- 6 weeks ago
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00:00What is it that you hope to achieve in your visit to what we, you know, we regard as the
00:04home of the technology industry here in Silicon Valley in San Francisco?
00:08Thank you, Ed, and thank you for having me on. This visit is a great opportunity to connect with important
00:14stakeholders on behalf of the European Union.
00:16So meeting with public authorities such as the California Privacy Protection Agency, the Department of Consumer Affairs, meeting with a
00:25range of companies in the private sector, a lot of big tech companies in Silicon Valley, AI companies.
00:33So the focus is on consumer protection, data protection, the protection of children online, which is a hot topic here
00:41as well, and also highlighting the work that we are doing within the European Union to make the EU economy
00:47attractive for investment, showing the efforts we are making to be more supportive of innovation.
00:53I recently brought forward to the European Commission a proposal for a fundamental overhaul of EU company law.
01:00So we'll be setting up a new EU Inc. form of company, in effect, a harmonized set of corporate law
01:07rules across the European Union for a single entity.
01:10So these are all efforts to improve the overall competitiveness of the European economy.
01:15So I'm also bringing that message. And yes, explaining our approach to regulation, which is a balanced approach to appropriate
01:23regulation on the one hand, but that must be balanced with support for innovation in the tech sector.
01:30That's probably the biggest consideration for the companies themselves or point of contention, right?
01:33I believe you met with OpenAI's CEO Sam Altman.
01:36Yeah, I did.
01:36And to an extent, you know, those meetings are behind closed doors. But what is it that Mr. Altman asked
01:42of you?
01:43The way that we always think about the European Union is it's more than 450 million people, many of which
01:49may or may not access that technology or OpenAI's products.
01:53Yeah, and the European single market is a fantastic market for U.S. companies in the same way it is
01:59for European companies and other non-EU and non-American companies.
02:04450 million people, 27 different countries. And what we hear back from big tech and from AI companies is that
02:13they want certainty.
02:14They want stability around policy and regulation.
02:17Certainty meaning codified rules, you know.
02:20They want to know what the rule book is.
02:22Yes.
02:22And they want it applied consistently across the European Union.
02:25And that is something we agree with, because while we are a union of 27 member states, when the EU
02:33introduces new EU law, then that must be applied in a coherent and cohesive way across the European Union.
02:41So that's what I hear back from big tech. But we had a good discussion with OpenAI about the economic
02:47impact of AI, also the issue of the impact on democracy, how we address issues like deep fakes, how we
02:55address the huge challenge of non-consensual sexual content that is generated and disseminated, how we better protect children in
03:05the online environment and the role that AI can play.
03:08So we recognize in the European Union that AI has enormous transformative potential, which is already delivering and being played
03:15out.
03:16But equally, there are risks. And that's why we do have to balance the technological innovation of AI with an
03:23appropriate set of guardrails that protect the fundamental rights of citizens and support innovation.
03:29I do want to specifically talk about child safety. But before we get to that as a topic, generally, do
03:37you see US technology leaders as engaging seriously with European regulation or basically managing their obligations to it?
03:46You know, that is I think what industry is trying to work out is whether these are sets of rules
03:54that they they do take seriously and abide by or they just get frustrated by, given the volume or the
04:02body of regulation from from the union.
04:05Yeah, I have to say we do have really good engagement with the US big tech companies.
04:11Yes, they take issue with certain aspects of regulation and they share their perspective on that.
04:16But they want to be compliant and they want to stay within the rules.
04:19And from our point of view, we want the rules to be very clear and transparent to support innovation and
04:27investment within the European Union and help us to improve the overall productivity of the European economy.
04:34And so in the same way that a European company has to comply with US regulation when it's doing business
04:42here, of course, we expect that US companies are doing business in Europe in the same way that European companies
04:47operating in Europe must comply with the rule book.
04:49But the rule book has to be fair. It has to be proportionate. It has to be consistently applied.
04:54And that's why we have been examining it in the round and we have been bringing forward certain reforms and
05:01amendments that do take account of some of the criticisms and some of them perhaps have been fair and have
05:07had some basis to them.
05:08So that makes the Digital Fairness Act, Commissioner, an interesting case study because the European Union would argue or the
05:14Commission would argue that it could cut red tape.
05:17It would allow you to get things done.
05:19Business leaders might say, well, it's another piece of regulation on top of DSA and DMA that if you're a
05:26technology company, you have to take into account who's right.
05:31Yeah, we hear that criticism, but we can address that, I think, in a very open and direct manner because
05:36the Digital Fairness Act is not designed to be an extra layer of regulation.
05:41It doesn't reopen or revisit existing rules.
05:45What it seeks to do is address any remaining gaps in the area of consumer protection in the online environment.
05:52So, yes, it will deal with issues like dark patterns and addictive design features, difficulties consumers have in cancelling subscriptions
06:01at times, the role of social media influencers, for example.
06:05And we have collated all of the evidence, we have engaged in intensive negotiations and discussions with all of our
06:13key partners, and we will later on this year finalise the Digital Fairness Act proposal.
06:19But it will be balanced and it will address remaining gaps rather than representing an additional layer.
06:24But what it will also do is address fragmentation because, again, what we hear from the business community is they
06:30want one rule book that applies across the European Union, and we have the potential to deliver that on these
06:36issues through the Digital Fairness Act.
06:38Otherwise, you get lots of different national initiatives, which can result in a patchwork quilt of regulation that U.S.
06:46companies and other companies trading within the European Union have to deal with.
06:50So I think it can be pro-business as well as being pro-consumer.
06:54The consumer protection story in this country is about social media and addiction presently.
07:00That kind of plays out through the courts, really, in the United States, consumer protection is a big part of
07:06your portfolio.
07:08How are you defining what is or is not a product, a social media platform or a set of tools
07:17within it, as being deliberately or willfully designed to be addictive?
07:23That's incredibly hard to define.
07:24Yeah, but that's why we have our Digital Services Act, and we have complemented that with a set of other
07:31legislative interventions such as the AI Act, we have the Political Advertising Regulation, we have the Digital Markets Act, and
07:40we have within the European Union a well-established rule book now, which is clear and transparent, and which sets
07:47the guardrails within which companies then can freely operate.
07:50How does it go as far as making a product which is designed to play on a user's behaviour as
07:57illegal?
07:58Does it take that step?
08:00So what the DSA, the Digital Services Act does is it imposes obligations on the platforms that are within its
08:07scope to mitigate the systemic risk caused by the content and the dissemination of the content on their platform relating
08:17to issues like democracy and the protection of children online, for example, issues around product safety.
08:24So it does address addictive design, but only in so far as the platforms that are within its scope, and
08:31that's one of the issues that the Digital Fairness Act will seek to address is to close the gap.
08:36Because, for example, the Digital Services Act imposes a prohibition on the targeted advertising directed at children based on their
08:45profiling, but that only applies to the platforms that are within its scope.
08:50But we think that really should apply across the board to the online providers, and so that's an issue we're
08:56examining within the Digital Fairness Act.
08:58So it's an example of how we are focusing on any remaining gaps in child protection and consumer protection in
09:05the online environment through the vehicle of the Digital Fairness Act.
09:09Commissioner Gras, you know, in the context of child safety, I'm trying to understand the direction of travel that Europe
09:15as a whole is taking.
09:18President Macron, for example, is an advocate for limits on minors' usage of various platforms, technologies.
09:30Is that where Europe's heading?
09:33And, you know, within the existing legislation, the existing rulebook, you know, to what extent are you prepared to sort
09:43of force changes to a platform's underlying technology, to its algorithm, to recommendations, if you believe that the net result
09:53is improve child safety?
09:55Yeah, so we've done a lot already, is the first point I would make, through the Digital Services Act and
10:00other interventions.
10:01And there are actions underway by the European Commission against some big tech firms in relation to their obligations to
10:09protect children online.
10:11So that is already there.
10:12But it is an open question that we are considering about whether we need to go further and do more.
10:17So the Commission President, Ursula von der Leyen, set up an expert group who will report back in the next
10:23short number of months.
10:24They are examining that very question around age limits that may be appropriate for children to be on social media.
10:31These age limits have been explored in different jurisdictions around the world.
10:34That's right.
10:34But alongside that, only yesterday we confirmed that the technical work on a new EU age verification app has been
10:41concluded.
10:43So EVP, Hennifer Kunnen, and President von der Leyen confirmed that yesterday.
10:47We also have an existing code of conduct that many big tech firms have signed up to.
10:53But we have not closed the door on doing more.
10:56And we will await the outcome of the work of the expert group.
10:59We expect to have it during the summer.
11:01And then we will decide whether to bring forward a proposal for additional EU regulation that may further address that
11:08issue of age.
11:09But I have to say there are different views within the EU as there are here in the United States.
11:14Because we do believe in investment in digital literacy.
11:19Technology is the future.
11:21We want young people to embrace it, to be part of it, to enjoy all of the benefits.
11:25But there are risks.
11:26And we do need to protect them in the online environment.
11:29And that's why we are examining the need to do more.
11:32Commissioner, to end our conversation, you've outlined a really constructive and busy schedule.
11:37We're, frankly, the most important people in industry in this part of the world, right?
11:42But from our political leaders in particular, the narrative, I suppose, painted is that the U.S. accuses Europe of
11:51putting in place rules that target its biggest tech companies.
11:55Do you feel that frustration is reflected in the meetings you're having with industry?
12:03And if it were not to be the case, what evidence would you put forward that that's not true, that
12:09it is constructive in its nature?
12:11Yeah, I mean, it's certainly not true.
12:13Because the rule book that we have applies to European companies, to Chinese companies, in the same way that it
12:19does to U.S. companies.
12:20So it is without fear or favour.
12:22And it is with a view to protecting consumers, protecting online users, and especially protecting children in the online environment.
12:31And what we hear from companies all the time is that they want clarity and certainty about the EU rule
12:37book.
12:37They want it consistently applied.
12:40They want it, of course, to be fair and proportionate.
12:42We believe we can deliver all of that, while at the same time ensuring that we have a safe environment
12:47online that protects consumer rights and that protects children in the online environment.
12:52And so we continue to engage with them in the same way we continue to engage with U.S. administration.
12:58And we are focused on implementing the commitments that we made as part of the EU-U.S. joint statement
13:06that was agreed last summer.
13:08And we act in good faith.
13:10We deliver on our commitments.
13:11And, of course, we expect our partners to do likewise.
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