DAILY NEWS
Brussels, 10 September 2024
EU boosts European AI developers with the AI Factories call for proposals
Today, the Commission has launched a call for setting up AI Factories to boost European leadership in trustworthy artificial intelligence (AI). AI Factories will be created around the EU's world-class network of European High-Performance Computing (HPC) supercomputers and will be available to a range of European users, such as startups, industry and researchers.
President of the Commission, Ursula von der Leyen said: “Europe is already leading the way with the EU AI Act, ensuring AI is safer and more trustworthy. Earlier this year, we fulfilled our promise by opening our high-performance computers to European AI start-ups. Now, Europe must also become a global leader in AI innovation. AI Factories will help secure our position at the forefront of this transformative technology.”
AI Factories will bring together the key ingredients for success in AI: computing power, data and talent. They will help AI developers train their large generative AI models by using the EuroHPC supercomputers and providing access to data, computing and storage services. The Factories will be networked across Europe, providing a unique European collaborative AI framework.
The AI Factories will be connected to Member States' AI initiatives, creating a vibrant AI ecosystem. The Factories will also profit from Europe's Testing and Experimentation Facilities and the Digital Innovation Hubs. The AI Factories will propel the development and validation of AI industrial and scientific applications in key European sectors such as healthcare, energy, automotive and transport, defence and aerospace, robotics and manufacturing, clean and agri tech.
The rolling call launched today by the EuroHPC Joint Undertaking will be continuously open until 31 December 2025, with the first deadline on 4 November 2024 and subsequent cut-off dates every three months for as long as funds are available. This call will be supported by an EU contribution of close to €1 billion from the Digital Europe Programme and Horizon Europe and an equal amount of funding coming from the Member States.
Background
AI Factories are a highlight of the Commission's AI innovation package presented in January 2024, together with:
The Commission will also set up a European AI Research Council where Europe can pool resources and explore how it can exploit the untapped potential of data to support AI and other technologies.
For More Information
EuroHPC JU's press release
Digital Europe Programme
Horizon Europe
Quote(s)
Europe is already leading the way with the EU AI Act, ensuring AI is safer and more trustworthy. Earlier this year, we fulfilled a promise from my State of the Union address by opening our high-performance computers to European AI start-ups. Now, our next goal is clear: Europe must become a global leader in AI innovation. AI Factories will help secure our position at the forefront of this transformative technology, as outlined in my political guidelines for the next Commission.
Ursula von der Leyen, President of the European Commission
AI factories will bring together all main ingredients that Europe needs to become a global AI powerhouse: very high computing power, large amounts of data, and a diversified pool of talents. By tapping into the extraordinary potential of our homegrown supercomputers, the factories will allow European SMEs, scientists and startups to develop as AI innovators, and set the pace for EU’s leadership in this domain.
Margrethe Vestager, Executive Vice-President for a Europe Fit for the Digital Age
With the launch of AI Factories, we are leveraging one of Europe’s biggest assets: our world-class supercomputers. AI Factories will serve as a one-stop shop for Europe's AI start-ups, helping them develop the most advanced AI models and industrial applications. This will make Europe the best place in the world for trustworthy AI.
Thierry Breton, Commissioner for Internal Market
Artificial Intelligence Board kicks off work on uptake of AI in the EU and implementation of the AI Act
Today, the Commission is hosting the first official meeting of the Artificial Intelligence (AI) Board, following the entry into force of the AI Act on 1 August. This inaugural session, which takes place in Brussels, marks an important step in the EU's commitment to shape a robust framework for AI governance.
The AI Board is comprised of high-level representatives from the Commission and all EU Member States, and is discussing how to enhance the development and uptake of AI in the EU and the next steps in the implementation of the AI Act. The European Data Protection Supervisor (EDPS) and EEA/EFTA representatives from Norway, Liechtenstein, and Iceland are participating as observers. The EU AI Office provides the Secretariat for the AI Board.
Today's meeting is primarily focusing on the following key areas: the establishment of the AI Board's organisation and the adoption of its rules of procedure; an update and strategic discussion on EU AI policy, including the GenAI4EU initiative and international AI activities; a progress update and discussion on the first deliverables of the Commission related to the AI Act's implementation; and an exchange of best practices for national approaches to AI governance and AI Act implementation.
The Commission and Member States aim to ensure a robust and timely setup of the AI governance framework, facilitating effective participation of Member States and implementation of the AI Act.
This meeting follows a preparatory session hosted by the Commission on 19 June, which laid the essential groundwork for the AI Act's implementation.
You will find more information on the AI Board here.
(For more information: Thomas Regnier – Tel.: +32 2 299 10 99; Roberta Verbanac – Tel.: +32 2 298 24 98)
Commission approves new geographical indication ‘Söke Pamuğu' from Türkiye
The Commission has approved the addition of the raw cotton fibre ‘Söke Pamuğu' from Türkiye to the register of Protected Geographical Indications (PGI).
‘Söke Pamuğu' is the raw cotton fibre cultivated in the Söke region. Classified as a foodstuff, it is closely associated with the soil structure of the Söke district, which influences the characteristics of the cotton plant. Well-drained, moisture-retaining and fertile soils support the root development of the cotton plant and ensure healthy growth. Seed planting for Söke Pamuğu takes place in the last week of April. The harvesting period occurs 150-155 days later, during the first week of October. This results in high-quality cotton yarn of excellent colour and quality. By carefully managing irrigation practices and considering rainfall levels, farmers can also ensure that Söke Pamuğu receives adequate moisture for its growth and development. This way, product quality does not decrease. This experience enhances cotton and consequently yarn quality. Cotton production has become a tradition in the Söke district, practised in the area since the year 1700.
This new denomination will be added to the list of 3,628 agricultural products already protected. The list of all protected geographical indications can be found in the eAmbrosia database. More information is available online at Quality Schemes and on our GIView portal.
(For more information: Olof Gill – Tel.: +32 2 296 59 66; Thérèse Lerebours – Tel.: +32 2 296 33 03)
Commission discusses Russia sanctions circumvention with industry executives
Today, Executive Vice-President Valdis Dombrovskis and Commissioner Mairead McGuinness are chairing a roundtable with senior executives from key EU companies trading in Common High Priority (CHP) items. These include companies in the semiconductors, aerospace, telecommunications and industrial automation and engineering sectors. Several banks, logistics providers and sector associations are also attending the meeting.
Participants are discussing how EU industry, in close cooperation with governments and EU institutions, can engage in a trust-based partnership to tackle the circumvention of EU sanctions on sensitive goods. They are also sharing perspectives on compliance risks, best practices against circumvention, the protection of EU know-how and intellectual property from misuse abroad, and ways to tackle smuggler networks and illicit actors.
The EU has adopted 14 packages of sanctions in response to Russia's illegal, unprovoked, and unjustified military aggression against Ukraine. One of the key objectives of these measures is to block Russia's access to the goods and technology that it needs to pursue its war and further develop its military capabilities.
The fight against the circumvention of EU sanctions is a priority. To this end, the Commission works closely with Member States and the industry, and conducts diplomatic outreach to third countries that are used as platforms for sanctions circumvention.
The CHP list, prepared by the Commission together with authorities in the US, UK and Japan, includes components repeatedly recovered from the battlefield in Ukraine as well as items critical for the development, production or use of such components. The CHP list is a central element of efforts to combat circumvention.
(For more information: Francesca Dalboni – Tel.: +32 229 88170, Olof Gill – Tel. : +32 2 296 59 66, Marta Perez-Cejuela Romero - Tel.: +32 2 296 37 70, Ana Apse-Paese – Tel. : +32 2 298 73 48)
Joint Press Statement on the occasion of the official visit of Commissioner for Home Affairs Ylva Johansson to Egypt
On 9 September 2024, Ylva Johansson, European Commissioner for Home Affairs and Badr Abdelatty, Egyptian Minister of Foreign Affairs, Emigration and Expatriates, met in Cairo and they discussed ways to further deepen the cooperation between the European Union and Egypt in the field of migration.
They highlighted the successful longstanding partnership in the field of migration which is currently being strengthened following the signature of the Joint Political Declaration on the Strategic and Comprehensive Partnership on 17 March 2024, with migration and mobility as one of its six pillars.
They stressed the importance of promoting their holistic approach in dealing with the migration phenomena in line with the Joint Declaration, including through linking migration to development, and addressing the root causes of irregular migration.
The European Commissioner for Home Affairs welcomed Egypt's successful efforts in preventing irregular migration and controlling its borders, including preventing the departure of vessels carrying irregular migrants from Egypt through the Mediterranean Sea since September 2016, and conducting search and rescue operations to save lives at sea. Commissioner Johansson also welcomed Egypt's efforts in managing migration, and combating cross-border criminal networks involved in trafficking in human beings and migrant smuggling. Both sides emphasised the importance of cooperation to enhance border management and combating criminal networks involved in trafficking in human beings and migrant smuggling, including cooperation in the framework of the Global Alliance to counter migrant smuggling launched by the EU, through ongoing practical cooperation.
The Minister of Foreign Affairs, Emigration and Egyptian Expatriates of Egypt stressed the importance of facilitating pathways for regular migration and increasing awareness of the dangers of irregular migration, as well as enhancing cooperation with a view to developing education, vocational and technical training to improve skills and employability, creating job opportunities and facilitating mobility to the EU, including in the framework of the Talent Partnership initiative.
Both sides agreed to continue supporting the priorities included in Egypt's third national strategy to combat and prevent human trafficking (2022-2026) and the national strategy to prevent illegal emigration (2016-2026) and the action plans pertaining to it.
Both sides emphasised Egypt's longstanding role in hosting large numbers of migrants, refugees, and asylum seekers, adopting an out-of-camp policy and providing basic services. The European Commissioner for Home Affairs expressed appreciation for the efforts that Egypt exerts for hosting over nine million migrants, refugees, and asylum seekers from different nationalities, and acknowledged the related burden, while stressing the continued support of the European Union to Egypt's efforts in this regard, including through supporting the Egyptian Governments' endeavors to enhance the provision of services to refugees, asylum seekers and migrants, and to strengthen the resilience of host communities, in addition to exploring resettlement opportunities as well as safe and legal pathways to the European Union for refugees hosted in Egypt, in line with the principle of burden and responsibility sharing.
Both sides reiterated their commitment to the protection of the human rights of migrants and refugees in accordance with their obligations under international law including international human rights law.
The two sides explored the prospects of enhanced cooperation between Egyptian national authorities and European Union Home Affairs agencies such as the EU Agency for Asylum (EUAA), European Border and Coast Guard Agency (Frontex), the European Union Agency for Law Enforcement Cooperation (Europol), the European Union Agency for Law Enforcement Training (CEPOL), and the EU Drugs Agency (EUDA).
The two sides also discussed issues related to facilitating the dignified and sustainable return, readmission and reintegration of Egyptian citizens irregularly staying in the EU. They also discussed how to increase support to voluntary returns of irregular migrants from Egypt to their countries of origin. They agreed on continuing coordination and exchange of best practices for the implementation of bilateral agreements concerning return, readmission and reintegration, while Egyptian embassies and consulates abroad continue to facilitate the return of Egyptian citizens irregularly staying in the EU after accurately and timely verifying their identity and issuing travel documents for them, where needed, and abiding by the relevant national procedures, along with the support of the EU to activities conducted under “The Fund for Combating Illegal Migration and the Protection of Migrants and Witnesses”, pertaining to the return and reintegration of Egyptian nationals.
Remarks by Executive Vice-President Vestager following the Court of Justice rulings on the Apple tax State aid and Google Shopping antitrust cases
"Check against delivery"
Today is a big win for European citizens and for tax justice.
The Court of Justice confirms the decision from 2016 by the European Commission: Ireland granted Apple unlawful aid which Ireland now has to recover. And this judgement is final.
The Court also confirms the Commission's decision in the Google Shopping antitrust case. And also this is a final judgment.
Let me first talk about Apple case and the judgment in itself. It is a win for the Commission. It is also a win for the level playing field in the Single Market, and for tax justice.
At the start of my first mandate as Commissioner for Competition, aggressive tax planning was already catching public attention. Multinationals were brought before parliamentary committees in the US and the UK to explain their hidden tax arrangements.
A seismic shift was occurring. Corporate tax avoidances were put in the spotlight by investigative journalists, as the consortium that brought us LuxLeaks. They revealed that some corporations paid almost no tax in Europe by abusing loopholes and asymmetries between different tax systems. And that few Member States were relying on tax rulings and aggressive tax planning arrangements to become a more attractive destination for multinational investments. This harmed other Member States and the European taxpayer.
State aid granted in the form of fiscal advantages was and is nothing new. Still, the investigations into tax rulings led the Commission into uncharted territory. We were supported in our action by the European Parliament, civil society and European citizens who were demanding a public response. But of course, this implied that there were legal risks.
The Commission investigated several of these tax rulings and aggressive tax planning measures under State aid rules in the Belgian Excess Profit, Amazon, Fiat, and Apple cases. There were more. These are just a few of them. Today, the Court of Justice confirmed our decision in the Apple case.
In its decision in 2016, the Commission concluded that two Irish tax rulings constituted illegal State aid. They had artificially lowered taxes paid by Apple in Ireland since 1991. The Commission considered this to be a misapplication of Irish tax rules and ordered Ireland to recover up to 13 billion euros from Apple.
These tax rulings attributed the bulk of taxable profits - of two Irish subsidiaries of Apple - to stateless "head offices". These head offices existed only on paper. No tables, no chairs, no activities. The profits were thus not taxed anywhere. As an example, in 2011, one of Apple's Irish subsidiaries recorded profits of approximately 16 billion euros. Of these, thanks to the tax rulings, only around 50 million euros were taxable in Ireland. So, this subsidiary paid less than 10 million euros of taxes in Ireland in 2011 - an effective tax rate of about 0.05% of these overall annual profits. 0.05%.
More concretely, today the Court of Justice confirmed the Commission's approach that the intellectual property licences held by Apple's Irish subsidiaries and related profits should have been allocated to the Irish branches. And that Apple should have paid taxes worth 13 billion euros on all related profits in Ireland.
This means that the recovered taxes, which have been in an escrow account for quite some years in Ireland during the ongoing court proceedings, now must be released to the Irish State.
From the judgments that we have had already, some we have lost, and the little time we had to study today's decision, I see two main take-aways:
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There is a bigger picture. Our investigations have decisively contributed to a mind shift, a change of attitudes among Member States. They have helped to trigger or accelerate regulatory and legislative reforms.
Take Ireland: Today, the Apple case could no longer occur. Ireland changed its corporate tax residence rules to prevent Irish incorporated companies from being stateless for tax purposes. But others also changed course.
In the wake of the Fiat investigation, Luxembourg adopted substantial changes to its legislation to ensure compliance with the arm's length principle. They also clarified the tax treatment of financing companies. Therefore, also the Fiat case could not reappear today.
In the Netherlands, tax ruling policy changed: Since 2019, the Netherlands adopted legislation to counter the use of shell companies to avoid or evade taxes. A company is now required to have a meaningful economic presence in the Netherlands to obtain a tax ruling.
In Cyprus, changes were made in 2013 and 2017 in the transfer pricing area: clearer rules as regards certain financial transactions, and the introduction of general transfer pricing principles, inspired by the OECD.
Beyond the specific legislative changes implemented by certain Member States, a set of more wide-ranging legislative initiatives have been taken in the last decade. These initiatives were pushed by the Commission and spurred by the momentum of the State aid investigations.
First, more fiscal transparency has been achieved through various amendments of the Directive on administrative cooperation in the field of taxation. Since 2017, the automatic exchange of tax rulings between Member States has decreased the use such arrangements for tax advantage purposes. Coordination of tax policies and more transparency help restore a level playing field for all companies.
Second, the OECD's anti-Base Erosion and Profit Shifting measures have been implemented by EU Member States thanks to the EU Anti-Tax Avoidance Directives. Right now, the Commission is in the process of checking the implementation of these Directives by Member States.
Third, the EU adopted the Directive on global minimum effective level of taxation (so-called “pillar 2”, if one speaks OECD). Building on the work done at the OECD, this Directive introduced a minimum effective corporate tax rate of 15%.
Finally, the Commission adopted two legislative proposals: the first one aimed at fighting the use of shell entities and other arrangements for tax purposes. And more recently, one aiming to harmonise transfer pricing rules within the EU to ensure a common approach and a level playing field. Sadly, but maybe not too surprising, the discussions in the Council on these proposals are not progressing well.
As part of the European Semester and the implementation of the Recovery and Resilience Facility, the Commission is also discussing with certain Member States legislative reforms to tackle aggressive tax planning measures and harmful tax competition. For example, we do that with Malta and Cyprus.
Despite these efforts, and as you can hear this is quite a lot, the unfortunate side is that aggressive tax planning practices are still widespread. According to the Commission's Annual Reports on taxation but also according to other studies, few Member States (Ireland, the Netherlands, Luxembourg and Belgium) seem to be central when it comes to profit shifting. In 2022, multinationals' global corporate profits amounted to about 16 trillion US dollars. 2.8 trillion dollars of these profits were made outside of their headquarters, in other tax jurisdictions. And about half of that was shifted to low-tax countries – including countries within the European Union. The cost is high for European citizens.
Today marks a step forward. And it's encouraging. It is encouraging for us to do more. The Commission will continue its work on harmful tax competition and aggressive tax planning. Both in terms of legislative proposals and enforcement. We will implement what we have decided. I also invite Member States to advance on the Commission proposals on transfer pricing and the use of shell companies. The Member States now hold the right of initiative to push this forward.
Our collective efforts in this field derive from one simple principle: fairness.
Our efforts in defending these principles need to continue at all levels – be it national, European or international.
Let me now turn to today's Google Shopping judgment – which we also won.
This judgment by the Court of Justice upholds the Commission's Google Shopping Decision. In that Decision, the Commission found that Google favoured, within its general search results, its own comparison-shopping service “Google Shopping”, over those services provided by its rivals.
The Court of Justice confirms that, in certain circumstances, the favourable treatment of its own services by a dominant company can be a breach of Article 102 TFEU.
This important judgment validates the Commission's approach to such practices. We call them “self-preferencing”.
Dominant companies, as any other companies, are of course free to innovate in all fields, but in doing so, they should compete on the merits. However, they cannot lean on the competitive advantage that they hold because of their market power. Going forward, the Commission will make sure that the principles enshrined in this judgement – which is now final – are upheld for the benefit of all European consumers.
The Google Shopping case is a landmark in the history of regulatory actions against big tech companies. It was one of the first significant antitrust cases brought by a competition agency against a major digital company. And I think this case marked a pivotal shift in how digital companies were regulated and also perceived.
Before this case, the prevailing belief was that digital companies should be left to operate freely. They were seen as innovators driving positive change and growth. However, the European Commission's decision to investigate and subsequently fine Google for abusing its market dominance in the comparison-shopping service sector challenged this notion.
This case was symbolic because it demonstrated that even the most powerful tech companies could be held accountable. No one is above the law. It inspired regulators and policymakers worldwide to scrutinize the activities of digital giants more closely. The Google Shopping case set a precedent and paved the way for further regulatory actions, including the Digital Markets Act (DMA) of the European Union.
In essence, the Google Shopping case was a catalyst for change, inspiring a more vigilant and proactive approach to regulating big tech and ensuring a fairer digital marketplace.
Thank you very much.
CALENDAR
TUESDAY 10 September
Ms Stella Kyriakides receives Professor Dame Sally Davies, Special Envoy on Antimicrobial Resistance for the United Kingdom.
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