A big part of the EC’s five year mandate will be defined by shaping Europe’s digital future – an objective that it will pursue by various means such as policies for AI, the reshaping of competition rules, and a data strategy. These are in turn linked to the Green Deal and the Industrial Strategy, which the EC has also announced recently. The EC’s plan is far-reaching and ambitious, with a very broad range of legislative initiatives to be launched between 2020 and 2021. In particular, the data strategy will play a key role in boosting the availability of data for European companies, as well as improving their ability to use it. The success of this vision will determine whether Europe can become less dependent on foreign big tech, and create the conditions for its own businesses to finally compete on a global scale – something Europe has so far failed to successfully do. The general approach to create a European single market for data is likely to be the best way to achieve this, so that European companies do not have to contest markets already dominated by existing companies from the US and China. However, with all the proposals the EC is committing to table, the details will be of paramount importance, and legislators will have to try and avoid lengthy negotiations which can often lead to watered-down compromises.
Connecting the dots between digital, green, and industry
The European Commission’s digital strategy aims to solve a long-standing problem facing the European economy in the last two decades: that of being a digital follower, rather than a digital leader, despite all the potential of knowledge, technology, and industrial development of the continent. The new European Commission, which started its mandate in December 2019, is using its first few months to announce the legislation it intends to propose in the years to come. The digital strategy of February 2020 is one of the most important strands of the EC’s plan of activity alongside the Green Deal of December 2019, and the more recent industrial strategy of March 2020. The three strategies are strongly interdependent, since digital development is seen as a strong enabler of a greener economy, and on the other hand it is facilitated by a strong industrial policy, whereby the potential of 5G is fulfilled through full and effective use of industrial data.
The EC is convinced that, for all this to happen, it needs to set the stage for a radical rethinking of the European digital economy, whereby firms have easier access to data and are less dependent on US big tech. As Commissioner Thierry Breton repeatedly said, the EU now needs to win the “battle for industrial data” that is about to start, whilst not compromising on the high regulatory standards it has set, particularly with the GDPR. Hence the quest for Europe’s “digital sovereignty” – a recurring expression in the EC’s strategy – through which Europe can look to grow its own digital champions with its own, unique approach. The strategy also responds to a need recently highlighted by the telecoms industry – to make sure an appropriate industrial policy supports the development of 5G, as noted by Deutsche Telekom’s CEO at the FT-ETNO summit in December 2019.
The “European way” to data spaces
In its Communication of the strategy for data, the EC noted that at present there is little incentive for data-driven businesses to emerge, because a small number of big tech firms hold over a large part of the world’s data. In the US, the organisation of the data space is left to the private sector, with considerable concentration effects. In China, a combination of government surveillance and strong control of big tech companies over massive amounts of data is emerging, without sufficient safeguards for individuals. The EC’s vision aims to find a “European way” whereby the flow and wide use of data is ensured, while preserving privacy, security, safety and ethical standards. The Commission sees an opportunity both for business and the public sector, as data – unlike most economic resources – can be replicated at close to zero cost and its use is not mutually exclusive, since more than one person can use the same data at the same time. The objective is to create an attractive policy environment so that, by 2030, the EU’s share of the data economy – i.e. data stored, processed and put to valuable use in Europe – at least corresponds to its economic weight. The EC wants to achieve all this by creating a single European data space, i.e. a single market for data, open to data from across the world, where personal as well as non-personal data are secure but also easily accessible, including an “infinite amount of high-quality industrial data”. Together with legislation and governance to ensure availability of data, the EC aims to stimulate investment in standards, tools and infrastructures as well as competences for handling data. This favourable context, promoting incentives and choice, should lead to more data being stored and processed in the EU, and give businesses the possibility to build on the scale of the single market.
The question is how would data spaces work in practice. The EC aims to facilitate investment in technologies and infrastructures that should support the creation of data pools, either centralised or distributed. The organisations contributing data would get a return in the form of increased access to data of other contributors, analytical results from the data pool, services such as predictive maintenance services, or licence fees. The EC recognises that each domain has its own specific characteristics, and not all sectors are moving at the same speed. Hence the need for the development of sectoral data spaces in strategic areas such as manufacturing, agriculture, health, and mobility. The EC will aim to realise its vision for a genuine single market for data through policy measures and funding. The strategy relies on four pillars:
A cross-sectoral governance framework for data access and use;
Enablers: Investments in data and strengthening infrastructures for hosting, processing and using data, interoperability;
Competences: empowering individuals, and investing in skills and in SMEs; and
Common European data spaces in strategic sectors and domains of public interest.
The key actions to support the strategy
A number of actions stem from the four key pillars. The first involves proposing a legislative framework for the governance of common European data spaces by Q4 2020; an implementing act on “high-value data-sets” by Q1 2021; proposing a Data Act during 2021; and an analysis of the importance of data in the digital economy and a review of the existing policy framework in the context of the Digital Services Act package by Q4 2020.
With regard to the second, the EC will invest in a project on European data spaces, encompassing data sharing architectures (including standards for data sharing, best practices, tools) and governance mechanisms, as well as the European federation of energy-efficient and trustworthy cloud infrastructures and related services. This should facilitate combined investments of €4–6bn, of which the Commission could aim to invest up to €2bn. In Q3 2020, the EC will look to sign Memoranda of Understanding with member states on a ‘cloud federation’, and by 2022, it will look to launch a European cloud services marketplace, integrating the full stack of cloud service offering, and to create a self-regulatory ‘cloud rulebook’.
For the third, the EC is considering strengthening the right to data portability enshrined in the GDPR, thereby giving individuals more control over who can access and use machine-generated data. Rules for providers of personal data apps or new data intermediaries such as providers of personal data spaces could be considered, guaranteeing their role as a neutral broker. These issues could be further explored in the context of the Data Act proposal which is expected in 2021. The Data Act will also be the basis on which data sharing practices, and the usage rights for co-generated industrial data, will be regulated. The Digital Europe programme will also support the development and roll-out of ‘personal data spaces’. Investments in skills and digital literacy will aim to halve the current gap of 1m “digital specialists” by 2025, and to increase the proportion of the EU population with basic digital skills, from the current 57% to 65% by 2025. Under the same pillar, the EC foresees initiatives to build capacity for SMEs and startups, for which a dedicated SME strategy was announced on 10 March 2020, with a view to ease the regulatory burden on SMEs and support them through innovation hubs, access to financing, and improvement of skills.
Finally under the fourth pillar, the EC complements the horizontal approach of the other three pillars with the development of data spaces in strategic economic sectors and domains of public interest. These sectors are where the EC believes the use of data will have systemic impact on the entire ecosystem, but also on citizens. This should lead to the availability of large pools of data in these sectors and domains. While not having a one-size-fits-all approach, common governance concepts and models can be replicated in the different sectors. The horizontal framework will, where appropriate, be complemented by sectoral legislation for data access and use, and mechanisms for ensuring interoperability. The EC has identified nine sectors – the four areas mentioned above as strategic, plus: Green Deal, financial, energy, public administration, and skills.
The approach to international data flows
While the EC’s strategy has the concept of ‘digital sovereignty’ at its heart, it will aim to build an open approach towards international data flows with the rest of the world. The Commission believes the EU has a strong interest in leading and supporting international cooperation with regard to data, shaping global standards and creating a favourable environment for economic and technological development. At the same time, it will work at the international level to remove barriers to data flows currently facing European companies operating in third countries. To this end, the Commission will create a European analytical framework for measuring data flows by Q4 2021. This should be a durable framework that provides the tools to conduct a continuous analysis of data flows and the economic development of the EU’s data processing sector. It will serve to better understand patterns of data flows and centres of gravity, both within the EU and between the EU and the rest of the world, and become a basis for adequate policy responses.
In parallel, the EU will also actively promote its standards and with its partners around the world. Here, the EC makes explicit reference to the example of the GDPR, which became a model for rules adopted in other countries. It pledges to work at the international level to fight abuses such as the disproportionate access of governments to data, for example access to personal data that is not in line with the EU’s data protection rules.
