (95/46/EC) is under review in order to update it to address developments in new technologies. Following the disbanding of the group of experts, Commissioner for Justice, Freedom and Security, Jacques Barrot opted for a deeper consultation process.

As part of this, on 19th-20th May, stakeholders from Europe and beyond will discuss how to ensure that the right to personal data protection is fully respected, particularly in the light of recent technological developments.
For the programme click here: http://ec.europa.eu/justice_home/news/events/conference_dp_2009/draft_programme_en.pdf

For any questions, do not hesitate to contact us: publicaffairs@iabeurope.eu

Giovanna Fumagalli
Public Affairs IAB Europe

1. Update on the Telecoms Package
2. SANCO event on profiling
3. First EU Consumer Summit
4. Commission on behavioural advertising
5. ALDE group launches European Civil Liberties Day -15th April
6. European Conference on ‘Safer Internet for Children’ adopts Prague Declaration
7. 2nd Open Forum on Alcohol and Health, 30th April 2009, Brussels
8. Developments on Consumer Protection and Collective Redress
9. Commission proposes new strategy to combat cyber attacks and disruptions
10. ICOMP Conference on Privacy and Competition in the Online Marketplace  
    

1.    Update on the Telecoms Package

On 5th May the Parliament should vote on the three reports on the Telecoms Package in Plenary and on 12th June, the Council should adopt its final opinion on the second reading, at its telecom ministerial meeting. This will end the review of the Telecoms Package, put forward by the Commission in November 2007.

On 31st March, the IMCO committee adopted the Harbour report on the Telecoms Package, which recommended opt-in for cookies.

The final negotiations on the review of the Telecoms Package, including the ePrivacy directive 2002/58/EC, have become ever more intense in the last few weeks as agreement had to be reached before the upcoming Parliament elections in June and meetings have taken place almost daily. As you know, the review of the Telecoms Package is currently in Second Reading in the European Parliament.

Two issues on which the Parliament and Council found it difficult to agree, are the storing and accessing of cookies (amendment 84) and action against piracy and illegal downloading.

On cookies, the Parliament won the day. MEPs have been pushing for opt-in for cookies, whereas the Council was generally not in favour, although in the end decided not to jeopardise agreement over the whole Package and agreed ambiguous wording.

IAB Europe and other media and advertising trade associations, such as EPC, Fedma, EACA, WFA, EuroISPA, ENPA, FAEP, AIG,  joined forces in order to try to convince MEPs and Perm Reps that cookies are paramount for the functionality of users’ internet experience and an opt-it would hamper business activities online without increasing consumers’ privacy levels.
Continuous efforts to persuade MSs MEPs and Commission led to improvements but not the clarity we wanted to support and opt-out approach for cookies.

Following 11 trialogue meetings, and the final deal was struck on 28th April. During a Coreper I (Committee of Permanent Representatives) meeting on the 29th April, the Member States gave their consent to the deal.

For more information visit: http://www.eu2009.cz/en/news-and-documents/press-releases/czech-presidency-wraps-up-eu-telecoms-package-19103/

2.    SANCO event on profiling

On 31st March, IAB took part in an expert roundtable on data protection, profiling and targeting, organised by DG SANCO to discuss with stakeholders dangers and advantages of technological practices used in online advertising. A non-paper drafted by DG SANCO was used to kick off the debate. Stakeholders’ comments on the non-paper should be published by the Commission in May 2009.

Consumer Commissioner Meglena Kuneva delivered the keynote speech. Kuneva stressed that the digital world offers consumers opportunities and benefits, yet mistrust of the internet is widespread and users need to have confidence online. While she appreciates that online advertising is the backbone of the internet economy for it funds the digital space, she said that EU consumer policy needs to adapt to the existence of online profiling and should focus on privacy policies, commercial communications and price discrimination.

Kuneva also warned companies that the Commission is prepared to ‘get tough’ and will crack down on businesses which target vulnerable online consumers and do not do enough to prevent personal data abuse. Kuneva stressed that individuals’ online data including website visits and purchases is being routinely used without their knowledge. Highlighting social networking sites, she pointed out that website privacy policies are not always easy to access and can be unclear and called for ‘principles of transparency, clear language, opt-in or opt-out options that are meaningful and easy to use’.  Privacy enhancing technology can be highly effective as long as consumers understand it.

She called for more dialogue and a balance between business and consumers interests, and invited industry to develop a framework for consumer policy principles. Kuneva also warned that behavioural online targeting will become increasingly pervasive and stated that the key issue is to transfer traditional consumer principles to the digital world. Finally, she said that although regulatory progress has been made at EU level, more is needed, especially on data collection and profiling.

Representatives of the industry explained that online advertising is still in an early stage and that more privacy-sophisticated services are under development. Consumer trust is key to the industry, which needs to build on consumer control and business transparency, through various means, such as more efficient self-regulation and better enforcement of existing legislation.

Ms Jacqueline Minor, Director Consumer Affairs, chaired the policy workshop on consumer challenges and opportunities in the digital world, in which the following points were raised: need to define terms of behavioural advertising; protection of children from targeted advertising; greater understanding needed on data mining; empowerment of consumer through transparency of information.

Karin Riis-Jorgensen, Chair of the European Privacy Association, welcomed Commissioner Kuneva’s statements on safeguarding online user privacy and targeted advertising. She added that Directives 95/46 and 2002/58 bear precise criteria, that operators must inform users clearly before they enter a service, and ask for permission to use personal data for marketing and commercial purposes. Ms. Riis-Jorgensen further believes that operators should not retain personal data for longer than 6 months.

The outcomes of discussions fed into the European Consumer Summit, which took place on 1st and 2nd April and was attended by stakeholders, regulators, MEPs representatives of consumer associations and of the industry.



3.    First EU Consumer Summit

On 1st and 2nd April, the Commission organized the first European Consumer Summit in Brussels, focused on consumer rights in the digital market place. On the panel on Digital Issues, IAB Europe President, Alain Heureux spoke about the need to create internet advertising guidelines and standards in Europe.

Robert Madelin, the Director General of DG SANCO, chaired a conference aimed at listening to the concerns of real consumers from all over Europe. Many consumers spoke of their negative experiences online. The main concerns were: need for appropriate market surveillance – and how to properly enforce existing rules; problems of registering, too many passwords; delivery delays; cross-border purchases online and language issues; Legal uncertainty: who consumers turn to, to protect their rights. An official EU consumer website has been set up to continue the discussion: www.gimmetheinfo.eu/

Mr Madelin summed up the session stating that most online concerns were also reflected in the offline consumer world. Unique online concerns will have online solutions, it is just a question of deciding who will lead the search for these solutions. Consumers should be educated and sensitised about threats and dangers – and should pay more attention to websites privacy notices.

At the European Consumer Summit it was revealed that almost one third of EU citizens shopped online in 2008. The most popular categories for online EU shoppers were travel and clothing. 25-34 year olds was the most active internet shopping age group while countries such as Denmark, the United Kingdom, the Netherlands, Germany, Sweden and Finland had the highest percentage of online shoppers. http://europa.eu/rapid/pressReleasesAction.do?reference=STAT/09/43&format=HTML&aged=0&language=EN&guiLanguage=en

For more information about the summit click here: http://www.european-consumer-summit.eu/



4.    Commission on behavioural advertising

On 14th April Information Society and Media Commissioner Viviane Reding announced that the Commission opened infringement proceedings against the UK following complaints by internet users about internet service providers’ (ISPs) use of the behavioral advertising technology of the digital company Phorm, along with Commission discussions with UK authorities. In April 2008, British Telecom admitted using Phorm’s technology without informing its customers and carried out a new trial in October 2008, prompting many complaints.

The Commission declared that the British Government’s way of implementing both Data Protection Directive (95/46/EC) and the E-Privacy Directive (2002/58/EC) had structural problems. The proceeding concerns the UK’s implementation of the EU e-Privacy and personal data protection rules which state that users’ online data must be kept confidential and no details can be intercepted without a user’s consent. The Commission has since written several letters to the UK authorities to find out how the EU laws were being implemented.

The UK has now two months to reply to the Commission’s Formal Notice Letter. Should the UK’s reply not be satisfactory, the case will be referred to the European Court of Justice.

An overview of telecoms infringement proceedings is available at:
http://ec.europa.eu/information_society/policy/ecomm/implementation_enforcement/infringement/

Click here for the full press release:
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/09/570&format=HTML&aged=0&language=EN&guiLanguage=en

On the same day, Viviane Reding reaffirmed her commitment to defending EU citizens’ online privacy. Talking about new technologies such as behavioural advertising on social networking sites and Radio Frequency Identification (RFID), the Commissioner stated that a person’s information should only be used with prior consent. The EU Directive on privacy and electronic communications reflects this sentiment and 17 major social networking sites are to report back to the Commission later this month on how they plan to tackle safety online, with particular focus on child safety.

Click here for the full article:
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/09/571&format=HTML&aged=0&language=EN&guiLanguage=en

A survey carried out by professional services group KPMG has shown that UK consumers do not mind watching internet and mobile advertising if in return they get free content such as videos and music. Sixty per cent of those polled said they would rather watch online adverts and receive free content instead of paying for that content, while only 16 per cent would rather pay and avoid the adverts. 40 per cent of those polled would watch ads on their mobile phone in exchange for free music. The figures suggest that advertising will prove more fruitful than subscription-based business models for internet and mobile content companies. However, the survey showed that UK consumers were reluctant to pay for e-books, online photo storage or social networking tools for their mobile phones, while 67 per cent said they were uncomfortable with using their mobile for financial transactions.



5.    ALDE group launches European Civil Liberties Day -15th April

The European Parliament’s Alliance of Liberals and Democrats (ALDE) group launched the first European Civil Liberties Day on 15th April.

The event, organized by ALDE MEP Alexandro Alvaro, is part of the group’s campaign for the protection of human rights and fundamental freedoms. Speakers at the launch included: ALDE leader Graham Watson MEP, who criticized governments’ attempts to restrict liberty and privacy rights of citizens; Michal Musil from the European Newspaper Publishers’ Association (ENPA), who spoke out against the Czech government for excessive restrictions on press freedom for journalists; Ian Brown from EDRI-member FIPR and the Open Rights Group, who criticized member states for turning the EU into a ‘surveillance society’, called for the strengthening of data protection rules and urged MEPs to continue fighting to safeguard citizens’ personal rights.

ALDE’s civil liberties campaign can be found at: http://civiliberties.eu/



6.    European Conference on ‘Safer Internet for Children’ adopts Prague Declaration

On 20th April, the Czech Ministry of the Interior and the European Commission held a conference entitled ‘Safer Internet for Children – fighting together against illegal content and conduct on-line’ in Prague.

The focus was how to improve cooperation between all stakeholders involved in safer internet promotion and mobile communications, especially concerning children. At the end of the conference the ‘Prague Declaration’ on this issue was adopted. Improved cooperation between member states will allow Interpol and Europol to better identify child pornography activity, while industry associations, ISPs, mobile telephony providers and social networks all have a role to play in raising internet awareness among children.

At the conference, the Commission called on mobile operators to do more to protect children using mobile phones by putting in place the measures laid out in a voluntary code of conduct agreement, signed by 26 operators across the EU in 2007.

The Safer Internet Programme has launched a new website. Draft call for proposals are now available under the section entitled “Funding”.

The EC has published a text of the proposal for a revised version of the Framework Decision on combating sexual abuse, click here for the full text:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2009:0135:FIN:EN:PDF :



7.    2nd Open Forum on Alcohol and Health, 30th April 2009, Brussels

The second annual Open Forum within the European Alcohol and Health Forum framework will take place in Brussels on 30th April. It will be an opportunity for all interested parties to exchange information and discuss current issues and will provide an overview of the European Alcohol and Health Forum's work and actions, along with an update of regulatory developments at national, EU and international level.

Click here for a draft programme:
http://ec.europa.eu/health/ph_determinants/life_style/alcohol/Forum/docs/open300409_ag_en.pdf

More information and registration details are available at:
http://openforum.alcoholandhealthmeetings.eu/pro/fiche/quest.jsp;jsessionid=81EB30DFD3B09A1EB771E79543B22ED2.kl1



8.    Developments on Consumer Protection and Collective Redress

On 2nd April the IMCO committee organised an inter-parliamentary meeting on Consumer Protection Law, its future developemtns and its transposition, implementation and enforcement.

Consumer Protection Commissioner, Meglena Kuneva participated to the event. Not surprisingly, most Member States are not very keen on giving up their own consumer protection legislation in favour of a EU acquis. MEPs and national parliamentarians called for more in-depth analyses of each article of the current Commission’s proposal and their effects at national level, which could also include reducing current consumer protection. The work on this directive will continue with the new Parliament after the summer.
  
The plenary of the European Parliament has adopted a Resolution on a White Paper on Damages Actions for breaches of the EU’s antitrust rules, thus refusing to accommodate a US-style system of collective redress. The Parliament stressed that individuals must be reimbursed for any harm suffered but rejected the idea of a system of opt-outs, financial incentives to go to court and a complaint industry. The Parliament, which wants to focus on out-of-court settlements and avoid excessive damages payments, warned the Commission that it must ensure compliance with EU competition rules and must act to strengthen EU cartel authorities.



9.    Commission proposes new strategy to combat cyber attacks and disruptions

On 30th March the European Commission unveiled a new strategy to help protect Europe from cyber attacks and disruptions. The goal of the Critical Information Infrastructure Protection 2009 initiative is to prepare the EU for major attacks or disruptions, in view of recent serious attacks on networks in Estonia, Lithuania and Georgia. The Commission calls for action to protect critical ICT infrastructures and warns that differing approaches and capacities across the member states is a real danger. All stakeholders are asked to focus on preparedness, detection, recovery, transnational cooperation and the establishment of Europe-wide criteria for ICT infrastructure. The Commission invited the European Network and Information Security Agency (ENISA) to support the initiative by establishing dialogue and cooperation between all actors in the sector.

The Commission’s Communication on Critical Information Infrastructure Protection:
http://ec.europa.eu/information_society/policy/nis/strategy/activities/ciip/index_en.ht m

In a video posted on her website on 27th April, European Commissioner for Information Society and Media Viviane Reding called on the EU member states to act to ensure Europe’s electronic communications networks are well protected and resilient to possible cyber attacks. Reding, who warned that a one-month internet interruption in Europe would cause at least €150 billion of economic losses, stated that there are wide variations in member states’ approaches and capabilities to react to a network breakdown. She described the EU’s agency for network and information security ENISA as a platform of information exchange only, not a real headquarters for cyber attack defence, and called for the appointment of a ‘Mister Cyber Security’ to lead the way. An EU meeting on cyber attack prevention will take place on 27-28 April in Tallinn, Estonia.

The full press release and the video message are available at: http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/09/199&format=HTML&aged=0&language=EN&guiLanguage=en

The Council of Europe warns that while the development of data processing systems and networks is beneficial for society, it makes it vulnerable to increased organized crime: terrorism, pornography, illegal trafficking and fraud can all develop thanks to the ease of new communication tools. The Council of Europe Convention on Cybercrime, open to signature by non-European countries, is the only binding international treaty on the subject.

Click here for the Council of Europe cybercrime homepage:
http://www.coe.int/t/dc/files/themes/cybercrime/default_en.asp



10.    ICOMP Conference on Privacy and Competition in the Online Marketplace

On 27th April a Conference on Privacy and Competition online took place in Brussels. Auke Haagsma, a Director of ICOMP, opened by immediately distancing the conference and forthcoming debate from any Microsoft bias. He animatedly set the scene for productive discussion on the relationship between privacy and competition law online.

Jackie Minor, from DG SANCO, replaced Director-General Robert Madelin as the Commission representative, who was unable to attend due to the Swine Flu outbreak. She gave a clear and open account of the Commission’s current position on the online privacy debate. She said that there are many similarities between the on- and offline world, but the importance of trust online is a far more difficult issue.

She highlighted three main areas which the Commission is looking at:

• Privacy notices – whether they are easy to understand and to find.
• Emergence of new technology – Behavioural Advertising – Consumer associations have been highlighting the threat of potentially illegal techniques such as price discrimination.
• Data Protection  – Not just personal details, but also purchasing habits, interests, weaknesses. The question was whether current regulation address this.
  

She concluded that business models are still evolving, consumers are giving mixed messages and that further research was needed before the Commission could make any concrete decisions. Using “Commission-speak”, she said that it was initially necessary for them to frame ‘a problem statement’ before conducting an ‘impact assessment’.  A blog is being set up to continue the debate and DG SANCO officials are due to meet with the Federal Trade Commission in Washington in the coming months to take ideas from their approach to privacy online. Ms. Minor also announced that a stakeholders' group on data protection may be set up in the future.

Sophie in’t Veld, Dutch MEP, spoke about her concern not only with private companies holding large amounts of data, but also when this data is transferred to public bodies. She questioned governments’ ability to know what to do with such swathes of information. She said there should be an open public debate about online privacy, and not one just between economists and civil servants.

Javier Celaya, CEO of DosDoce, Porta Cultural, Spain, spoke about current privacy problems in today’s online world. He cited Terms & Conditions as a key area which needed greater attention and potential regulation as many T&Cs on foreign sites are not binding. Social networking sites should do more to have high privacy settings as a default and, as they advertise in many countries, they have a responsibility to respect the privacy in all of the local areas in which they operate.   Andreas Font Galarza, former EC senior competition official and now competition lawyer with Mayer Brown LLP, said that data protection was a policy issue. He called for a better legal understanding of the dynamics of the online market.

Professor Peter Squire, former chief counsellor for Privacy under President Clinton centred his keynote speech on privacy and anti-trust and argued against the assertion that privacy should not form a part of competition law. Swire said that, he sees privacy as a fundamental right and therefore one which cannot be ignored in any legal debate.  David Wood, ICOMP Legal Counsel, spoke about competition law as one of the few legal areas which is harmonised throughout the world. He touched on the blurring of price competition and non-price competition in the online sphere. Whereas prices are instantly comparable, it is much harder to distinguish between the currency of data or unique visits.