European Union:

The ‘Good Old’ Internal Market Order: The Industrial And Economic Agenda Of The von der Leyen Commission And What Businesses In Central And Eastern Europe Can Expect

December 2019 – The new European
Commission led by Ursula von der Leyen took office on 2 December.
Among the challenges it faces is the daunting task of restoring
Europe’s competitiveness and economic prowess by completing the
full integration of its internal market and strengthening
Europe’s industrial and technology base.

How Thierry Breton, the new commissioner in charge of shaping
and implementing the European Union’s industrial policy and
market regulations, plans to attain those objectives is summarised
in the overview below. For further insights on the von der Leyen
Commission’s economic and regulatory priorities, please refer
to our client briefing on the industrial, digital and competition
agendas of Executive Vice President for Europe Fit for the Digital
Age Margret Vestager (available
here).

1. The European Single Market at Full Speed

Commissioner Breton has explained his intention to push through
with the completion of a fully integrated internal marketplace
within the European Union by:

• Facilitating further the cross-border provision of services
  within the EU: As part of his portfolio, Commissioner Breton
  will have the powers for, and indeed intends to take actions
  toward, the full implementation and further enforcement of the EU
  Services Directive (including enhanced recognition of professional
  qualifications) and the new Digital Services Act, including by
  bringing up actions against Member States and fostering and
  encouraging coordination between the Member States’ national
  authorities with responsibilities in this area. The European
  Commission would strive to expand the recognition of professional
  qualifications to a wider range of occupations. In particular,
  Commissioner Breton would like to encourage the flow of
  IT/technology-based services, including from Central and Eastern
  Europe, across the European Union.




• Creating a more favourable regulatory environment for
  European SMEs and start-ups by regulating new forms of work to
  defend European SMEs and start-ups from unfair competition coming
  from US and Chinese tech giants; facilitating more access to
  capital; and ensuring better protection of know-how and
  innovation/inventions.




• Adopting a new Digital Services Act: One of the
  priorities of the European Commission is expected to be the
  adoption of a new Digital Services Act to upgrade the existing
  rules for online platforms, services and products.




• Continuing efforts to strengthen the implementation and
  enforcement of European internal market regulations,
  especially those concerning the protection of workers and social
  protection.

2. Technological Sovereignty

Commissioner Breton has extensive experience in the technology
sector, as he was until recently the CEO of the leading French IT
services provider, Atos, and is a former Chairman and CEO of France
Telecom. This background gives him insight into the challenges
facing European technology businesses and what the sector needs in
order to catch up with global competition. On Commissioner
Breton’s priority list are, most notably:

• Better connectivity across Europe: Commissioner Breton
  is expected to promote private investments while reducing the cost
  of rolling-out high capacity networks, including by possible
  revision of the Broadband Cost Reduction Directive.




• Deployment of 5G by the end of 2020: Mr Breton has
  pledged to work with the Member States towards allowing the use of
  the frequency bands required for the deployment of 5G wireless
  networks by end-2020 in accordance with the deadline set in the 5G
  Action Plan adopted by the European Commission in 2016.




• European quantum computing infrastructure: Mr Breton
  will support, by 2030, the development and deployment in the EU of
  a certified secure end-to-end quantum communication infrastructure
  based on the concept of quantum key distribution. Financial support
  will be provided to public-private partnerships engaged in the
  development and deployment of such infrastructure, which integrates
  satellite and terrestrial technologies.

3. Audio-visual Services

Commissioner Breton’s key priorities in this area
include:

• Convergence between content and distribution:
  Commissioner Breton intends to proceed with the implementation and
  enforcement of the amended Audio-visual Media Services Directive
  (AVMSD) as a way to promote the delivery of more and better
  European audio-visual content online. In particular, actions would
  be taken to ensure that European audio-visual content is present on
  the various media platforms, including video sharing platforms,
  with a 30 per cent quota (Mr Breton is in favour of measuring this
  quota by minute of content, not by number of titles available). EU
  financial programmes and instruments will be used to support the
  European media and audio-visual sectors to that effect.




• Liability obligations for video sharing platforms also
  under the E-Commerce Directive: The E-Commerce Directive will
  be amended to incorporate a liability framework for video-sharing
  platforms akin to those obligations under the recently revised
  Copyright Directive.




• Combat of illegal content online: As part of the
  overall regulatory framework of digital services under the new
  Digital Services Act, the European Commission will pursue efforts
  to further counter illegal online content (including possibly
  defamatory, fake news, or pirated).

4. Cyber Security

Robust information security underpins the proper functioning of
a digitalised European economy. Policy initiatives by the European
Commission in this are expected to include:

• A new Joint Cybersecurity Unit, which will ensure
  reinforced cooperation between the Member States, as well as a
  mutual-assistance mechanism, in cases of large-scale cyber
  incidents at the EU level. This mechanism would also support better
  enforcement and coordinated defence efforts at Member State and EU
  level.




• A review of the Network Information Security Directive
  at the latest by spring 2021.




• Mandatory cyber security certification of critical
  information and communication technology infrastructure, services
  and products, such as 5G or cloud computing.

5. Transition to European Green Economy

As part of the European Union’s agenda to mitigate the
impacts of climate change, Commissioner Breton will:

• Make transitional funds available for phasing out coal
  mining and coal-based energy generation, and for
  retaining/creating employment in the affected regions;




• Introduce a European carbon tax in order to ensure a
  level playing field between European businesses striving for low-
  or zero-carbon production and non-EU-based businesses manufacturing
  under less stringent carbon emission standards;




• Further diversification of energy supplies by adding
  more green energy (energy from renewable sources) into the energy
  mix, while taking a cautious approach to sourcing more gas supplies
  from outside the EU (e.g. Russia).

6. Human-Centric Artificial Intelligence

In the area of AI, Commissioner Breton can be expected to
advocate in favour of:

• Human-centric AI as the global standard for trustworthy
  technology: Commissioner Breton would push through a
  regulatory framework for the deployment of AI that is premised on
  human oversight and robust human involvement in ultimate
  decision-making.




• Common European data spaces: Commissioner Breton
  intends to sponsor the adoption of additional regulations and to
  promote the emergence of “common European data spaces” in
  order to ensure the availability, free flow and re-use of data for
  industrial and innovation purposes in different sectors.

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