EU Policy Update, August 2017: Tech and Digital Single Market Policies; Communication and Media Policies; Energy and Environment Policies; Internal Market and Financial Services Policies; Life Sciences and Healthcare
The annual G 20 summit took place on July 7 and 8 under the presidency of Angela Merkel in the city of Hamburg, which had been put under siege by violent anti-globalization demonstrations.
Tensions on trade issues and the rejection of the Paris agreement on climate change by the U.S. President, Donald Trump, made it particularly difficult for the international community to present a united front. The U.S. remained isolated in renouncing the climate change agreement, whilst the 19 others reconfirmed their commitment. On trade, the 20 leaders stressed that they would “continue to fight protectionism including all unfair trade practices and recognize the role of legitimate trade defense instruments in this regard”, a compromise language designed to accommodate the American position. On both issues, the EU representatives took the lead, the free trade agreement just concluded with Japan having symbolically confirmed the strong EU commitment to free trade.
The second round of the Brexit negotiations, from 17 to 20 July, did not make much progress, as the British side did not present its position on what was supposed to be the main topic on the agenda, the financial settlement. However, constructive discussions allowed the two sides’ positions on citizens’ rights to get closer. The negotiators also started to discuss the complex issue of quotas in the existing trade agreements between the EU and third countries, as well as an agreement on a joint UK-EU proposal on WTO “schedules”. The next round will start on August 28. It was suggested by some on both sides to add a round in between, but deep divisions inside the UK government discouraged such zeal. The main divergence expressed publicly at the end of the month centered on the transition period and whether the Norway model might be used during that period, as recommended by the business community. On July 31, Prime Minister Theresa May put an end to the speculations by having her spokesperson confirm that “free movement will end in March 2019”, which will require that the UK leave the internal market by that date.
In mid July, in Poland, the ruling Law and Justice party (“PIS”) rushed three laws through parliament aiming at increasing the political control over the judiciary: one would give the Parliament control over the body that appoints judges (the “KRS”); the second would force all Supreme Court judges to step down unless asked to stay by the Justice Minister (who is also the Attorney General); the third would allow the Justice Minister to dismiss and nominate the heads of lower courts. Mass protests erupted in Warsaw and other cities. Surprisingly, the Polish President, Andrzej Duda – who had so far followed PIS positions – announced he would veto the first two laws, signing only the third. The European Commission immediately sent Poland a third “recommendation” under a EU procedure monitoring breaches to the rule of law. Following the publication of the new Law on the lower courts, it also launched an “infringement procedure” which may result in the filing of a lawsuit against Poland at the Court of Justice of the EU, seeking financial penalties for alleged breaches of EU law, including on the equal treatment of male and female judges (see Commission press releases here and here). Commission Vice President Timmermans hinted also that Article 7 of the Union Treaty (which would suspend Polish voting rights in the Council of the EU) might be triggered if the new version of the two other laws president Duda promised to present “as soon as possible” continue to be in “systemic” violation of the rule of law. However, Hungarian Prime Minister Orbán has stated he would veto any action under Article 7, which requires the unanimous agreement of all other EU Member States.
July was the first month of the Estonian presidency of the EU Council, which runs until the end of the year. Estonia is a small but very dynamic Member State. Its advanced position on e-government, cybersecurity and technology in general should help make progress in the implementation of the EU Digital Single Market agenda.
Tech and Digital Single Market Policies
The European Parliament’s Committee on Civil Liberties, Justice and Home Affairs (“LIBE”) sent a delegation to Washington, D.C., from July 17 to 21, to obtain up-to-date information on the state of play and progress in the U.S. on topics of concern to the Committee. These include the U.S. implementation of the EU-U.S. Privacy Shield – particularly important, given the upcoming review of the EU-U.S. Privacy Shield – and issues around digital privacy and electronic communications, law enforcement access to data, cybercrime, and counterterrorism. The MEPs stated that, as it stands, they believe the Privacy Shield does not meet EU privacy standards. This introduces an element of doubt as to whether the deal will survive the scrutiny of EU courts unless both EU and U.S. officials use the annual review scheduled for this September to introduce additional safeguards.
On July 19, the French Conseil d’État (the Supreme Court for Administrative Justice in France), referred several questions to the Court of Justice of the European Union (“CJEU”) for preliminary ruling on the territorial scope of the “right to be forgotten”. The “right to be forgotten” was recognized by the CJEU in its Google Spain judgment of May 13, 2004. It provides that any person has the right to request and obtain the removal of links (with certain limitations) to freely accessible web pages resulting from a search on their name. The French Court asked the CJEU whether Google should apply a privacy ruling across all of its search requests globally (i.e., whether this removal of links in a search engine should be extended to all version of the search engine, even beyond the territory of the EU), or only to search engines localized to an EU Member State. An alternative approach would require that a search engine remove links during a search request based on the location of where the request to remove the link has been made in the first place (i.e., use geo-blocking filters to remove links in question). The CJEU’s ruling is not expected before 2019. See the Conseil d’État’s decision here.
Communication and Media Policies
On 11 July, the European Parliament’s Committees on Industry, Research and Energy (“ITRE”) and Culture and Education (“CULT”) voted on their opinions on the Copyright proposal. The ITRE opinion can be found here. The final CULT opinion will be available in September. The principal thrust of the ITRE and CULT opinions is to reinforce the concept of fair remuneration for authors.
On July 18, European telecommunications ministers released a joint declaration that underscored their ambitions to be leaders in the rollout of 5G connectivity. The declaration followed an informal ministerial meeting in Tallinn, Estonia, where they discussed telecoms reforms and data flows. The Ministers declared that they intend “to position Europe as the global lead market for 5G and to establish the necessary policy and regulatory framework conditions at regional, national, and European level.” To this end, they agreed to:
make more spectrum available in a timely and predictable manner;
encourage front-runners and supporting peer learning and increased transparency;
strengthen basic principles of sound spectrum management;
boost coverage and connectivity;
preserve 5G global interoperability;
facilitate the deployment of optical fiber;
support small cell implementation; and
set up a “strategic dialogue” on these topics.
Energy and Environment Policies
On July 20, the European Commission’s Standing Committee on Plants, Animals, Food and Feed started discussions on a Commission proposal to renew the approval of glyphosate as an active substance in pesticides in accordance with Regulation (EC) 1107/2009. The Committee’s decision and the Commission’s follow-up will illustrate the EU’s inability to live up to the consequences of its precautionary principle and the political tensions that this creates within the EU’s institutional “comitology” process.
The approval of glyphosate, which is widely used in herbicides around the word, should have been renewed by June 30, 2016, but the Commission rejected its own proposal when Member States failed to reach a sufficient majority to adopt a decision – despite the European Food Safety Authority’s conclusion that “glyphosate is unlikely to pose a carcinogenic hazard to humans.”
As a result of this political impasse, the Commission only adopted a temporary market extension for the substance until December 2017, and asked the European Chemicals Agency’s Risk Assessment Committee (“RAC”) to conduct a new review of the substance. On March 15, 2017, the RAC concluded (again) that, on the basis of the information available, there is no evidence to link glyphosate to cancer in humans.
The Commission now proposes to renew the market approval of glyphosate for ten years. However, despite the repeated opinions of EU scientific committees, the Commission has warned that it will not reapprove glyphosate without the support of a qualified majority of Member States, even if it may be legally bound to do so.
On July 31, the European Commission adopted an Implementing Decision requiring that Member States review existing permits for large combustion plants, i.e., combustion plants with a total thermal input of at least 50 MW, in order to take into account the new “Best Available Techniques” (“BAT”) conclusions adopted under Directive 2010/75/EU on Industrial Emissions. The review of permits must take place within the next four years, and is expected to affect around 3,500 installations in the EU. The Decision implementing the BAT conclusions for large combustion plants will be published in the Official Journal during the month August.
Internal Market and Financial Services Policies
The EU institutions are increasingly focusing on the legal challenges posed by robotics and artificial intelligence. On May 16, 2017, the European Commission published a paper announcing a series of regulatory and policy initiatives in response to the European Parliament’s resolution on European civil law rules on robotics of February 2017. Over the medium term, these initiatives may shape the development of the sector in Europe as the Commission may seek to amend the EU’s rules on product liability and product safety, develop certification and insurance schemes for autonomous cars, and provide significant funding for research innovation. For a fuller overview of EU regulatory developments related to robotics – see here.
On July 24, the European Commission launched a public consultation on transparency and fees in cross-border transactions in the EU, part of its Consumer Financial Services Action Plan. Currently, under Regulation 924/2009, euro transactions across borders must not cost more than corresponding euro transactions within an EU Member State. With the public consultation, the Commission is inquiring whether it would be opportune to reduce charges for cross-border transactions in all Member States – i.e., extending this rule to Member States that do not use the euro. Interested parties can submit their contributions here until October 30, 2017.
In the two years since the European Commission launched the European Fund for Strategic Investments (“EFSI”), this priority project of the Juncker Commission has triggered more than € 225 billion in investments, over 276 different projects in the EU. The success of EFSI is an important political accomplishment for Commission President Jean-Claude Juncker, as he proposed such a scheme as part of his platform for the position of President of the European Commission. EFSI is expected to generate a total of at least € 315 billion in new investments across the EU by 2018. More information on EFSI and the projects it supports can be found on the webpage of the European Investment Bank – see here.
Life Sciences and Healthcare Policies
In the course of July, the European institutions opened three public consultations relating to healthcare in the Digital Single Market. Each is outlined below. For our full analysis, see a Covington Digital Health blog post by Joshua Gray, here.
On July 20, the Commission launched a consultation on the “Transformation of Health and Care in the Digital Single Market”. This Consultation covers three broad areas – namely, (i) cross-border access to and management of personal health data; (ii) joint European use of resources (including digital infrastructure) to advance health research, disease prevention, treatment and personalized medicine; and (iii) promoting the uptake of digital innovation, to support citizen feedback and interaction between patients and healthcare providers. Submissions to the consultation close onOctober 12, 2017. Comments can be submitted here.
On July 19, the Commission published a roadmap (see here) outlining the European Commission’s intentions for its Communication on the “Digital transformation of health and care in the context of the DSM”. Similarly to the July 20 consultation (see above), the Roadmap aims to: (i) enable citizens to access to electronic health records and e-prescriptions securely, and to share them across borders when traveling, working or living in another Member State; (ii) advance research, disease prevention and personalized health and care in key areas by enabling access to data sets and medical expertise across borders; and (iii) promote widespread uptake of digital tools to facilitate patient feedback and better interaction and cooperation between citizens and healthcare providers, leading to better healthcare services and more empowered citizens. The Commission is accepting feedback on the roadmap until August 16, 2017. Feedback on the Roadmap can be submitted here.
Finally, the Estonian Presidency of the Council of the European Union has also launched a brief Digital Health Society consultation. This consultation includes questions relating to whether citizens are sufficiently informed of the benefits of the sharing of data for healthcare services or research; ensuring there are adequate precautions in place to guarantee the privacy, confidentiality, and security of data; and interoperability challenges. This consultation is open until August 30, 2017. Comments can be submitted here.
On July 19, the Innovative Medicines Initiative (“IMI”) launched two new calls for proposals. The first call for proposals, the “IMI2 Call 11”, seeks to help IMI implement the results of the projects it funds. The second call for proposals (“IMI2 Call 12”) encompasses, inter alia, Alzheimer’s disease; discovery and characterization of blood-brain barrier targets and transport mechanisms for brain delivery therapeutics to treat neurodegenerative and metabolic diseases; analyzing the infectious disease burden and the use of vaccines to enhance healthy years in aging population; and health data, including European Health Data Network. The submission deadlines for both IMI2 Call 11 and the first stage of IMI2 Call 12 end on October 24, 2017, at 5:00 pm CET. More information on IMI2 Call 11 can be found here, and on IMI2 Call 12 here.
On July 24, the European Commission announced that its advisory group, the “Expert Panel on effective ways of investing in health” is currently preparing opinions on three priority topics for the EU health strategy. The three topics are the following. First, payment models for high-cost drugs. The expert group’s focus will include the role of national pricing and reimbursement authorities with the aim of improving access to drugs, and will try to come up with answers on how health outcomes could be reflected in prices. This report is expected by November 2017. Second, access to healthcare. This report will propose benchmarks and targets (based on unmet needs for medical examination indicator or based on policy levers which could be activated to help improve access to healthcare) allowing EU Member States to enhance access to healthcare, and discuss possible use of EU funds or other mechanisms to enhance access based on the benchmarks proposed. The report is likely to be finalized in September 2017. Third, performance of primary care. This report will provide tools and indicators, to analyze the performance of primary care. It is likely to also be finalized in September 2017. See further information here.
Trade Policy and Sanctions
As we reported last month (see here) the European Council in June had a difficult discussion on the proposal made by France and Germany to screen foreign investment in strategic sectors. The conclusions said only that the heads of government “welcome an initiative by the Commission to analyze investments from third countries in strategic sectors”, leaving out any reference to the screening of acquisitions from abroad. But the pressure continued after the Council meeting. In mid-July, Germany amended its regulation on foreign investment in order to allow it to examine “whether foreign investments are made as a part of a country’s industrial strategy that wants to snaffle up Europe’s best technologies”, a clear reference to the Chinese “Made in China 2025’” strategy. This echoes the position taken by UK Prime Minister Theresa May in the Conservative Party manifesto for year’s snap general election: she had also promised not to let foreign governments and companies that own “important infrastructure” undermine British security, and work has started on national legislation to implement this pledge. At the EU level, the president of the Commission, Jean-Claude Juncker, has asked a small group to prepare a proposal on this issue, which he will include in his “State of the Union” address in September.