In the past few months, the COVID-19 pandemic has created economic uncertainty in the European Union, as well as highlighting the need to increase the resilience of supply chains and accelerate the digitalisation of European society. Based on these ongoing challenges, the 20th European Business Summit’s (EBS 2020) theme was “Rebooting the European economy – Towards a green, digital and more resilient Union”. Sustainability, economic resilience, and digitalisation were therefore the three key topics during high-level panels and discussions that brought together policymakers, industry experts, and academics.
Protection in the Digital Age
Digital policy issues were at the centre of the debates at EBS 2020. More specifically, the panel on Protection in the Digital Age focused on data governance in the EU, cooperation with third countries and the risk of excessive protectionism.
Salla Saastamoinen, Acting Director General in the Directorate-General for Justice and Consumers, represented the European Commission. During the panel, Saastamoinen reiterated the importance of creating data spaces which respect European values, including privacy, consumer protection and competition, and stressed the centrality of the EU’s citizens when it comes to formulating policies. Additionally, Saastamoinen stated that the Commission’s regulations are likely to be aligned with the World Trade Organisation’s, while technical talks with the US administrations have begun and will continue to take place. Finally, regarding Brexit, Saastamoinen underlined that the assessment of the UK data system is still taking place and that there might be delays due to the current situation. While the UK applied GDPR as a member of the EU, it is still too early to state whether their post-Brexit data system will be adequate or inadequate.
Offering a perspective from the private sector, Tim Hwang, Founder and CEO of FiscalNote, highlighted that new regulations, while needed, inevitably correspond to changes in investment strategies and, ultimately, development costs. Although this is sustainable for large corporations, it may damage smaller enterprises. Other panellists, including Paul Jorda, IAPP’s European Managing Director, and Cecilia Bonefeld Dahl, Director General of DigitalEurope, further expressed their concern over the difficulties that SMEs encounter when complying with regulations such as GDPR, and warned against becoming excessively defensive with European data and tech.
Overall, the panelists agreed on the importance of data sharing and portability, and its potential to generate growth. While the EU is on the right path, protection in the digital age cannot involve Europe alone. On the contrary, data protection should be a global concern that leads to the creation of a code of conduct that improves trust worldwide. The panellists also highlighted that one of the most critical challenges the Commission faces is fragmentation within the single market. To address this issue, strong enforcement from Member States is crucial. It remains important, however, to avoid overregulation.
Regulating Digital Platforms
Following this panel, discussion focused on two legislative proposals that the European Commission is expected to unveil in early December: (i) the Digital Services Act (DSA), which will address issues such as online advertising, content moderation, and algorithms, and (ii) the Digital Market Act (DMA), which will introduce ‘ex ante rules’ for online gatekeepers, as well as new investigatory instruments in the field of digital market competition. Both proposals are expected for 9 December 2020. The conversation focused on the policy rationales and goals underpinning the DSA and DMA, including views from both regulators and the regulated sector. The key policy challenge emerging from the panel is reconciling Big Tech regulation with the promotion of a competitive environment favouring R&D and smaller players, such as start-ups.
Věra Jourová, Commission Vice President for Values and Transparency, began the discussion by addressing the issue of digital regulation from the position of promoting a democratic society. Jourová highlighted how the DSA will enhance transparency, especially through content moderation, contributing to a European ‘digital soul’ that mirrors EU values. The Vice President also stressed how similar achievements will not solely depend on regulation, but will require significant investment; for instance, promoting media literacy across the EU. In the interest of democratic values and transparency, the Commission will also present its European Democracy Action Plan, defending freedom of elections, fighting disinformation, and protecting independent journalism. The Plan will be presented on 2 December 2020.
As a representative of the regulated sector, Christian Borggreen, Vice President & Head of Office of CCIA Europe, stressed how digital platforms are ready to play their part and look forward to collaborating with the Commission in this endeavour. ‘We want to be part of the solution’ added Borggreen. From the regulator’s side, Jourová emphasised that one of the overarching strategic goals of the DSA and DMA is to bridge the EU’s technological gap with global players like the US and China. To that end, Jourová added, the EU should avoid overregulation, support innovation (particularly start-ups), and invest in resources to keep people and their expertise in Europe. Mike Sax, Founder and Chairperson of The App Association, also observed that upcoming regulations should allow enough flexibility for algorithms to be updated and improved, in order to avoid their manipulation (for example, by search engines).
The discussion progressed to focus more closely on the DMA and how best to address the issue of gatekeeping platforms. MEP Stéphanie Yon-Courtin forwarded that emphasis should be placed on the role played by the DMA in restoring competition and tackling market failures, rather than on regulating platforms. Yon-Courtin added that DG Competition would be the most competent EU authority for taking up enforcement responsibilities, but will require additional resources and coordination with other EU and national authorities in order to fill digital expertise gaps. Sébastien Soriano, President of Arcep, the French telecom regulator, stressed that the fundamental problem with the internet is its structural centralisation by large platforms. In that regard, continued Soriano, the key challenge for a successful and effective DMA is not about shifting the power from platforms to regulators, but promoting decentralised innovation. Soriano concluded that a process of blacklisting will fail to redistribute power.
The acceleration of digitalisation witnessed during the pandemic suggests that the digital economy will play a key role in the post-COVID economic recovery. The European Union seems keen to embrace the growth opportunities offered by digitalisation and intends to allocate 20% of Recovery and Resilience Facility funds to the digital transition. At the same time, the EU is also working towards the formulation of digital policies that, by placing European values at the centre and imposing transparency requirements, will promote a responsible digital transformation. Overall, the upcoming months will see a number of EU policy and regulatory initiatives emerge to strike a balance between the need for a digital economic recovery and a set of standards in line with Europe’s core values.
Authors:
Giulia Abrate & Leopoldo Biffi
Access Partnership
