Brexit and European Elections

On Tuesday, April 18, U.K. Prime Minister Theresa May announced that she was calling a snap general election on June 8.  She explained that divisions in Westminster over Brexit had made an early vote unavoidable: “The country is coming together, but Westminster is not,” she told reporters outside 10 Downing Street.  The election was confirmed on the same day by a motion in the House of Commons.

Meanwhile, the EU-27 met several times at working level to consider the draft “negotiating guidelines” prepared by the Council secretariat.  These guidelines were then approved, with only minor changes, by the Foreign Ministers and then by the Heads of Government in a special meeting on April 29.  The strong degree of unity among the 27 EU leaders was highlighted by the fact that the final approval of the text took only four minutes (see here).

The main divergence of views was over the timing of the negotiation on the future relationship, which some wanted to start in parallel with the discussion on “the past”.  In order to reinforce this view, Denmark, Ireland and the Netherlands even held a mini-summit in The Hague on April 21. But the final text confirms the “phased approach” as proposed initially by the EU’s chief negotiator, Michel Barnier.

This issue and others were also discussed at a dinner in Downing Street on April 26, to which Theresa May invited Commission President Jean Claude Juncker and Mr. Barnier.  According to leaks to the press in Germany, this dinner was rather confrontational and confirmed the huge gap between the two sides’ positions at the start of the Brexit process.

As foreseen, on May 3, the European Commission presented its “recommendation” for a Brexit negotiating mandate (see here).  The aim is to have it approved by the 27 Foreign Ministers on May 22. The negotiation with the UK however will only start after the June 8 election, when the new British government is in place.

In the first round of the French election on April 23, Emmanuel Macron and Marine Le Pen were selected to run for the second round on May 7.  Several European political leaders, including German ministers, European Commission President Jean-Claude Juncker and Brexit negotiator Michel Barnier broke with tradition and either congratulated Macron or called on the French to vote for him.

Tech and Digital Single Market Policies

The Maltese MEP, Therese Comodini Cachia, rapporteur for the proposal for a new Copyright Directive in the Committee on Legal Affairs (“JURI”), finalized her report on March 10, 2017.  The JURI committee secretariat accepted suggested amendments from fellow MEPs on the JURI committee until April 12, 2017.  The JURI committee secretariat is now proof-reading and translating the amendments.  In early May, the JURI secretariat will share the amendments with Therese Comodini Cachia.  A vote on the report is expected in June or July 2017. See an overview with the expected timeline here.

On April 10, the European Commission’s Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs published a road map for its forthcoming policy paper on standard essential patents.  Roadmaps are high-level policy documents prepared by the Commission to explore whether EU level legislative intervention is required in a certain policy area.  According to the roadmap, the Commission expects to publish a Communication on standard essential patents by June 2017.  See the Roadmap on standard essential patents here.

On April 6, 2017, the European Parliament passed a resolution on the EU-U.S. Privacy Shield by 306 votes to 240.  The resolution outlines some of the concerns that MEPs have with the current Privacy Shield, as well as the type of document access that the European Parliament would like to have during the Privacy Shield review in September.  The narrow majority in the Parliament indicates that there is a growing hard line within the Parliament on privacy issues.  The adopted resolution is available here.

On April 4, 2017, the Article 29 Working Party issued an opinion on the draft ePrivacy Regulation.  Overall, the Article 29 Working Party welcomed the proposals, particularly with regard to consent, extended scope to cover Over-The-Top (“OTT”) communications and ensuring consistent fines with the GDPR.  However, the Working Party felt that the level of data protection was lower than the GDPR in certain circumstances and made various recommendations.  These include a prohibition on the processing of content and metadata of communications without the consent of both sender and recipient, except for specific purposes permitted by the Proposed ePrivacy Regulation, including security, billing and spam filtering purposes.  They also suggest an explicit prohibition of tracking walls and strengthened provisions on privacy by default and by design for terminal equipment and software. 

On April 24, 2017, the European Data Protection Supervisor (“EDPS”), Giovanni Buttarelli, published his Opinion on the proposed ePrivacy Regulation.  The EDPS opinion is in some respects more radical than the Article 29 Working Party opinion.  The current proposed ePrivacy Regulation uses the some of the same definitions as those proposed by the Commission in the draft European Electronic Communications Code (a separate Commission proposal for the comprehensive reform of telecoms laws), in order to ensure that traditional telecoms providers and so-called “OTT providers,” such as instant messaging and chat apps, are subject to the same regulations.  In his opinion, the EDPS argues that the ePrivacy Regulation should have separate definitions from the Electronic Communications Code.  The EDPS will present his annual report to the European Parliament on May 4, 2017. 

On April 11, 2017, the Parliament’s Civil Liberties Committee (“LIBE”) held its first hearing on the Commission’s draft ePrivacy Regulation.  The discussion focused on “privacy by design,” consent for children, privacy standards in Wi-Fi, cookies and tracking walls which block access to sites unless visitors accept cookies.  Rapporteur Lauristin plans to submit her report by June 22.  MEPs will then have an opportunity to debate the proposals and table their own amendments until June 28, 2017.

Looking ahead, the European Commission will publish its mid-term review of the Digital Single Market strategy on May 10, 2017.  The Commission is using this opportunity to encourage the Parliament and Member States to move forward on some key DSM initiatives that are currently held up in trilogue negotiations.  The review is also expected to outline some new Commission policies.  The final results of the Commission’s e-commerce sector inquiry are expected to be announced on the same day as the mid-term review is published.

Meanwhile, the European Parliament’s consideration of the proposed Digital Content Directive and reforms to contracts for online and other distance sales of goods has been delayed until the second half of 2017.   The Digital Content Directive would introduce rights for consumers in case an online game or music subscription they access malfunctions.   The proposals on online and distance sale of goods clarify consumer law for online shoppers buying across borders.  The Committee on Internal Market and Consumer Protection (“IMCO”) and the JURI Committee will now vote on the Digital Content Directive proposals on September 28, 2017 and the Plenary in early 2018.   Similarly, the proposals regarding online and distance sales of goods will now be voted on in the IMCO Committee on October 11 or 12, 2017, and in the Plenary in early 2018.

Communication and Media Policies

On April 25, 2017, the Internal Market and Consumer Protection Committee (“IMCO”) voted on the final compromise text for a proposed regulation on geo-blocking.  IMCO members endorsed the draft report by 30 votes to three, and four abstentions, and approved a mandate to open inter-institutional negotiations.

This vote follows a compromise brokered between rapporteur Róża Thun (center-right EPP group) and members of the center-left Socialists and Democrats group.  The amendments adopted will ban sites from blocking consumers from other countries, or automatically redirect them to domestic versions of a site.  See a press release from the European Parliament on the vote here

On March 20, 2017, the lead co-rapporteur for the draft Telecoms proposal Pilar del Castillo Vera (from the Committee on Industry, Research and Energy, “ITRE”) and co-rapporteur Dita Charanzová (from the IMCO Committee) published their draft reports (see both reports here).  They are now accepting suggestions for amendments from fellow MEPs in the IMCO and ITRE Committees, which will then be voted on.  The European Parliament’s position on the European Electronic Communications Code dossier is led by the ITRE Committee, but the IMCO committee has significant input into the process.  The proposals have been controversial in the Parliament, will likely be amended significantly.  Meanwhile, in the Council, the Member States discussed their draft position on the telecoms reform on April 26, 2017.

The Council is considering the Commission’s proposals to update the Audio Visual Media Services Directive (“AVMSD”) and the Maltese Presidency has set a deadline of the end of May 2017 for agreement on a position in the Council on the proposals.  The Council last met on April 26, 2017 to discuss their position.  Their draft report expands the scope of the AVMSD to include social media companies, apparently following pressure from France.

Meanwhile, on April 25, 2017, the European Parliament’s Culture and Education Committee voted on their report on the AVMSD proposal.  The two German co-rapporteurs, MEPs Sabine Verheyen and Petra Kammerevert, released their reports in September 2016, proposing, inter alia, levies on video platforms, 30 % quotas for European content, and advertising restrictions.  More than 1,300 amendments were tabled to the original Commission proposal published in May last year.  The report will now be placed on the draft agenda of Parliament for vote without amendment on May 15, 2017.  The Council plans to adopt its general approach on May 23, so that trilogue negotiations at inter-institutional level can start in June under the Maltese Presidency.

Energy and Environment Policies

May 31, 2017, is the last day on which manufacturers and importers of chemicals and mixtures containing them can pre-register their substances under the EU REACH Regulation 1907/2006. The REACH Regulation requires manufacturers and importers of chemicals, on their own, in mixtures, and in certain cases in articles, in quantities of one ton or more per year, to register their substances before they manufacture or market them in the EU/EEA.  However, the Regulation continues to allow manufacturers and importers to pre-register their substances by May 31, 2017, under certain conditions.  They must have started manufacturing or importing such so-called “phase-in” substances that are not Category 1A and 1B carcinogenic or mutagenic substances, or substances toxic to reproduction (“CMRs”), in quantities between 1 ton and 100 tons per year.  Pre-registration is rather simple, and will allow manufacturers and importers to delay the submission of their full registration dossiers until May 31, 2018, and to avoid the prior inquiry process.

Internal Market and Financial Services Policies

On April 25, the European Commission introduced the “European Pillar of Social Rights.”  This is a set of 20 principles relating to equal opportunities, access to the labor market, and social protection and inclusion, aimed at improving working and living conditions in Europe.  The principles focus on achieving objectives enshrined in the Treaties for a highly competitive social market economy, full employment and social progress.  The Pillar was created to serve as a reference against which Member States may examine their performance, and to prompt national reforms where necessary. The Commission intends for the Pillar to be used as a compass for all Member States working towards the goal of better working and living conditions in Europe.  The principles will be discussed with the European Parliament and the Council, with the intention of releasing a joint proclamation by the EU institutions.  See the 20 Principles of the European Pillar of Social Rights here;  a press release here; and Q&A here.

On April 18, the European Commission launched a public consultation on the structures of excise duties applied to alcohol and alcoholic beverages.   This comes as it considers a revision of Directive 92/83/EEC (see here) to support small drinks producers and combat the sale of dangerous counterfeit alcohol.  The objective of the current Directive is to ensure the proper functioning of the internal market by preventing trade distortion, ensuring fair competition, and reducing administrative burdens on businesses.  In December 2016, the Economic and Financial Affairs Council (“ECOFIN”) asked the Commission to execute the studies necessary to prepare a revision of the Directive.  After the consultation closes, the Commission will prepare a synopsis report of the consultation results and an Impact Assessment, scheduled for publication in Q4, 2017.  The consultation will be open until July 7.  See further information on the consultation here, and the consultation survey here.

Life Sciences and Healthcare Policies

As outlined above, the European Parliament’s Culture and Education Committee (“CULT”) adopted its report on the proposed revision of the Audiovisual Media Services Directive on April 25.  Some MEPs had tabled amendments to the proposal to include strict rules against advertising of “unhealthy” foods and drinks (similar to those that apply to tobacco products) and even a strict ban on advertising for such products.  However, the CULT Committee rejected these amendments.  Instead, Members of the CULT Committee adopted a less stringent approach towards the industry.  They called on the EU Member States to work with the food and drink industry to prepare voluntary rules to reduce children’s exposure to audiovisual advertising for foods and drinks high in sugar, salt and fat.  The Parliament’s position on the proposal should be subject to a vote in plenary in the course of May.

In the course of April, the European Medicines Agency (“EMA”) published a new policy on “How EMA handles allegations of improprieties received from external parties.”  This policy sets up a new whistleblowing mechanism which allows persons outside the EMA to report any improprieties in their specific field.  Improprieties include deviation from good practices and standards that could impact the assessment and supervision of drugs, in fields such as clinical trials, and the manufacturing of drugs.  A specific email address has been created (reporting@ema.europa.eu), allowing reporting on a confidential basis.  Following such a report, the EMA can either launch an investigation or refer the matter to the competent national agencies.  The EMA’s Decision that outlines the new policy can be found here.

In early April, the EMA published a framework program to strengthen the cooperation between the EMA and researchers.  The framework includes an action plan for the upcoming three years.  The EMA seeks to: (i) educate academia about its role and powers to enhance academia’s trust in and engagement with the EMA; (ii) ensure that the best scientific research and expertise are provided to support regulatory guidance, advices, and decisions in regulatory processes, as well as to generate effective evidence; (iii) strengthen collaboration with academia to develop regulatory science to embrace innovative progress. 

Trade Policy and Sanctions

At the opening of the Hannover Fair, on April 23, German Chancellor Angela Merkel said that she had felt “very reassured” that the United States would consider reviving the TTIP negotiations, following her visit to Washington in March.  However, a week later, Trade Commissioner Cecilia Malmström said that the U.S. and the EU were not yet ready to make a decision on whether to resume the talks: “We both need a bit more time to see where we are,” she said, after meeting with Commerce Secretary Wilbur Ross and other members of the Trump administration.

On April 28 to 29, the EU Foreign Ministers held their biannual informal “Gymnich” meeting in Valletta.  The main topic discussed was the future of enlargement negotiations and the relationship with Turkey after the Turkish referendum of April 16. The Commissioner responsible for accession negotiations, Johannes Hahn, had called on the ministers to consider “a new format” for relations with Turkey.  Austria – which happens to be the Commissioner’s home country – also called loudly for an end to the accession negotiations.  However, they did not rally their colleagues to these views, which would have put at risk the difficult agreement concluded with Turkey last year about migration from Syria.  The focus in Ankara is rather on the upcoming negotiations for an upgrade of the Customs Union between the EU and Turkey.

EU Permanent Representatives agreed on May 3 on a new methodology for calculating anti-dumping duties on goods produced under market distortions.  The new methodology was proposed last year by the European Commission to make the EU’s trade defense instruments compatible with China’s market economy status.  The new methodology, which should be formally approved by EU trade ministers on May 11, bases anti-dumping tariffs on proof of market distortions, without differentiating between market and non-market economies.  Italy had expressed serious reservations to the compromise first reached in the Council.  To bring them around, it was agreed that only some but not all the EU criteria traditionally used to define non-market economies would be reflected in the final text.