EU Council rejects European Commission’s Wi-Fi plans for connected and autonomous vehicles

In the latest development in the EU’s long-running debate on the preferred communication technology standard for connected and autonomous vehicles (CAVs), the Council of the EU has rejected the Commission’s proposed legislation favouring Wi-Fi technology (the “Regulation“). Twenty one (of twenty eight) Member States voted against the Regulation; a result seen as victory for proponents of 5G technology.

 Lobbying pays off (for some)

The Regulation, once implemented, would dictate how CAVs ‘talk’ to each other and road infrastructure across Europe, including about traffic, hazards, speed and so on.

As previously reported here, the Regulation has been hotly debated since it was originally published in March 2019.  The issue of which communication technology standard should be preferred for CAVs – short range Wi-Fi or long range cellular (C-V2X) utilising 5G – has split the automotive and tech industries and resulted in fierce lobbying from both sides.

The Council’s decision to vote down the Regulation will come as welcome news to 5G supporters (including BMW, Daimler, Qualcomm, Samsung and Intel) who see CAVs as a key use case for 5G technology, with there being significant synergies between the roll-out of CAV technology and public 5G networks (see our previous article for further detail). By contrast, the decision is a blow to the likes of VW, Toyota and Renault, who have backed the Wi-Fi standard.

Technological neutrality

The fact that the Regulation favoured one technology over another has proved controversial throughout, with concerns being raised by various stakeholders as to the limitations it could place on the market.  Indeed, one of the principal reasons given by the European Parliament’s Transport Committee for recommending that the Regulation be rejected was that the Regulation’s favouring of Wi-Fi technology is not ‘a truly technologically neutral approach’.

This concern was also clearly at play at the Council level.  Member States including Spain and Finland had previously made clear that they want there to be fewer regulatory restrictions in the Regulation.  Of the twenty one Member States that voted to reject the Regulation (including countries with powerful automotive industries such as Germany, Italy and France), most cited the need for technological neutrality.

 Potential for further delay

Proponents of the Regulation in its existing form, notably the EU’s Commissioner for Transport Violeta Bulc, have long argued that Wi-Fi technology based on the existing ITS-G5 standard offers the quickest route to Europe achieving the widespread uptake of CAVs. However, the Council’s decision will require the Commission to reconsider its proposals and redraft the legislation in preparation for another vote later in the year.

Ms Bulc is clearly keen to avoid any significant delay stating that “we cannot miss this opportunity and lose valuable time to make our roads saferwe will therefore continue to work together with member states to address their concerns and find a suitable way forward.”  However, that is easier said than done.

 

David Coulling
David Coulling
Partner, London
+44 20 7466 2442
Lode Van Den Hende
Lode Van Den Hende
Partner, Brussels
+32 2 518 1831
James Allsop
James Allsop
Senior Associate, Tokyo
+81 3 5412 5409
Milan Baxter
Milan Baxter
Associate, London
+44 20 7466 6441

Cities of the Future

In the spring edition of In-House Lawyer, Matthew White looks ahead to the ever-changing challenges and opportunities of urban growth.

“The We Company recently announced new ‘future cities initiatives’ which will combine technology, data and real estate to ‘help address problems spurred by globalisation, urbanisation and climate change.’ The project will involve a team of engineers, architects, data scientists and biologists.

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European Parliament endorses Wi-Fi based technology as the proposed technical standard for connected and autonomous vehicles

The European Parliament has voted to favour Wi-Fi technology based on the existing ITS-G5 standard as the communication technology standard to be adopted for connected and autonomous vehicles (CAVs) across Europe (307 in favour and 207 against).

The decision comes after months of intense lobbying and goes against the European Parliament’s own transport committee’s recommendation to reject the Commission’s delegated act on the preferred communication technology standard for CAVs (the “Regulation“).  As we previously reported (see here), the transport committee had raised concerns about the impact that favouring Wi-Fi technology may have on innovation and technological neutrality.

Split opinions across industry

The decision will be seen as a positive result by longstanding proponents of Wi-Fi technology such as Volkswagen, Renault and the EU’s Commissioner for Transport, Violeta Bulc. They have argued that favouring Wi-Fi technology gives Europe the best chance of achieving its goal of a rapid and widespread uptake of CAVs.

On the other hand, telecoms industry bodies 5GAA and GSMA, as well as other leading automotive manufacturers including Daimler and BMW, have supported long-range cellular technology (including 5G) as their preferred technology standard for CAVs, citing its ability to future-proof Europe’s CAV network and enhance the EU’s reputation as global leader in CAV development and technology.

Next steps

The European Council must now approve the Regulation before it can come into force on 31 December 2019. A vote is expected to take place in the coming weeks but has not yet been timetabled.

David Coulling
David Coulling
Partner, London
+44 20 7466 2442
Lode Van Den Hende
Lode Van Den Hende
Partner, Brussels
+32 2 518 1831
James Allsop
James Allsop
Senior Associate, Tokyo
+81 3 5412 5409
Milan Baxter
Milan Baxter
Associate, London
+44 20 7466 6441

European Parliament’s transport committee opposes Commission’s preference for Wi-Fi as the communication standard for connected and autonomous vehicles

Following months of debate, the European Commission approved its long-anticipated delegated act on the preferred communication technology standard for connected and autonomous vehicles (CAVs) on 13 March 2019 (the “Regulation“, available here). However, the Commission’s decision – favouring Wi-Fi technology based on the existing ITS-G5 standard for short-range communications (V2V) – has already hit a road block: it was rejected by the European Parliament’s transport committee on Monday.  There will now be intense focus from industry on whether the European Parliament vote next week follows its transport committee’s recommendation to block the Regulation.

In this post, we consider the content of the Regulation, why the Commission’s decision has proved so controversial and what may happen next.

Interoperability, backwards compatibility and an opportunity to review

CAV interoperability (the need to ensure that CAVs can ‘talk’ to one another) and backwards compatibility (the need to ensure that later versions of CAV systems / infrastructure work with CAVs that are already on the road) remain key goals for the Commission and the Regulation’s explanatory memorandum stresses these issues.  The Commission also expressed the desire to achieve these goals with minimal legal requirements; preferring instead to rely on the existence and evolution of relevant technical standards.

In an attempt to address the interoperability and compatibility of CAVs, the Commission has inserted a review clause into the Regulation, which will be triggered three years after it enters into force (potentially on 31 December 2022).  At the review stage, the Commission will assess the implementation of the Regulation and consider the status of communication standards such as long-range cellular technology (including 5G) (C-V2X), with a view to potentially amending the technical standards in the Regulation to accommodate these other standards.

The review clause is the Commission’s attempt to ‘future-proof’ the Regulation by allowing it to ‘wait and see’ how technologies such as 5G develop over the coming years. However, many commentators consider the review clause to be little more than an attempt by the Commission to come up with a compromise position, which in reality serves to delay its real decision by another three years.

In the meantime, however, the Commission has selected the Wi-Fi based ITS-G5 standard for V2V communications on the basis that it is a mature, tested and readily available technology, which it hopes it will rapidly accelerate the uptake of CAVs across Europe. The Commission also suggests that stakeholders prepare their CAV products in a way that allows for the integration of future technologies and encourages the adoption of a ‘hybrid communication’ approach that includes both V2V and C-V2X technologies.

An unsatisfying result for (some) lobbying groups

The Commission is seeking to present the Regulation as granting car manufacturers and road operators the ‘long-awaited legal certainty’ to begin CAV development, whilst ‘remaining open to new technology and market developments.’ However, the review clause alone is unlikely to appease the multiple stakeholders and trade groups that were seeking a firmer commitment from the Commission on technology standards.

Trade groups GSMA and 5GAA have already criticised the Commission’s decision, saying that ITS-G5 is an outdated technology and its selection by the Commission hampers the digital competitiveness of the EU.

Impact on 5G rollout

Although the EU has publicly committed to the adoption of 5G services by 2025, the economic argument for telecoms companies to build the new infrastructure required for 5G networks would have been given further weight if the Commission had given 5G technology regulatory backing in the Regulation. Telecoms companies, numerous Member States and infrastructure investors see CAVs as a key use case for 5G technology, with there being significant synergies between the roll-out of CAV technology and public 5G networks (see our previous article for further detail).

The Commission’s decision to favour Wi-Fi (at least in the short term) will impact short term business cases for 5G roll-out and may impact investment plans over the next few years to build the expensive infrastructure (radio equipment, fibre and data centres) at scale to support new 5G services (the cost of which the Commission itself has estimated at EUR 500 billion).

A ‘technologically neutral’ approach?

Another controversial aspect of the Regulation is the perception that the Commission is favouring one technology over another. As previously reported (here), a number of Member States, including Spain and Finland, have expressed concern regarding the level of regulatory restrictions proposed in the Regulation.

This issue was also raised by the European Parliament’s transport committee in its review of the Regulation. In its reasons for recommending that the European Parliament reject the Regulation (available here), the committee stated that the Regulation’s favouring of Wi-Fi technology is not ‘a truly technologically neutral approach’. It also suggests that the Regulation’s requirement for backwards compatibility with Wi-Fi technology sets ‘limits to the development of innovative transport C-ITS systems across Europe’.

Deepening jurisdictional divides

The Regulation, if approved by the European Parliament, would add to the deepening jurisdictional divides that are emerging with respect to technology standards for CAVs. The Regulation’s preference for Wi-Fi would see the EU aligned with the approach taken by Japan, but be at odds with China’s election for C-V2X (see here). The US, meanwhile, previously mandated Wi-Fi V2V technology back in 2016 but has not moved forward with the regulation since, leaving the door open for C-V2X.

This mixed geographical approach means that manufacturers will need to invest in both technologies in order to cater for global markets, creating complexities in their global supply chains.

European Parliament to vote on proposals next week

As a so-called ‘delegated act’ (prepared by a panel of experts from Member States), the European Parliament and Council must each either approve (expressly or by tacit acceptance) or object to the Regulation within a two month period following its publication. If neither objects, the Regulation will come into force on 31 December 2019.

It is unclear how the European Parliament will vote.  Typically, it will follow the recommendation of the transport committee.  However, continued heavy lobbying by proponents of V2V technology, including the VW Group and the European Commissioner for Transport, Violeta Bulc, may be enough to see the Regulation over the line.

The European Parliament will hold a full vote on the Regulation at its plenary session from 15 – 18 April 2019. Should the Regulation be rejected, the Commission will have no choice but to reconsider its approach.

Conclusion

While there continues to be argument on both sides as to whether the approach taken by the Regulation is the right one, it is clear that more certainty is needed (one way or the other).  The successful deployment and operation of CAVs requires proven interoperable communication solutions.  Further, given the lead-time in car manufacturers’ design and production timelines, there are necessarily technology choices to be made by industry in the coming year in order to deliver vehicles for scaled testing and early adoption in Europe.

It is however unusual for the Commission to be willing to play a leading role in early technology choices in a growing market, and with this in mind, we are not surprised that any technology selection in the Regulation will be the subject of a short term review.

 

Lode Van Den Hende
Lode Van Den Hende
Partner, Brussels
+32 2 518 1831
David Coulling
David Coulling
Partner, London
+44 20 7466 2442
James Allsop
James Allsop
Senior Associate, Tokyo
+81 3 5412 5409
Milan Baxter
Milan Baxter
Associate, London
+44 20 7466 6441

Driving Data Compliance

Connected autonomous vehicles (CAVs) are increasingly capable of creating, collecting and processing a wealth of data. However, in order for vehicle manufacturers and CAV stakeholders to access and extract the value in such data, they must do so lawfully. This is especially true in relation to personal data which is governed in the EU (and beyond) by the General Data Protection Regulation (GDPR). This post explores at a high level how CAV stakeholders can ensure compliance with the GDPR, particularly in relation to CAVs which process personal data of vehicle drivers, owners and pedestrians.

What data are we talking about?

The prospective data inputs and outputs for CAVs vary depending on CAVs’ capabilities. For example, current driver-assist models tend to be based on semi-autonomous features such as dynamic cruise control and lane keep assist. These driving technologies typically rely on sensors which monitor mechanical, physical, spatial and environmental conditions (e.g. speed, distance, location, weather etc.). Much of this data is not ‘personal’ to individuals, and hence is not governed by the GDPR.

However, as CAVs become “smarter”, the potential for them to recognise and adapt to individual drivers, and to fully and autonomously connect to other vehicles and drivers, renders the CAV data ecosystem much more personal and regulated.

What is ‘personal’ data?

Smart vehicles can collect individual preferences about driving position set up, data from connected devices such as mobile phones, driving behaviours such as speed and braking, viewing preferences for ‘infotainment’ systems and numerous other insights into the lives of vehicle drivers, passengers and owners, especially as CAVs connect to other external data sources.

Personal data is defined under the GDPR as information that relates to an identified or identifiable individual. Special category data, which includes racial or ethnic origin, health or biometric data, and criminal offence data invites greater protection. It is clear that both types of personal data naturally arise in connection with CAVs.

Examples of personal data collected or processed by CAVs range from the obvious (e.g. addresses stored in a satnav system and video footage collected by an embedded dashcam) to the more subtle (e.g. speed limit adherence – breaching the speed limit can be a criminal offence, and it is possible that a manufacturer or owner could link this offence to a known driver of the vehicle, thereby giving the manufacturer criminal offence data). The sheer volume and variety of data collected and processed by CAVs is such that it could accumulate over time or be combined with other information to a level where, even if collected anonymously in the first instance, the data could subsequently become personal data and invite specific protection.

 Lawful basis and fair processing information

In the CAV scenario, perhaps the first thing to consider from a GDPR perspective is who would be the “controller”. This is the entity with the greatest regulatory responsibility under the GDPR; the entity that collects the data and decides what will be done with such data. In the CAV value chain there are a number of stakeholders who could be acting as the controller, or potentially all of them could be independent or joint controllers. For example, the manufacturer, the software developer/provider, the employer entity (when dealing with a fleet of vehicles owned by a company and driven by its employees), the owner. It is therefore important that every CAV stakeholder in the value chain considers its regulatory position under the GDPR.

To collect and process personal data, the controller of the data must have a lawful basis for doing so. One such lawful basis can be to inform the individuals affected about the intended uses of their personal data, and to obtain their consent to such processing. However, relying on consent under the GDPR may prove difficult where it is a precondition to using a CAV or smart vehicle. Consent will only be valid under the GDPR if it is freely given and so it cannot be a prerequisite to ownership or use of the vehicle. Consent could also be difficult in the fleet vehicle scenario as employee consent is often not considered to be valid under the GDPR.

An alternative lawful basis for the processing of personal data in a CAV context may be to assert that the processing is necessary to fulfil the ‘legitimate interests’ of the controller. However, such legitimate interests must not override the rights and freedoms of the affected individuals. For example, it may be legitimate to use retinal scanning to unlock a vehicle, but not to display an advert for colour-matching eye makeup on the infotainment screen. In each case, a balanced case-by-case assessment of the facts and circumstances will be required.

For completeness it is also worth noting that a different set of lawful bases will need to be relied upon in the event that any special category data or data relating to (potential) criminal offences is collected.

In any event, controllers of personal data processed by CAVs must clearly inform data subjects prior to collection of how their personal data will be collected and used. Drivers are likely to be frustrated by repeated privacy notices each time they start the vehicle, so this process will need to be managed appropriately. The situation becomes even more complicated when vehicles collect personal data about passengers and third parties. Manufacturers are therefore faced with the challenge of developing a practical and user-friendly system for providing ‘fair processing’ information to ensure the CAVs adequately comply with the GDPR.

Other relevant data protection principles

Privacy by design is a key principle under the GDPR and requires controllers to have an eye to data protection as they develop products, services or otherwise. For manufacturers of CAVs and other stakeholders, this will require maintaining a balance between simplifying the user journey and the obligation to ensure that owners, drivers, passengers and third parties are aware of potential personal data collection and use.

The principle of data minimisation may also prove difficult in a world where significant amounts of personal data are being collected in relation to each and every journey. Controllers have an obligation to collect no more personal data than is necessary, and it is not always clear where the boundary of necessity lies. Controllers will also need to think carefully about limiting data collection to specific purposes, rather than collecting all possible data and then finding a use for it in future. Deletion requirements will also have an impact, given the need to delete personal data once it is no longer necessary and the tension that could arise with individuals exercising their rights to require the erasure of their personal data, especially in relation to vehicles which they do not own or control.

The potential volumes of personal data processing combined with potential profiling activities also raise the question of whether CAV stakeholders will need to appoint a data protection officer (DPO) in respect of their CAV-related activities.

Conclusion

It is clear that careful thought must be given to ensuring that data protection compliance complements and supports the adoption of CAVs, rather than becoming a barrier to them. CAV stakeholders who engage early with these requirements will be on the front foot, and can be confident in building processes which allow them to unlock the value of their potentially vast data source.

Miriam Everett
Miriam Everett
Consultant, London
+44 20 7466 2378
Edward du Boulay
Edward du Boulay
Senior Associate, London
+44 20 7466 2384
Hannah Brown
Hannah Brown
Associate, London
+44 20 7466 2677

DRIVING FORWARD WITH CONNECTED AND AUTONOMOUS VEHICLES

Connected and autonomous vehicles (CAVs) will have a dramatic impact on the way we live and work. The technology is advancing rapidly and it no longer seems to be a question of ‘if’ but ‘when’.

The introduction of CAVs has the potential to bring significant societal benefits, none less than the substantial increase in safety if implemented right. However with this change we will also see the transformation of a range of sectors as they adapt their offering to participate in the exciting new CAV world.

The possible applications of this technology straddle a variety of different sectors and will change not only the way people travel but the way that we live. To support deployment and optimise the benefits from adoption of these technologies, there is a need for regulatory and operational frameworks to be in place.

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