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UNCTAD Policy Brief: Making Digital Platforms Work for Development

The United Nations Conference on Trade and Development (UNCTAD) published a new policy brief that pinpoints the opportunities and challenges of digital platforms for development. the report notes that digital platforms can enhance efficiency through reducing transaction costs, decreasing customer prices, improving market access, ameliorating the use of underutilised resources, boosting flexibility for services provision, and promoting competition. Yet, the market power of certain digital platforms represents a challenge, let alone the pertinent ramifications on competition and consumer protection, data protection and privacy, taxation, and employment and working conditions. The report suggests that to capitalise on digital platforms and to address their social, political, and economic knock-on effects, such challenges should be tackled through sound policies and regulations. Further discussion on digital platforms for development is planned to take place during the global eCommerce Week 2019, 1-5 April at Palais des Nations, Geneva, Switzerland.

Australian government is working on a new income reporting regime for sharing economy workers

Australian federal government wants to make sure that on-demand economy worker pays their fair share of taxes. The Treasury published an industry discussion paper containing proposals for a mandatory regime of taxes for people working in the sector. The measure would include companies such as Uber, Deliveroo and Uber eats, among others. Sharing economy has experienced significant growth in Australia, and authorities are concerned that there is a possibility that some workers do not report their current income to avoid paying the right amount of taxes. The Transportation Workers Union of Australia has condemned the proposal, alleging that, first, the government should consider regulating the on-demand economy to protect workers, including legislation on minimum pay, superannuation, sick leave, and the possibility of collective bargain. 

Amendments to the EU copyright directive are approved by the European Parliament

The European Parliament approved amendments to the Directive on Copyright in the Digital Single Market 2016/0280(COD), also known as the EU Copyright Directive, which intends to harmonise aspects of the copyright law across the EU. The vote included two controversial points, enshrined in Articles 11 and 13, dubbed the 'link tax' (or ‘snippet tax’) and the 'upload filter' by critics. Article 11 is intended to give publishers and newspapers a way to make money when companies like Google link to their stories. It extends the 2001 Copyright Directive to grant publishers direct copyright over "online use of their press publications by information society service providers". Search engines and online platforms, like Twitter and Facebook, will have to pay a license to link to news publishers when quoting portions of text from these outlets. The bill says that the new rights given to publishers “shall not prevent legitimate private and non-commercial use of press publications by individual users”. However, it does not make clear what counts as ‘portions of the text’ or as a commercial platform which could allegedly encompass blogs, RSS feeds, or a Facebook page operated by an individual who has a considerably large audience for example. Article 13 says that online platforms are liable for content uploaded by users that infringes copyright. It requires that platforms proactively work with rightsholders to stop users uploading copyrighted content. This could potentially mean scanning all data being uploaded to sites like YouTube and Facebook. This measure could affect memes - images or videos that spread 'virally' online, often accompanied by a witty snippet of text - and music remixes shared online. The proposal will now enter negotiations between the Council of the EU, The European Commission and the Parliament. If these three bodies agree, it will be sent to each EU member state for implementation in 2019.

The Legal Affairs Committee of the European Parliament (JURI) adopted the proposed version for copyright reform

The Legal Affairs Committee of the European Parliament (JURI) adopted the proposed version for copyright reform, including highly disputed Article 13 as well as tax provisions in Article 11 of Copyright Directive. The biggest controversies about this reform were around the text of Article 13 that practically requires some form of filtering and monitoring measures from internet platforms. In spite of the strong criticism of this article from NGO and expert community, this text is going into the further legislative procedure. Even though it is still possible for things to change up to the final vote in EU Parlament, this would be very uncommon in this stage.

Is EU copyright reform bringing modernization or new challenges?

EU Commission announced that legislative work about reform and modernization of copyright legislation is coming to an end. The new set of rules are primary trying to ease cross-border access to content online, create wider opportunities to use copyrighted materials in education, research and cultural heritage and to create better -functioning copyright marketplace. However, the expert community is really worried about the real effect of these changes, especially proposed article 13 of Copyright Directive. This article requires internet platforms that host a large amount of user-generated content and that optimize that content, to take measures that should enable functioning of agreements concluded with rights-holders for the use of their works. In essence, this article would require internet platforms to police content on their platforms in order the remove the ones that infringe right holders copyright.  This would severely affect freedom of speech and can lead to some form of censorship, especially in regard to memes, re-mixes, and similar content. The very application of algorithms and various filtering mechanisms would, even more, threaten freedom of speech. Numerous organization already addressed their concerns in the letter addressed to EU Parlament.  Another disputed provision of this Directive is article 11 that should impose so-called  "snippet tax" which would require companies to pay some form of tax when they use short extracts from other news publications. The next step for this proposal is voting in EU Parlament that should be at the end of the month.

Uganda passes social media tax law

The Ugandan government has decided to impose a tax on the use of social media in an effort to increase revenue. Users will be charged with a daily rate of 200 shillings ($0,0531) to use services such as Facebook, Twitter and Whatsapp. The government’s plans have drawn criticism over the last months and is feared to stifle freedom of expression and political organisation. The law is due to take effect in July 2019 and will be collected daily by mobile phone operators.

Amazon blocks Australian users from international sites due to new tax laws

As a result of Australia’s new tax laws - which require online retailers to collect a 10% goods and services tax on all overseas purchases from 1 July - Amazon has announced that it will no longer provide Australian shoppers with access to its international websites. Instead, Australians will only be able to use Amazon’s smaller Australian site. Amazon states that while regretting the inconvenience caused by the measure, ‘we have had to assess the workability of the legislation as a global business with multiple international sites’.

Emmanuel Macron meets tech companies at the Elysée palace

French president Emmanuel Macron has held a meeting with about 60 key figures of the tech industry, including Facebook’s Mark Zuckerberg, Uber’s Dara Khosrowshahi and Microsoft’s Satya Nadella. During the meeting, he reportedly warned the industry that they cannot just be ‘free riding’ without giving back to society and helping to improve ‘social situations, inequalities, [and] climate change’. The issue of taxation was one of the key discussion topics. In addition, with the meeting, Macron hoped to boost investment and jobs in France, especially in the area of artificial intelligence. Macron also discussed issues as data protection, hate speech, and fake news with the technology companies.

Israeli communications companies VAT exempt in their dealings with international tech firms

Following an eight-year dispute between the Israeli tax authority and a large group of Israeli communications companies, officials have concluded that the group is exempt from value added tax (VAT) in its agreements with international tech firms. The case started in 2010, when the communication companies issued a request for a tax exemption in their engagement with Google, considering that Google does not pay VAT on its transactions in Israel. In 2013, the tax authority refuted the claim and responded that it charges full VAT for the services provided to Google by Israeli companies. The authority soon faced criticism based on claims that companies not based in Israel - such as Google and Facebook - pay no VAT, while Israeli companies pay VAT on their transactions with them. This has ultimately resulted in the authority’s decision to retreat from its original position and it notified the communications group that the Israeli companies will be exempt from VAT on the services they provide to Google and other international tech firms.

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