Neelie Kroes Replaces Viviane Reding to Lead EC Digital Agenda

If approved by the European Parliament, the EC will have 27 members including Barroso, with nine women. Fourteen members are part of the outgoing panel. Reding becomes a vice president and is second in line to stand in for Barroso when he’s away.

Barroso rejiggered several portfolios, including that of information society and media, now known as the “digital agenda.” Kroes will be responsible for information society and European Network and information Security Agency issues. The new Health and Consumer Policy Commissioner, John Dalli, will lose his consumer contract and marketing law section to Reding’s justice department. Internal Market and Services’ duties, which include copyright issues, will remain the same. The Transport directorate, to be headed by Commissioner Siim Kallas, will lose its jurisdiction over satellite navigation issues such as Galileo to the Industry and Entrepreneurship directorate.

Kroes Gets Mixed Review

“Neelie Kroes has been a firm and efficient competition commissioner, but nothing in her background raises much hope that she will push a strong digital rights agenda,” said Philippe Aigrain, CEO of the French Society for Public Information Spaces and a co-founder of digital advocacy group La Quadrature du Net.

Kroes is considered very pro-consumer, said attorney Peter Strivens, head of Baker & McKenzie’s London telecom practice. Telecommunications regulation balances industry and consumer issues and Kroes is expected to come down on the consumer side, he said. The recently finalized telecom reform package left several consumer issues hanging, such as whether to extend data breach notification laws to sectors other than telecom, he said.

The change of duties may spark reconsideration of past positions, an industry source said. Kroes trusts the technical advice of the EC staff, and the Information Society and Media directorate is much more pro-competition and inclined to regulate entire sectors than the competition directorate as far as telecom is concerned, the source said. Kroes is used to dealing with big, dominant international players, such as Microsoft, but most incumbents telecom companies are dominant only inside their own borders, which could cause her to revise earlier stances, the source said.

On the other hand, Kroes has pushed to cut the number of telecom markets subject to regulation, the industry source said. She opposed giving national authorities the power to order dominant companies to split their network and services arms (functional separation) and favors some deregulatory tools for next-generation access networks, the source said.

Kroes’s challenge in the digital economy will be to enforce the rules at a time when “protectionism is rife and incumbents are strengthening their market position at the expense of fair competition and consumers,” said European Competitive Telecommunications Association Chairman Innocenzo Genna. Given her track record of tough action against abuses by dominant firms, “we trust she will have the determination to do the job thoroughly,” he said.

But another industry source said Kroes’s new role may prove difficult for her. As competition commissioner, she had the power to make her own decisions, but the information society area, like most other EC directorates, requires consensus-building, the source said. Kroes is perceived as being “on the authoritative side of things,” the source added.

The deployment of next-generation access networks will be one of Kroes’s key challenges, said European Telecommunications Network Operators’ Association Director Michael Bartholomew. The creation of a digital agenda slot reflects how important information and communication technology is for the economy and society as a whole, he said.

Effect on Digital Economy Issues Unclear

Copyright issues will stay within the internal market directorate. Since new commissioner Michel Barnier was put there at the insistence of French President Nicolas Sarkozy, the amount of influence Kroes will have in digital copyright issues is very important, said European Digital Rights Advocacy Coordinator Joe McNamee. With the digital content market “functioning extremely badly at the moment - with lack of innovation continuing to lead to illicit use of cultural products” - Kroes’s experience as competition commissioner could prove valuable “if she has the power to shake things up,” he said.

Barnier was a respected commissioner when he was in charge of regional policy and inter-institutional affairs, said Aigrain. He then returned to the French government, where he has been low-profile and hasn’t criticized Sarkozy’s “aggressive control-minded Internet policy,” he said. It’s feared Barnier will stick to the dogmatic approach taken by France, he said.

There’s “limited hope” that the internal market directorate will propose changes to copyright, patent and intellectual property rights enforcement policy, Aigrain said. IPR and enforcement are in practice dealt with jointly by internal market and trade commissioners, he said. It’s likely that the Anti-Counterfeiting Trade Agreement and its opaque governance will be one of the first tests of whether the two new officials “have the stature to stand for European citizens’ interests rather than sticking to the business-as- usual service to large publishing and media distribution lobbies,” he said.

Reding earned respect for her strong stand on fundamental rights in the digital world despite pressure from governments on such things as France’s three-strikes approach to digital piracy and controversial language in the telecom reform measure barring Internet disconnection without a prior judicial order, Aigrain said. Her nomination as commissioner for justice and fundamental rights “is a kind of tribute” to her stand, he said. “But how much power will she have to stand for digital rights in this new position?”

One of the first things the new competition commissioner, Joaquin Almunia, should do is to launch a inquiry into the telecom sector, the foundation on which the digital economy is based, said ECTA’s Genna. Barroso made ICT one of his top-ten priorities for economic growth, and the telecom arena is one that needs urgent action to stop dominant players from reawakening, he said.

The new EC will run until Oct. 31, 2014. There will be parliamentary hearings Jan. 11-19, with a vote expected Jan. 26, the EC said.