February 20, 2020

New EU digital strategy: Towards an open, democratic and sustainable society

In a welcome last minute change the European Commission renamed its digital strategy for the next five years from "A Europe fit for the digital age" to "Shaping Europe's digital future". This new name does a much better job at summarising what the Commission has presented yesterday: an ambitious strategy that tries to position the European Union as being in charge of defining the rules of the digital environment.

In doing so, it tries to chart a European way that puts digital technology at the service of society instead of at the service of maximising profit (US) or enabling social control (China). While there are some doubts if the policies and measures announced as part of this strategy will be sufficient to create a digital space empowers society as a whole, the level of ambition and the general direction must be applauded.

The new strategy avoids direct references to the Digital Single Market strategy that guided the digital initiatives of the Juncker Commission. Still, the new strategy does not constitute a clear departure from the market centric approach that has so far characterised EU policy making in this area. All three pillars of the new strategy "Technology that works for people", "A fair and competitive digital economy" and "An open, democratic and sustainable society" still rely on facilitating markets and economic growth.

But taken together, these pillars significantly widen the narrow market centric focus of the previous strategy. This widening of the frame is rooted in two interlinked developments: On the one hand, a growing distrust of citizens towards the digital environment fuelled by the increase of misinformation and concerns around a lack of control of personal data and the absence of privacy. On the other hand, the fact that Europe's digital economy is perceived to be falling behind and becoming dependent on global competitors such as China and the US. Both developments understandably alarm the EU policy makers and the new strategy is supposed to counter these developments.

The communication on "Shaping Europe's digital future" focusses on the first of these problems. It proposes a wide range of measures that are aimed at strengthening trust in the digital environment and to reign in problematic behaviour of dominant online platforms. The question of Europe's global competitiveness in the digital space is addressed in a separate "European strategy for data" that attempts to create the condition for Europe to become a global leader in “the data-agile economy". In addition the Commission also published a White Paper on Artificial Intelligence. In the remainder of this post we are looking in more detail into the first two documents.

In regulation we trust

According to the Commission’s analyses, the key mechanism for building a digital environment that works for the people and for society is trust. The new strategy states that "Citizens no longer feel in control over what happens with their personal data and are increasingly overloaded by artificial solicitations of their attention". This is as far as the strategy comes to acknowledging that at the root of these problems are the abusive, surveillance driven advertising based business models of the dominant platforms.

While the strategy shies away from directly confronting the business models underpinning the surveillance economy (which could still be made part of some of the follow-up legislative interventions announced in the strategy) it contains plenty of other measures aimed at dominant online platforms. These include a number of widely expected high profile interventions like a Digital Services Act (requiring platforms to take on more responsibility), a review of the EU competition rules (to make sure that they reflect the specific challenge of digital markets) and the exploration of ex-ante competition rules for platforms with significant network effects (to limit their ability to act as gatekeepers).

In addition, the strategy also announces long overdue interventions like new tax rules for digital businesses (either in the OECD context or failing agreement there, on the EU level) and a much needed "initiative to improve labour conditions for platform workers".

As we are arguing in our Vision for a Shared Digital Europe, trying to contain the problematic aspects of how existing platforms function via regulation alone cannot be sufficient to build a more democratic, just and egalitarian digital society. Unfortunately the strategy paper does not follow our argument that there is a need to invest into public alternatives to the commercial platforms. Nevertheless, it includes a few openings for interventions in this direction: A "Media and Audiovisual Action Plan" and a "European Democracy and Action plan" (both announced for Q4 of 2020) leave openings to strengthen the role of public institutions such as public broadcasters, cultural heritage institutions and academic institutions in diversifying the online communications landscape.

Another element where the strategy is playing with the idea of alternative structures is the ambition to enable publicly managed online authentication mechanisms to give users of online services the ability to "control their online identity, when authentication is needed to access certain online services" and to ensure that consumers can "securely use the products and services they want without having to use unrelated platforms to do so and unnecessarily sharing personal data with them." What looks like a relatively minor intervention should be seen as a first step towards restoring users’ self-determination in the face of the out of control data gathering practices of dominant platforms.

Will data make Europe great again?

Maybe the biggest omission of the new strategy is that it lacks the courage to properly diagnose the situation that Europe finds itself in vis-a-vis the dominant technological paradigm of our times. At the start of the 2020s, Europe lacks a substantial stake in the two core elements of the current computing paradigm: the mobile devices that we use to access digital services and the hyper scale cloud infrastructures that power these services. This is especially worrisome as this configuration of the digital space will likely continue to exist for decades to come.

The Commission's strategy stays largely moot on how to mitigate Europe's reliance on the US and China for cloud services, mobile computing devices and most crucially the operating systems that power digital ecosystems. Instead it focuses on pursuing leadership in two other fields: connectivity and data. According to the strategy "connectivity is the most fundamental building block of the digital transformation. It is what enables data to flow". The strategy goes on to position data as the key driver of economic growth that it wants to enable by building "a European data space based on European rules and values." This new approach to data is outlined in more detail in the separate European Data Strategy.

This strategy, which primarily focuses on industrial and other types of non-personal data rests on three pillars: a new regulatory framework to unlock data, a European data infrastructure and so called "European Data Spaces". All of these are intended to unlock the potential of what the strategy calls the "data-agile economy”.

There are a number of reasons to be sceptical of this narrative of data as a cure-all for Europe's lack of competitiveness in the digital space: The idea to unleash the power of data by pooling it across sectors and between public and private entities runs contrary to existing competition and data protection policies. On a more fundamental level it seems highly questionable that collaboration based on sharing data is something that can be achieved via a top-down legislative approach.

Fundamentally there seems nothing wrong with positioning data as a resource that becomes more valuable when it is shared. This approach opens the doors for exploring new forms of collective ownership and new forms of sharing the economic rewards of collaborations based on data. Instinctively this approach seems most promising in economic sectors with clearly defined societal goals such as health care or sustainability. But most Importantly, it also raises questions in how far the intended sharing between users, the public sector and the private parties goes beyond exposing even more personal and public data to commercial exploitation by private sector entities.

Shaping Europe's digital future

All in all, the vision that the Commission lays out in the new digital strategy is a welcome improvement over the previous strategy. The ambition to actively shape the digital environment in order to contribute to a more open, democratic and sustainable Europe is a good departure point for the next five years of digital policy making in Europe. It is a positive sign that the Commission has realised that digital policy must attempt much more than just create a digital single market and it is now up to the Commission to show that it has the capacity to bring these ambitions into practice. For this to work it will be crucial to build new alliances with civil society and public sector organisations across Europe.