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Europe

Europe's digital future on the table at Tallinn summit

media The 28 EU leaders in Tallinn, Estonia on September 29, 2017. REUTERS/Ints Kalnins

European Union leaders met to discuss the union's digital future this Friday at a summit in Tallinn, Estonia, just days after French President Emmanuel Macron unveiled his ambitious plans to reform Europe’s system of taxing tech multinationals.

Earlier this week, Macron proposed harmonising Europe’s corporate tax rates in a bid to close tax loopholes that currently benefit internet giants such as Facebook and Google.

Currently, tech multinationals are only taxed on the profits they report in their European country of residence: in other words, the European country where their headquarters are located. For this reason, companies often choose states with lower corporate tax rates, like Ireland or Luxembourg.

Macron has proposed to change this. Under his plan, tech multinationals would be taxed based on the total revenue generated in EU member states. This would mean multinationals such as Apple would no longer be taxed on profits reported in its European country of residence alone, but on all sales revenue generated throughout the EU. A proposal backed by Germany and a dozen of the EU’s 28 member states, but opposed by smaller countries such as Ireland, who argue the measure would make them less competitive and less attractive to US tech giants.

"[Macron] is the key player now in Europe for digital affairs," explains William Echikson, head of the Centre for European Policy Studies’ Digital Forum. "If you look at the Baltic countries, Scandinavia, and countries like Holland and Belgium, they're all pro-digital. It's the big four Spain, France, Germany and Italy that have been blocking reforms. Who knows where France will go now? Macron says he wants a start-up nation."

Europe’s cybersecurity challenge

EU leaders also discussed cybersecurity and the free flow of data in Europe.

These issues cover “pretty much everything that the European Commission does” regarding the Internet, “whether it’s regulating individual media services, copyright, or dealing with harmful content,” says Joe McNamee, executive director of the NGO European Digital Rights.

"There's been a focus on a wide range of ideas, such as ensuring we have enough trained experts being able to exploit the opportunities in front of us," explains Scott Marcus, a senior fellow with Bruegel, a European Think Tank, referring to cybersecurity start-ups in Europe.

However, one key topic was not discussed: European citizens’ rights online.

"Despite the fact that the EU Charter of Fundamental Rights provides guidance on how policy should be developed, we find it more and more difficult to have to remind the commission that the rule of law should also be defended online," says Marcus.

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