France and Germany isolated on platform workers
But also — CS3D; Parliament vs. Commission; Plenary; DSA; Ukraine
Hello! It’s Friday 22nd March, and here is your EU news summary for the week. Feel free to share this newsletter with friends and colleagues, and follow us on Twitter and LinkedIn.
The Briefing
It took a total of 800 days of negotiations. On March 11, the labour ministers of the Member States adopted the directive on platform workers, despite opposition from France and Germany. Although the text has been made less ambitious, the directive will nonetheless still bring significant changes for companies like Uber and Deliveroo.
WHAT IS IT • This directive concerns work via digital platforms, meaning the connection, through an online platform, of a service request from a client with the provision of paid work by a person.
According to official estimates, the number of platform workers in the EU is expected to reach 43 million by 2025, an increase of over 50% since 2022, when they were already 28.3 million, equivalent to all workers in the manufacturing industry in Europe.
Beyond harmonising rules across the EU, the directive has a dual objective.
On one hand, it aims to combat "false" self-employment statuses: 90% of platform workers have a self-employment contract, and it is estimated that about 20% of these workers are incorrectly classified and should be employees.
On the other hand, the directive aims to regulate algorithmic management, i.e., the use of artificial intelligence — often in a non-transparent manner — to replace managers and allocate work and determine prices, among other things.
PRESUMPTION • On December 13, the European Parliament and the Council of the EU reached a provisional agreement on the directive within the framework of trilogues.
For context, trilogues are interinstitutional negotiations between the Parliament, the Council of the EU, and the Commission aimed at allowing the co-legislators (the Parliament and the Council) to agree on a common text based on the positions negotiated by each beforehand. The agreement must then be formally approved by both institutions.
However, a few days later, the permanent representatives of the Member States rejected the text. The main point of disagreement concerned the notion of "legal presumption of employment." The idea of this presumption is as follows: if a number of elements prove that there is a relationship of subordination between the company and the self-employed worker, the self-employed worker can be reclassified as an employee.
The provisional agreement reached on December 13 established a clear list of criteria for proving a relationship of subordination. If two of these criteria were met, the relationship between the company and the worker was presumed to be employment, and it was up to the company to prove otherwise.
France, supported by a dozen Member States, wanted a more flexible approach. So new negotiations led to a new provisional agreement between the Council and the Parliament. In this agreement, the list of criteria is removed, and it is up to the Member States to define how this legal presumption of employment works.
UNSATISFIED • For France, Germany, Greece, and Estonia, the agreement was still not satisfactory. In recent weeks, the text has been rejected twice by the Council, which voted by qualified majority: this is the most commonly used voting method in the Council. It requires that 55% of the Member States representing 65% of the EU population vote in favour of a text for it to be adopted.
A blocking minority can only intervene when at least four Member States oppose a text. In other words, even if three Member States representing 35% (100%-65%) of the EU population oppose a text, it will still be adopted.
The combined population of France and Germany represents approximately 33% of the EU population. To block a text voted on by a qualified majority, Germany and France therefore "only" need to find two other Member States to rally to their cause.
Thus, Paris, Berlin, Athens, and Tallinn were able to block the adoption of the directive several times.
But on March 11, during a last-chance meeting to allow the adoption of the directive, Estonia and Greece finally decided to support the text, leaving France and Germany out in the cold. This situation is extremely rare.
"Fascinating case for the QMV debate - as far as our data on public votes in the Council shows, this is the first time since at least the Treaty of Lisbon, that France and Germany were outvoted together. (...) That they could not find two more countries here is quite telling," writes Nicolai von Ondarza, head of the Europe division at the Stiftung Wissenschaft und Politik (SWP), on X.
REACTIONS • This agreement is a victory for the Belgian presidency of the Council of the EU, but also for the Social Democrats (S&D): the European Commissioner for Employment and Social Rights, Nicolas Schmit, belongs to S&D, as does the rapporteur of the text in Parliament, Elisabetta Gualmini.
However, ambition has been reduced on several points, notably the legal presumption of employment. The removal of the list of criteria for establishing the relationship of subordination between the employer and the worker is not to everyone's liking. One of the objectives of the directive was indeed to allow harmonisation of rules at the European level.
A representative of the Uber platform states: “EU Countries have voted to maintain the status quo today, with platform worker status continuing to be decided country-to-country and court-to-court (…) Uber now calls on EU countries to introduce national laws that give platform workers the protections they deserve while maintaining the independence they prefer.”
However, on the question of algorithmic management, the final result seems to be in favour of workers.
For example, digital platforms will not have the right to use information on the psychological or emotional state of workers in AI-based management, personal data related to private conversations, or information on sexual orientation or disabilities. Transparency requirements are also imposed on digital platforms, which must inform workers how the algorithms work.
"This is the first comprehensive set of rules governing the use of artificial intelligence in the workplace, which paves the way for international discussions in the years to come," explains Oxford researcher Jeremias Adams-Prassl on X.
WHAT NEXT? • The final text must now be formally adopted by Parliament and the Council, which should not pose a problem.
Once the directive is published in the Official Journal of the EU, Member States will have two years to incorporate the provisions of the directive into their national legislation.
In Case You Missed It
CS3D • The Corporate Sustainability Due Diligence Directive (CS3D) — a directive aimed at imposing a duty of care on companies operating in the European market — was until recently in a bad position (which we covered last week). However, on March 15, the permanent representatives of the Member States reached an agreement on the text.
But this compromise comes at a price: according to the final text, the rules will apply only to companies employing more than 1000 people and generating annual revenue of 450 million euros. Initially, the agreement concluded by negotiators in late December targeted companies employing more than 500 people and generating revenue of 150 million euros.
Supply chain control obligations will no longer apply to end-of-life products, as originally envisaged. The representatives of the Member States also removed any reference to high-risk sectors (these sectors would have been subject to stricter duty of care). The obligation for companies to have a climate plan has been retained.
The text has already been approved by the Legal Affairs Committee in Parliament. It must now be approved by Parliament. The Council must also formally approve the text.
PARLIAMENT VS COMMISSION • The Legal Affairs Committee of the European Parliament approved, on March 11, the filing of legal action against the decision of the European Commission to release 10.2 billion euros in funds for Hungary. On March 14, Parliament President Roberta Metsola confirmed that the legal action will be filed before the deadline of March 25.
This legal action is "a sign to the President of the Commission that the rule of law cannot be traded for agreements with Orban," says Green MEP Daniel Freund.
The European executive had blocked 21.7 billion euros from the Cohesion Fund earmarked for Hungary for the period 2021-2027 in December 2022, pending reforms by Budapest, notably in terms of independence of the judiciary and fundamental rights.
By unblocking part of these funds on the eve of the December 2023 European summit, the Commission was accused of giving in to Budapest's "blackmail," which had repeatedly blocked the 50-billion-euro aid package for Ukraine, finally adopted at the European Council on February 1. The EU still retains 10 billion euros from the Cohesion Fund, including 6.3 billion under the European Rule of Law Mechanism.
The chances of success of the legal action remain low, as Parliament will have to prove that the Commission's decision exceeded the scope of its discretionary power.
PLENARY • Several important texts were adopted during the last plenary session of Parliament, which took place from March 11 to 14, including:
The Artificial Intelligence Act (AI Act), a regulation that creates a European framework to regulate the use of artificial intelligence, was formally adopted by an overwhelming majority.
The Media Freedom Act was also formally adopted. This regulation aims to protect journalists and press freedom across the EU.
DSA • The Digital Services Act — the European regulation aimed at creating a safer digital space and protecting users' fundamental rights — has been in the starting blocks since it entered into force on February 17.
1. Last week, the European Commission announced that it had initiated a formal procedure to determine whether AliExpress, the online sales platform operated by the Chinese tech giant Alibaba, had violated the DSA. AliExpress is suspected of not doing enough to combat the dissemination of illicit content — more details here.
AliExpress is the second "very large online platform" (VLOP) in China, after TikTok, to be investigated under the DSA.
2. During the same week, the Commission sent information requests to six VLOPs — Facebook, Snapchat, TikTok, Youtube, X, and Instagram — and two "very large online search engines" (VLOSE, the second actor targeted by the DSA) — Google Search and Bing — about their respective measures to mitigate risks related to generative AI, particularly regarding deepfakes.
3. Finally, the Commission sent an information request to LinkedIn regarding its compliance with the prohibition, under the DSA, of targeted advertising using personal data based on special categories such as ethnicity, political opinions, or sexual orientation.
UKRAINE • On March 13, EU ambassadors agreed on the reform of the European Peace Facility (EPF). This revision provides for a new envelope of 5 billion euros for the year 2024, specifically for the purchase of military equipment, lethal and non-lethal, for Ukraine, as well as the training of Ukrainian soldiers.
The EPF is a new off-budget instrument to finance operational defence actions. With an initial ceiling of 5.6 billion euros for 2021-2027, the EPF has been revised several times since the start of the conflict in Ukraine.
The agreement reached this week is the culmination of lengthy negotiations. The reason for this is the desire of France, supported by Greece and Cyprus, to obtain guarantees on the European origin of the weapons funded by the EPF. Priority was ultimately given to the European defence industry, while allowing flexibility in cases where it "cannot supply within a timeframe compatible with Ukrainian needs."
In addition, Germany has expressed reluctance to use such a European mechanism, preferring bilateral aid. The agreement provides that the direct contributions of Member States be counted in the calculation of their share within the EPF.
Finally, to prevent Member States reluctant to contribute to the Ukrainian war effort from blocking the revision of the EPF, notably Hungary and Slovakia, the text allows for a workaround to place their contribution in another aid measure from the EU budget.
What We’ve Been Reading
Paul Hermelin and Aiman Ezzat advocate for a policy of support for innovation in artificial intelligence in a column for the Institut Montaigne.
In an analysis for the ECIPE, Matthias Bauer, Dyuti Pandya, and Oscar du Roy highlight Europe's strengths in international trade in digital services.
The EU is called upon to play a larger role in defending the continent, explains Luigi Scazzieri of the CER.
Fondapol and Fondazione Magna Carta jointly publish a collection of twenty-two texts by leading Italian and French figures in European construction, with the conclusion signed by Dominique Reynié.
This edition was prepared by Augustin Bourleaud, Luna Ricci, Gianni Gaboret, Thomas Blanda, Maxence de La Rochère and Hana Rajabally. See you next week!