Illustrations by Rob Dobi for POLITICO There may be tech trouble ahead Some of the Commission’s most controversial proposals will be unveiled.

Now for the hard part.

The European Commission is expected to unveil the most controversial parts of its digital single market strategy in the coming months, encroaching on national sovereignty and threatening business models across industries.

Lobbying on all sides is at full force as the Commission tries to update laws on copyright, telecoms, value-added taxes and data. The proposals could have sweeping consequences for consumers, including the ability to watch Britain’s Sky outside of the U.K., a faster rollout of 5G telecoms services and more banking and health apps. The final four months of the year will lay bare the entrenched corporate interests and national protectionism around tech, tax and data.

“I hope the Commission has an idea for where the compromise lies,” said Fredrik Erixon, director of the European Centre for International Political Economy, “but I have not seen one so far.”

“The vision has already been bruised and the ambitions we heard at the start of this Commission have clearly been scaled down,” he added.

The digital single market strategy was introduced in May 2015, designed to create a kind of e-Schengen in which shopping, media and entertainment and 5G telecommunications have no borders, and government administration is electronic and international.

The Commission has since made about a dozen targeted proposals, including new rules for on-demand video services and cross-border internet shopping. In an effort to get an easy win, the Commission tackled popular changes to copyright laws like allowing consumers to watch Netflix while on vacation abroad. However, the cut-throat debate over other changes to copyright law — like how films get financed and sold — is still raging.

September

Telecoms review, September 13: One of the Commission’s early clashes will be over its review of the telecoms market. The executive arm of the European Union wants to weaken national governments’ grip on spectrum — the invisible waves which enable mobile phone calls and deliver services like Snapchat. The Commission wants to stitch these wavelengths together across the bloc. By harmonizing the release of spectrum for 5G, Europe could catch up to China and the U.S. on plans for self-driving cars and live, high-definition TV for mobile devices, for example.

The Commission wants to compel communication apps to provide free access to public services.

The Commission wants to give the EU’s telecoms regulator, BEREC, greater powers to coordinate spectrum auctions worth billions of euros.

“Changes in the regulatory tasks associated with spectrum will be particularly sensitive and are likely to be resisted by member nations, who jealously defend their prerogatives in this area,” the Commission said in a seven-page internal memo obtained by POLITICO.

The review also seeks to tighten the regulatory grip on internet platforms like Skype. The Commission wants to compel communication apps to provide free access to public services, such as emergency calls, and plans to give BEREC sway over communication providers like WhatsApp to prevent them becoming too dominant.

“It’s likely to push players out of market because it would be uneconomic to operate under 28 regulatory regimes rather than one,” if platforms are required to provide emergency service access, according to James Waterworth of the Computer and Communications Industry Association.

Copyright, September 21: Another awkward piece in the digital jigsaw will be new copyright laws. The Commission’s impact assessment leaked out in late August, adding gasoline to a bonfire. A measure to modernize copyright for broadcasters and content owners resulted in panic that the industry is in peril. The proposals also sought to add clarity over how to reduce the difference in royalties and fees that musicians and performers receive from subscription services and ad-supported platforms. Instead, a suggested compromise was drowned in criticism.

Subscription music streaming services, like Spotify, had global revenues of around €1.8 billion from 68 million users last year, while ad-supported services such as YouTube had €571 million in sales and 900 million users, according to recording industry lobby group IFPI. The disparity between the two is known as the “value gap” and the Commission is exploring ways to shrink it.

Vice President Andrus Ansip and Günther Oettinger, the digital economy commissioner, have been split over the issue. Ansip favored a “technological solution,” such as strengthening identification requirements for people to reduce piracy, while Oettinger wanted to change legislation to give artists more negotiating power when it comes to licensing deals, according to multiple people familiar with their positions.

The pair have moved toward a single solution, according to a source within the Commission. A leaked copy of the executive’s impact assessment suggests a solution might be increasing artists’ access to commercially sensitive contracts to boost transparency and allow them to renegotiate their contracts. The Commission also wants a dispute resolution system.

One tech giant, Google, is resisting change. Its system, called Content ID, automates more than 99.5 percent of music claims made on YouTube from copyrighted content illegally uploaded by users, according to spokeswoman Meghan Casserly. That contributes to around half of the music industry’s sales, she added.

IFPI disagrees.

“Record companies and publishers estimate that Content ID fails to identify 20-40 percent of their recordings on YouTube,” spokesman John Phelan said.

The Commission also wants to give consumers greater access to premium content, such as English Premier League soccer, regardless of where they live in the bloc. However, the executive acknowledged broadcasters’ fears that country-by-country licensing could be eroded and replaced with mandatory pan-European licenses, according to the leaked proposals. If that happens, some broadcasters fear premium content would lose its value as consumers shopped around for cheaper ways to access it.

To prevent that, copyright holders could stop smaller nations acquiring the broadcast rights.

Another shocker in the impact assessment was a clear push for EU-wide ancillary copyright for news publishers. This would hit news aggregators like Google that use snippets of articles with links to the full stories.

Publishers argue they should be compensated for any use of their material. Axel Springer, one of Europe’s largest publishers and a co-owner of POLITICO Europe, has been one of the most vocal.

Scale-up manifesto: Oettinger is championing a “scale-up manifesto,” which will be presented at the Digital Assembly, a gathering of national leaders, industry, NGOs and Commission officials, in Bratislava on September 28 and 29. Paul Hofheinz of think tank the Lisbon Council is lead draftsman of the document, which will focus on how the Commission can help growing startups in the realm of data, privacy and copyright, among other things, according to one person with first-hand knowledge of the negotiations.

Sharing economy: In late September, Violeta Bulc, the transport commissioner, is expected to publish an authoritative analysis on the overlap between the transportation sector and the sharing economy: this will affect Uber, BlaBlaCar and other companies that are shattering business models and work rules. However, Bulc, a former entrepreneur, has already hinted the Commission won’t prohibit ride sharing. The report is not expected to push for any specific policy.

The report zeros in on an important issue raised by Elżbieta Bieńkowska, the internal market commissioner, in her June “guidelines” on the sharing economy. The thrust: Don’t regulate the growth out of the sharing economy, especially for smaller European players. The focus in Europe should be on providing legal clarity, not regulatory burden.

However, Parliament is drafting its “own initiative” report in response. Italian Socialists & Democrats MEP Nicola Danti will spearhead this and has hinted at more regulation.

Either way, brace for resistance — potentially brutal — from traditional taxi drivers, as well as the governments of Finland, Hungary, France and Germany, which have already started regulating companies like Uber and Airbnb.

October

Cloud computing: Data storage companies are expected to announce in October they’re signing up to a voluntary code of conduct on data protection that they hope to wrap up in September. The new code, which has been in the works since last November, will help prepare the companies for new EU data privacy and protection rules that take effect in 2018.

The code of conduct aims to overcome trust issues cloud providers face. It is hoped the set of stricter rules — though not legally binding — will create a “Europe trustmark,” said Jonathan Sage, lead at IBM on cloud computing policy. “It has value — and, yes, commercial value as well,” he said, adding that user trust at present remains “patchy.”

November

Startup initiative: The Commission will try once again to make life easier for startups. Already a half-dozen directorate-generals are involved. With so many voices, expect a sweeping but toothless initiative.

Bieńkowska and DG GROW are supposed to lead the charge. However, there’s a debate about whether and how to legally define a startup. And of course money is an issue: Who gets how much?

One idea on the table is a “startup single market,” with separate, softer rules for smaller companies. There is also talk of a special visa to allow non-EU immigrants to work for startups. Expect a lot of crossed arms in Parliament and Council.

Free flow of data, November 30: Europe’s next fight over data will be over the Commission’s “free flow of data" initiative.

The Commission will first take aim at national restrictions on health, tax and banking data moving across Europe. Restrictions on moving health data or tax data outside of a country are common. Some cite legal reasons, pointing to pre-internet laws that require companies to have their data handy at all times.

The Commission is ready to name-and-shame countries that restrict data flows, asking them to justify or jettison. The free flow of data initiative will be a warning to countries like France and Germany, who favor data localization. It follows laws along that line adopted by Russia, Turkey and others.

In their aim to crack down on such national tendencies, the Commission stopped short of setting strong rules for companies.

The EU’s General Data Protection Regulation was signed into law in the spring, introducing tougher European standards to protect personal data, but many problems on the horizon concerning data are still unanswered. The Commission’s earlier moves to solve issues in the cloud or digital industry didn’t go into the newest regulatory hurdles.

Companies pushing to have a smooth flow of data include Google, Amazon and Microsoft. At the same time, some telecoms are reluctant to share. Deutsche Telekom, for example, has taken increasing efforts to offer local data storage in response to public concerns over data security and privacy.

December

VAT for e-commerce: The Commission’s reforms to value-added tax for e-commerce could be one of the more tangible legislative proposals to help startups. The new rules, expected sometime this month, may clarify how e-commerce companies pay tax if they sell in different European countries.

As it stands, every country sets its own sales threshold for companies to register for a VAT number. Malta has set €35,000 in annual revenue for example, while in Luxembourg it’s €100,000. Different countries also charge different tax rates, which can add paperwork and discourage small businesses.

The new proposal might simplify this. The Commission could establish an EU-wide threshold of sales for VAT. It could also establish something called a “one-stop shop,” where small businesses would only have to deal with their own tax authority, even if they sell abroad. The shop would handle the tax dealings with other countries.

But VAT is tricky. The Council needs total consensus to pass any VAT rules, and there are plenty of reluctant countries — especially poorer Eastern and Southern European ones who don’t want to pay to set up the new infrastructure — that could derail the project.

Geo-blocking in Council: The Slovak presidency of the Council has an ambitious goal of negotiating a deal on geo-blocking by the end of December. The Commission’s legislative proposal targeted online sellers who discriminate against customers based on where they live in the EU. It was designed as one of the first steps in easing cross-border selling across the Continent’s fragmented consumer system.

The proposal will likely be more controversial than the Slovaks anticipated and the deadline is tight. Contract law and the distraction of Brexit and the U.K.’s loss of influence could drag the process out.

Supply of digital content report vote, December 12: The Parliament’s Internal Market and Consumer Protection Committee is expected to vote on the final report on the Supply of Digital Content Directive, which offers up new rules for consumers using mobile apps. The date is an ambitious one — the two German rapporteurs, Axel Voss of the European People’s Party and Evelyne Gebhardt of the Socialists & Democrats, haven’t always agreed. And they could hold out for the Online and Distance Sale of Goods Directive to be wrapped up first to make sure the laws dovetail smoothly.

ECJ Uber case: Is Uber a transportation or tech company? The European Court of Justice is expected to answer in late December and the case could have wide repercussions.

If Uber is a transport service, it would be regulated like a taxi company. If it is an internet service provider, it could take advantage of a tech loophole that could let it dodge many EU rules. The case could shape how Europe approaches ride-sharing apps.

e-Privacy Directive: Europe’s tech scene is eagerly awaiting the Commission’s evaluation of the 14-year-old e-Privacy Directive, better known as the “cookie law.” The review, ambitiously expected sometime in December, governs how communications services like telecoms and online services like Skype protect people’s information.

The Commission is reviewing harsh feedback from tech companies, NGOs and others in a public consultation that closed in July. The European data protection commissioner has pushed to update the law and expand it to cover internet services including chat apps like WhatsApp that are challenging traditional telecoms. Privacy activists hope for strong protections too.