The news of the new EU industrial strategy came just a couple of days after the Geneva-headquartered, French-Italian manufacturer STMicroelectronics launched its own three-year project, worth €360 million ($463 million), aimed at creating a European microelectronics design ecosystem based around its fully-depleted silicon-on-insulator (FD-SOI) manufacturing process.

Some in the industry, such as chipmaker GlobalFoundries, have previously urged European authorities to back electronics manufacturing on the continent in order to counteract the vast influence of Asia and (to a lesser extent) the U.S. in this field.

Cheaper, faster, smarter

The European Commission’s strategy, announced on Thursday, is intended to make chips cheaper, faster and smarter. It will concentrate on shoring up three existing electronics clusters, namely those in Dresden (Germany), Eindhoven (Netherlands) and Leuven (Belgium), and Grenoble (France). Connections will also be made with other clusters such as that in Cambridge (UK), which is big in the wireless sector.

“I want to double our chip production to around 20 percent of global production,” Digital Agenda Commissioner Neelie Kroes said in a statement. “I want Europe to produce more chips in Europe than the United States produces domestically. It’s a realistic goal if we channel our investments properly.”

As per usual, this isn’t a simple public cash splurge. €5 billion in public funds – 30 percent from the EU with the rest coming from national and regional funds – will go to R&D, in order to help stimulate the sector. Overall, the Commission says, industry has indicated it will stump up €100 billion over the seven years: €15 billion in capital expenditure and €85 billion in operational costs.

The kind of electronics we’re talking about could be used in desktop and handheld computers, but the main thrust is for embedded systems and “internet of things” devices, from sensors and smart grids to new healthcare technologies. As Kroes said in a speech, “this isn’t about computers.”

Targeting these areas plays to Europe’s strengths. According to the Commission, Europe already pumps out half of global automotive electronics, 40 percent of electronics used in energy applications, and 35 percent of those used for industrial automation – this will be a reference to the output of companies such as Bosch, which are hugely active despite often being somewhat under-the-radar. Then we also have smaller manufacturers working in high-growth niches, such as health implants and sensors.

And jobs?

The purpose of all this is to make Europe less reliant on manufacturers outside the continent, but job creation is also a major factor. The Commission reckons the European electronics industry already employs 200,000 people directly and supports a further million jobs indirectly.

That said, the Commission also pointed out in its statement that demand for skilled workers in these fields is higher than supply – if this whole strategy is to work, the implication runs, Europe will need to attract more skilled workers. The statement talks of coordinating public efforts across Europe. Perhaps that will mean tweaking immigration rules: something the U.S. tech sector is also heavily vocal about these days.

Meanwhile, STMicro’s push – called, incredibly, “Pilot Lines for Advanced CMOS Enhanced by SOI in 2x nodes, Built in Europe” (Places2Be) – also takes place in the context of a wider European project, the nanoelectronics-focused ENIAC. In a briefing note accompanying Thursday’s announcement, the Commission insisted that ENIAC and ARTEMIS (another project focusing on embedded computing) had been a success, and that the new drive did not denote failure of those two schemes.

The Commission said the new joint undertaking would build on “lessons learnt” from ENIAC and ARTEMIS while providing a “simplified funding structure”.

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CoolEmAll hopes to come up with a simulation, visualization and decision support (SVD) toolkit, which could be used to simulate data centers while taking various factors into account. These include the types of applications that are being run, different hardware configurations, the intensity of workloads and specific management policies, as well as airflow. This would be represented through dashboards and 3D visualizations.

The project, which got funding as part of the Commission’s high-performance computing (HPC) drive, also aims to create a set of hardware and thermodynamic models that can be plugged into these simulations. These so-called Data Center Efficiency Building Blocks (DEBBs) will be made available in an open repository.

The analyst house 451 Research is taking part in the project. According to 451 analyst Andrew Donoghue:

“Factors such as rising fuel prices, stricter environmental legislation and constrained credit amid the financial crisis are contributing to higher capital and operational costs for data centre owners and operators. The tools and research that will result from the CoolEmAll project will help the data centre industry to meet some of these challenges, and develop more efficient and sustainable facilities.”

The prototype tools can be downloaded now. CoolEmAll is looking for people to test them, and also to potentially work with the consortium if they have something to offer.

In the meantime, here’s a video demonstrating the user interface for CoolEmAll’s under-construction Module Operation Platform:

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The Microsoft-led group, called FairSearch, was already behind a previous (and as yet unresolved) complaint to the Commission over Google’s search practices, in particular its alleged tendency to rank Google services higher than those of rivals. However, Nokia (the handset maker) and Oracle (the anti-Android litigator) joined FairSearch last September, indicating that the fight would be further extended to the mobile sphere.

That has now happened. According to a FairSearch statement on Tuesday, “Google uses deceptive conduct to lock out competition in mobile”. The main issue at play here is the way in which Google bundles its suite of services with Android: if a phone manufacturer wants to build an Android phone that includes consumer favorites such as Maps or YouTube, the manufacturer is then also obliged to “pre-load an entire suite of Google mobile services and to give them prominent default placement on the phone”, the complaint states.

The other issue is that of Google’s distribution method. FairSearch characterizes the giving-away of Android as “predatory” and “below-cost”, arguing that it “makes it difficult for other providers of operating systems to recoup investments in competing with Google’s dominant mobile platform”.

According to FairSearch counsel Thomas Vinje:

“Google is using its Android mobile operating system as a ‘Trojan Horse’ to deceive partners, monopolize the mobile marketplace, and control consumer data. We are asking the Commission to move quickly and decisively to protect competition and innovation in this critical market. Failure to act will only embolden Google to repeat its desktop abuses of dominance as consumers increasingly turn to a mobile platform dominated by Google’s Android operating system.”

So far, Google’s only response has been to say: “We continue to work cooperatively with the European Commission.” Meanwhile, a New York Times interview with EU Competition Commissioner Joaquín Almunia suggests that European antitrust officials had already been looking into Android separately from their long-running Google desktop search investigation.

Is there a case here?

The fundamental concept in antitrust regulation is that of market dominance – if the target of the regulation doesn’t dominate the market in a way that potentially lets them stunt competition, regulators can’t hold them back, as that would mean distorting the market unnecessarily. That’s why I don’t believe anything will come of complaints made over Apple’s carrier contract terms, for example – iOS devices don’t actually dominate their market.

The case for Android dominating the smartphone market, though, is much stronger. We’re not talking about the levels of dominance Google enjoys in desktop search – there, it owns just under 90 percent of the market – but, as FairSearch has noted, around 70 percent of smartphones shipped worldwide at the end of 2012 carried Android. That is a lot, but does it amount to market dominance?

There are three main problems with this theory. The first is that iOS, while not dominant, is very strong; much stronger than OS X was as a rival to Windows when Microsoft (oh, the irony) got hit with a $794 million EU antitrust fine for bundling Windows Media Player with its OS. Indeed, in the EU, iOS has a market share of around 25 percent, and Android has a market share of just over 60 percent (the 70 percent figure quoted by FairSearch is weighted somewhat by the high numbers of Android phones being shipped to developing countries).

Secondly, it is viable to fork Android and forego the standard Google suite. Amazon has done just that with its Kindle Fire range of tablets, which is doing just fine. In China, Baidu has done the same, replacing the Google suite with its own services. In Russia, Yandex is also developing its own set of rivals to Google’s services, although its strategy is more a case of piggybacking on standard Android than of rip-out-and-replace – in itself, this demonstrates that rival services can get a chance on Android, particularly if the operator rolling out the phone is keen.

Finally, this is a market in constant flux. Android’s rise has certainly been meteoric, but there is a chance that some alternative, whether it be Firefox OS or a Kindle phone or a de-Googlified Samsung OS, will stop it in its tracks. Microsoft and Nokia would certainly have something to gain from straitjacketing Google in the near future, as they want Windows Phone to succeed, but the regulators may be queasy at the thought of interfering in an already tumultuous scene.

In short, this one is complicated. Whatever happens, though, it’s a formal complaint, so the EU will be forced to acknowledge it and decide whether or not to launch a formal investigation.

Anything else?

Glad you asked! Almunia also dropped a few interesting tidbits in that NYT interview about the Google search case. He insisted that the Commission wouldn’t require Google to change its ranking algorithms, but he did say Google would need to start more clearly identifying results that link to its own services.

“Maybe we will ask Google to signal what are the relevant options, alternative options, in the way they present the results,” he suggested.

According to Almunia, Google will submit proposals this week about settling the investigation. In the U.S., the Federal Trade Commission (FTC) has already concluded a similar investigation without any major crackdown on Google, but that will not necessarily influence the Commission’s thinking, particularly as Google has a greater share of the European search market than it does in the U.S.

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The EU said the merger doesn’t threaten competition. In a press release, the European Commission said of its investigation:

“The Commission assessed the impact of the transaction on the upstream markets for the acquisition of authors’ rights for English language books in the European Economic Area (EEA) and worldwide, and on the downstream markets for the sale of English language books to dealers in the EEA, in particular in the UK and Ireland. The Commission found that on both types of markets the new entity Penguin Random House will continue to face competition from several large and numerous small and medium sized publishers. As regards the sale of English language books, the merged entity will furthermore face a concentrated retail base, such as supermarkets for print books and large online retailers for ebooks, like Amazon. In addition, the Commission’s investigation revealed no evidence that the transaction would lead to risks of coordination among publishers in relation to the acquisition of authors’ rights and the sale of English language books to dealers.”

As I reported last month, Random House and Penguin announced their merger last October and the U.S. Department of Justice approved it in February, followed by Australia and New Zealand. Random House’s parent company Bertelsmann would own 53 percent of the combined company, and Penguin parent company Pearson would hold 47 percent. Random House Penguin’s goal is to enter emerging markets and expand its digital business.

The merger awaits approval by Canada and China.

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“I don’t want to say this, but … we are panicking a bit,” said Colette Maloney, head of European Commission’s smart cities and sustainability unit, during the Green Grid Forum in Santa Clara, Calif., on Wednesday. “We are way off target.” The commission aims to see its member countries cut their energy use by 20 percent — compared to the 2005 levels — by 2020, and the European Union has only hit a 13 percent reduction.

To meet its 2020 target, the commission is counting on the information and communication technology industry to do its part, and is focusing attention on data centers in particular, given that data centers account for about 25 to 30 percent of the energy use by the IT industry, Maloney said.

CTO, Verne Global, Tate Cantrell and Eirikur Hrafnsson, Founder GreenQloud at Structure Europe 2012

Not only that, the number of data centers will likely mushroom if the idea of “smart cities” becomes a reality. The term is really about the use of technology to help people use and manage resources – from water and power to transportation and communication systems – much more efficiently (see  this GigaOm Pro report, subscription required, called “Key technologies for the future of the smart city”). Using sensors to collect data and computers to analyze and disseminate them will be a big part of running a smart city, and that will require the construction of more data centers.

Figuring out how to measure and analyze energy savings and what data is acceptable to use for those calculations are among the big challenges for making data centers more efficient, Maloney said. And getting at least the majority of the IT industry to agree to a set of methods and data won’t be easy. The commission has been working with many companies and trade associations, but they haven’t reached a happy compromise yet. Implementing those standards once they are set will pose a new challenge, she noted.

Some of the standard-setting industry organizations are looking to adopt rules for promoting energy savings. The Green Grid, an IT industry association, came up with PUE (Power Usage Effectiveness) to gauge the energy efficiency of data centers. Companies such as Google have promoted the use of PUE, which has some notable limitations.­­ EBay has a new metric for the MPG of a data center, too.

Maloney said PUE is useful, but the commission is looking at other metrics as well, especially since it wants to promote new business opportunities while achieving its energy savings target. Some of the opportunities it hopes to promote will involve making and selling efficient equipment and related services, but what constitutes green products and services has yet to be clearly defined.

In the mean time, the commission is funding research projects, such as Fit4Green and All4Green, that will come up with new ways to run data centers more efficiently. Later this year, the commission plans to call for research proposals on building and running green data centers in smart cities, Maloney said.

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The DOJ alleges that publishers, fearing Amazon’s practice of selling ebooks at $9.99, conspired with Apple at the launch of the iPad and iBookstore to adopt agency pricing, in which the publisher sets an ebook’s price and pays the retailer a commission. Previously, publishers had used wholesale pricing for ebooks, where the publisher sets a suggested list price and the retailer buys the ebook at a discount (usually 50 percent) and can then sell it at whatever price it wants. The DOJ says that that the alleged collusion led to higher ebook prices for consumers and harmed competition in the ebook marketplace. Publishers maintain that agency pricing created a more diverse marketplace by leveling the playing field and reducing Amazon’s power. (Here’s some background on the case.)

Penguin said in a statement:

Penguin has always maintained, and continues to maintain, that it has done nothing wrong and has no case to answer. Penguin continues to believe that the agency pricing model has encouraged competition among distributors of both ebooks and ebook readers and, in the company’s view, continues to operate in the interest of consumers and authors. But it is also in everyone’s interests that the proposed Penguin Random House company should begin life with a clean sheet of paper.

The DOJ said it is “currently reviewing the proposed joint venture announced by Penguin and Random House Inc., the largest U.S. book publisher. Should the proposed joint venture proceed to consummation, the terms of Penguin’s settlement will apply to it.” Random House was not included in the DOJ’s original lawsuit, because it adopted agency pricing over a year after after the other big-six publishers did.

According to the DOJ’s competitive impact statement (PDF), Penguin has agreed to “substantially the same terms” that the three other settling publishers — HarperCollins, Simon & Schuster and Hachette — agreed to in April: The publisher will terminate its existing agreements with ebook retailers and enter into new ones that, for two years, allow retailers to freely discount its ebooks (with a few limitations). Most-favored nation clauses (which state that no other retailer can charge a lower price) are prohibited for five years. If and when the settlement is approved by Judge Denise Cote of the New York federal court, Random House will be subject to the same terms and will also have to negotiate new retailer contracts.

Like the original settlement, the DOJ’s proposed settlement with Penguin (PDF) is subject to a 60-day public comment period. The DOJ received over 800 public comments on the original settlement, the vast majority of them opposing it. Judge Cote approved it anyway.

Since the original settlement went through, HarperCollins, Simon & Schuster and Hachette have entered new ebook contracts with Amazon and other ebook retailers. They are still setting the prices for their ebooks and paying retailers a commission, but retailers can discount the books as they wish and can sell them at a loss. The DOJ claims that “[the] settlement likely will lead to lower e-book prices for many Penguin titles; prices for titles offered by HarperCollins, Hachette, and Simon & Schuster fell soon after those publishers entered into new contracts as a result of the Original Judgment.” (Many of the settling publishers’ ebooks have only dropped in price slightly.)

Penguin is discussing a similar settlement with the European Commission.

The DOJ notes that “of course, the case against the remaining Defendants” — Apple and Macmillan’s parent company Holtzbrinck — will continue.

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The £530m ($843m) rollout will cover what is known as the ‘final third’. Basically, telcos such as BT are perfectly happy to bring superfast broadband to two-thirds of the country on the basis that they’ll get a good return for it. For the remainder, they need a bit of a push, and that push is being carried out by a government department called Broadband Delivery UK (BDUK).

“BDUK… will assist local granting authorities in designing and implementing successful broadband support measures in line with EU competition rules,” competition commissioner Joaquín Almunia said in a statement. “The umbrella scheme will be a big step towards the achievement of the EU Digital Agenda targets and a strong impetus for growth in the UK.”

The biggest target this will help the UK hit is that of everyone in the EU having access to 30Mbps connectivity by 2020.

“Finally getting the green light from Brussels will mean a huge boost for the British economy,” UK culture secretary Maria Miller said in response. “Superfast broadband is essential to creating growth, jobs and prosperity and the delay has caused frustration within government. Today’s announcement means that we can crack on with delivering broadband plans, boosting growth and jobs around the country.”

Now, about that delay. As Miller points out, the European Commission took a few months longer than expected in giving its approval. The reason for this, most observers surmised, was the slight issue that almost all the government cash is likely to go to one company.

Indeed, in most of the UK, only two companies were left standing for the multitude of local tenders. BT was one and the other was Fujitsu – but Fujitsu messed up so spectacularly in previous public sector projects (particularly in the big National Health Service IT overhaul) that it’s now effectively blacklisted.

That leaves BT. It’s not as though BT will simply be sucking up money here – it is going to put its own cash into the final third deployments too – but it’s still a case of state aid benefiting one firm pretty much exclusively.

Almunia seems to think transparency and regulation will keep things on the level. The Commission statement reads:

“The UK telecommunications regulator [Ofcom] will have a crucial role in designing wholesale access prices and conditions. All information related to projects under the scheme (including mapping, public consultation, tenders, aid beneficiaries) will be published on a central website.”

For more detail, we’ll have to wait until the Commission publishes its reasoning in full. Either way, it’s full steam ahead for proper rural broadband in the UK – and, given that the first generation of copper-based broadband performed pretty awfully in those areas, the shift can’t come too soon.

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Well, add another voice to that mix. The European Network and Information Security Agency (ENISA) has published its assessment of the proposals, and the tone is sceptical to say the least. And, interestingly, one of the biggest problems ENISA has found has to do with big data.

The European Commission‘s proposals define the sort of data that has to be erased (if the data subject asks for it) in more than one way. Without wishing to get into comparison of various sections’ wording, here’s what ENISA has to say:

“[The definitions] leave to interpretation whether [personal data] includes information that can be used to identify a person with high probability but not with certainty… Neither is it clear whether it includes information that identifies a person not uniquely, but as a member of a more or less small set of individuals, such as a family.”

Here comes the kicker:

“A related question is how aggregated and derived forms of information (e.g. statistics) should be affected when some of the raw data from which statistics are derived are forgotten. Removing forgotten information from all aggregated or derived forms may present a significant technical challenge. On the other hand, not removing such information from aggregated forms is risky, because it may be possible to infer the forgotten raw information by correlating different aggregated forms.”

That’s a pretty big problem. If data gets aggregated and crunched by analytics software, you can’t say in all cases that the process can’t be reverse-engineered, particularly when you’re correlating different sets of derived data. But getting it out is, well, a challenge.

This isn’t the only problem ENISA’s identified. Here’s a tl;dr rundown of the report’s other comments and questions:

• When you have a photo on a social network that features multiple people, “who gets to decide if and when the photo should be forgotten?”
• The internet is not a closed system, and it spans multiple jurisdictions. “Enforcing the right to be forgotten is impossible in an open, global system, in general.”
• “Unauthorized copying of information by human observers is ultimately impossible to prevent by technical means.”
• You could try DRMing all data, but these things can be bypassed, and people wouldn’t like it.
• So what could work? “A possible partial solution may be a legal mandate aimed at making it difficult to find expired personal data, for instance, by requiring search engines to exclude expired personal data from their search results.”

ENISA is too politically savvy to just come out and say that the right to be forgotten is doomed, but they come pretty close.

Is it doomed? Quite possibly – which is a pity, in some ways, as it would be nice to avoid an inexorable slide into a world where people lose control over their own history.

As ENISA points out in its report, a fundamental problem with European laws such as this proposed revision to the data protection directive is that they need to be broad enough to be interpreted by member states in ways that fit with their national principles. Technical solutions don’t do ‘broad’. They need ‘specific’.

And with problems such as those highlighted by ENISA, good luck to the European Commission with nailing down those specifics in a way that pleases everyone.

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Back in April, the Commission launched a new scheme called European Citizens’ Initiatives (ECIs). The idea here is that, if a proposal for a new pan-EU law gets support from at least a million citizens spread across at least seven member states (out of a current total of 27), the Commission will have to “give serious consideration” to the proposal. If they decide not to push forward with it, they’re obliged to explain themselves.

As with the Finnish system, support can be gathered online. The Commission has come up with open-source software for this and, in July, it invited people to use its own servers.

And today a Luxembourg-based initiative called Fraternité 2020, to do with boosting exchange programs within the EU, became the first ECI to start collecting signatures on the Commission’s servers. A previous ECI called ‘Right 2 Water’ is already running on private hosting.

“This result proves that the Commission is absolutely determined to make this new instrument of participatory democracy a success,” EU vice-president Maroš Šefčovič said in a statement.

Can it work?

This scheme is obviously a very different affair from the crowdsourced politics initiatives going on in Finland and Iceland, and frankly I’m a lot more sceptical about this one.

For a start, this is the first I’ve heard of the entire ECI system – and I only learned of it today because I was in the mood to pore through obscure European Commission press releases. Many people in the EU are barely aware that the Commission exists and, given the scanty coverage that the ECI has received, I’m pretty sure that few people are clued up about the opportunity. Is that deliberate? Hard to tell, as the Commission is not great at communications at the best of times.

A related problem is the size and cohesiveness of the populace that’s being invited to participate.

Finland has just over five million citizens and Iceland has not many more than 300,000. Both are relatively tight societies. The EU as a whole has more than half a billion inhabitants, and cohesion is… an issue.

And what happens when you have a mass-participatory system like this that few people are really paying attention to? You get a golden opportunity for lobbyists to game the system.

In theory, the Commission should catch such attempts, but that’s a big ‘should’. This is the final and perhaps most deadly problem: the EU’s executive branch is, sadly, unelected. Many if not most people do not trust it, and that’s a pretty huge barrier to participatory democracy, no matter how technologically-enabled it is.

There are other problems, too. A huge part of the EU’s cohesiveness challenge is down to the spread of languages across the union and, although the Commission has to screen all the initiatives that go up, it’s refusing to handle translation.

That means the organizers need to translate their initiatives themselves – a barrier that you can see for yourself on the list of open initiatives. It’s hard to get support from people in other countries when they can’t read your proposal.

Time will tell. The first deadlines for signature collections will hit in May 2013, and we’ll see after that whether this online citizens’ initiative drive is worth the pixels it’s written on. But I suspect that the challenges presented by the extremely challenging European Union will make this a whole different ballgame from the ones being played in Northern Europe’s smaller societies.

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