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Summary

On January 10, 2017, the European Commission (EC) issued a proposal for a new ePrivacy regulation. This would replace the existing ePrivacy directive, which obliged telcos to guarantee the confidentiality of users' communications. The rules show that over-the-top providers (OTTs) are now firmly on the radar of regulators because OTT communications are increasingly seen as a substitute of traditional services. The rules also provide telcos with new opportunities to use communications data; however, they fail to provide a clear framework for data retention for purposes related to fighting crime.

New uses of data will be possible for telcos, but data retention rules remain a gray area

There are at least three noteworthy aspects of the proposal. First, it is a Regulation, like the recently adopted General Data Protection Regulation (GDPR). This means that it will be instantly valid across the EU once it is approved, without the need for national legislators to transpose it into law. This aims to ensure more consistency; however, it is likely that there will be longer and more complex negotiations before it is approved. Considering that it took more than three years for EU institutions and member states to pass the final version of the GDPR, the stated aim to finalize the new ePrivacy regulation by May 2018, when the GDPR will come into force, is likely to be unrealistic.

Second, compared to the current ePrivacy Directive of 2002, which only applies to telcos, the proposal expands its scope to OTTs. For some time now, the EC has shown awareness of the fact that the communications landscape is changing and that the definition of electronic communications provider can no longer apply to telcos only. This has already become clear in the proposals for a review of the telecoms regulatory framework, currently under discussion. The new ePrivacy regulation is a step in the same direction because it acknowledges that OTT communications services are increasingly popular and are a substitute of traditional communications services such as voice and text. Services such as WhatsApp, Skype, or Facebook Messenger will be required to guarantee the same level of confidentiality as traditional communications services.

Third, the proposal aims to give telcos more freedom to use customers' data, providing that consent has been obtained from the customer. Under the current rules, telcos can only process traffic and location data for Wi-Fi hotspots in areas of need or value-added services, such as proposing communications packages better suited to customers' consumption. They can also process this data for billing purposes so customers can verify their actual consumption. It is now been proposed that the companies should be allowed to process communication content and metadata for other purposes if users have given their consent and provided that the company complies with privacy safeguards. Telecoms operators should now have more opportunities to process metadata to provide additional services, which will in turn help them find new revenue streams.

Nonetheless, the proposal does not clarify the gray area around the issue of data retention for the purpose of tackling crime. The EC clearly stated that the proposed regulation does not harmonize rules on data retention, even though it acknowledges member states' competence on national security, as enshrined in the Treaty on European Union. Recent rulings of the European Courts of Justice, such as the one of December 2016 against the UK Investigatory Powers Bill, showed how controversial and uncertain the matter can be in the absence of a clear framework.

Appendix

Further reading

The EU's General Data Protection Regulation, TE0007-001037 (August 2016)

Regulatory Developments in Data Protection and Data Retention in the EU, TE009-000987 (July 2013)

Author

Luca Schiavoni, Senior Analyst, Regulation

luca.schiavoni@ovum.com

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