Margrethe Vestager: Tech Startups Currently Need Investments More Than Ever

Tech startups currently need investments more than ever, especially when it comes to developing specialized artificial intelligence, claims Margrethe Vestager, Executive Vice President of the ‘Europe Ready for the Digital Age’ program and Commissioner for Competition Policy at the European Commission, who spoke this week with Croatian journalists about the development of artificial intelligence in Europe.

She also highlighted that the Artificial Intelligence Act will come into force in the next year and a half and will prohibit harmful uses of artificial intelligence and regulate artificial intelligence in high-risk areas such as education and healthcare. However, when it comes to regulating artificial intelligence, the question always arises whether it limits innovation.

– We have been discussing this since the first draft of this regulation. This Act does not limit innovation in any way. You can research and create as much as you want, but when you put your innovation into use, you may feel the consequences of this Act. For example, if you use artificial intelligence in customer service, you must inform your clients that it is a bot, and if you work with artificial intelligence in riskier businesses, it must be under human control to avoid endangering anyone – explains the Commissioner at the European Commission.

She provided an example of using artificial intelligence in healthcare, where it is beneficial if you train your artificial intelligence tool on medical data from several tens of thousands of different patients, but if you do not train it well and, for example, train it with more male data than female data, there could be problems because sometimes women and men can have different symptoms of diseases that the algorithm might not recognize.

Vestager also referred to the Digital Services Act and the Digital Markets Act, stating that they are currently working on six cases against large tech companies, or so-called ‘Big Tech’, with one of the financially most challenging being the case against Apple. Recall that in March, Apple was fined €1.84 billion in an antitrust case, which is the first such case for the company, and the reason for the fine was preventing Spotify and other music streaming services from informing users about payment options outside of Apple’s App Store.

The European Commission’s decision was initiated by Spotify’s complaint from 2019 regarding this restriction and Apple’s 30 percent fees for the App Store, Reuters reported. The European Union’s competition enforcement agency stated that Apple’s restrictions represent unfair trading conditions, which is a relatively new argument in the competition case, and it was also used by the Dutch competition authority in its decision against Apple in 2021 in a case initiated by dating app providers.

Another Procedure Launched Against Meta

Vestager then stated that this is the first time the Commission has added a flat amount to an antitrust fine. Although Apple can pay such fines, when asked by journalists specifically about Apple’s case, Vestager said that the fines they issue can only relate to segments of companies where they see illegal behavior.

– The fine we imposed on Apple is exclusively related to illegal activities of their streaming application, which is just a small segment of everything this company offers in its portfolio. This fine also serves as a warning that companies must stop such behavior and rectify the damage done – said Vestager, adding that companies often want to challenge the decision in court, but such fines damage the reputation of companies, which has a significant impact on the market.

It is worth noting that today the European Commission launched an official procedure to assess whether Meta, the parent company of Facebook and Instagram, has violated the provisions of the Digital Services Act related to the protection of minors. They are concerned, they claim in an official statement, about the development of addiction to social networks and the methods of age verification for children.

– Today we are taking another step to ensure the safety of young internet users. We are concerned that Facebook and Instagram may encourage the development of addiction and that the age verification methods that Meta has implemented on its services are not appropriate. A thorough investigation will now be conducted. We want to protect the mental and physical health of young people – stated Vestager.

The initiation of this procedure is based on a preliminary analysis of the risk assessment report that Meta sent at the Commission’s request in September last year. Namely, the Commission had already initiated an official procedure against Meta at the end of April, also regarding Facebook and Instagram, due to misleading advertising, political content, and the notification and action mechanism, access to data for researchers, and the unavailability of effective civic discourse in the real world and tools for monitoring elections ahead of the European Parliament elections.