As we approach the mid-point of this decade, the European Union faces critical decisions that will shape its digital future. The European University Institute recently published a comprehensive report titled „Charting the Digital and Technological Future of Europe: What Priorities for the European Commission in 2024-2029?”[1] edited by Klaudia Majcher, which provides valuable insights into the challenges and opportunities ahead. This report comes at a pivotal moment as the EU consolidates its position as a leading regulatory force in digital governance while simultaneously striving to foster innovation and competitiveness.
The past five years have witnessed unprecedented regulatory activity in the digital sphere, with landmark legislation such as the Digital Markets Act (DMA)[2], Digital Services Act (DSA)[3], AI Act[4], Data Governance Act[5], and Data Act[6] forming what is now referred to as the EU’s digital acquis. As the new European Commission takes office, it faces the formidable task of implementing this complex regulatory framework while addressing emerging challenges in an increasingly contested digital landscape.
Balancing Regulation and Innovation in a Global Context
The EU’s approach to digital regulation has often been characterized by what scholars term the „Brussels effect” – the EU’s ability to export its regulatory standards globally[7]. However, the recent Draghi Report highlights concerns about what might be called the „Draghi effect” – the risk that excessive regulation could hinder the innovative capacity of European industries[8]. The report suggests that the EU’s latest attempt to govern digital developments appears to vacillate between cautioning against impeding EU industries’ ability to innovate and the belief that it will be simple to impose its viewpoint globally.
This tension is particularly evident in the implementation phase of major digital regulations. The Commission now faces the challenge of enforcing the existing rules while avoiding unintended consequences that might stifle innovation. As the EUI report calls for a halt on digital legislation; instead, the EU should focus on upholding current laws and addressing their unfavorable effects.
Another critical dimension is the need to conceptualize digital sovereignty through what the report describes as a „vertical stack” approach. Rather than addressing telecom infrastructure, semiconductors, cloud computing, and AI in isolation, the EU must develop a holistic understanding of their interdependencies. This approach aligns with recommendations in the Draghi Report[9], which emphasizes the importance of strengthening areas in the value chain where Europe already has a presence.
Competition and Innovation: Recalibrating the EU Approach
The implementation of the Digital Markets Act represents a landmark shift in the EU’s approach to regulating digital markets. The Commission has already designated several companies as digital gatekeepers (including Alphabet, Amazon, Apple, ByteDance, Meta, Microsoft, and Booking) and launched non-compliance investigations against Meta, Google, and Apple.
However, effective enforcement requires more than just regulatory action. The report recommends that the Commission should establish benchmarks and indicators immediately to evaluate its effect on contestability and fairness, have regulatory discussions with gatekeepers, heavily include third parties in its investigations, and strengthen collaboration with national competition authorities.
Looking beyond the DMA, the study highlights the urgency of addressing competition concerns in AI markets before concentration issues emerge. Unlike previous technological revolutions, we are entering the AI era with adjacent digital markets already highly concentrated. The challenge for policymakers is to act quickly while finding the right balance – to ensure a level playing field, advance competition and enable AI to reach its transformative potential.
The findings also challenge conventional wisdom about competition policy, suggesting that the EU should revise its merger guidelines to introduce an effective ‘innovation defence’ that would allow for business consolidation when it promotes innovation. This perspective aligns with the Draghi Report’s call for adapting competition policy to the profoundly changing world.
Implementing the AI Act: A Balancing Act
As of June 13, 2024, the AI Act was approved, marking the culmination of a legislative process that began with the Commission’s 2021 proposal. The report notes that the AI Act „is the first thorough legislation globally that governs the development and deployment of AI.
The implementation challenge is significant – the final document spans 144 pages, combining political considerations, legal principles, and technical prescriptions. According to the analysis, the illusive pervasiveness of AI, its distributed development, its deceitful and unpredictable dynamics, as well as its worldwide development and user base, necessitate that interpretation and implementation be appropriate.
A key priority will be ensuring that the AI Act both protects fundamental rights and allows for beneficial innovation. This requires addressing the „elusive” nature of AI (determining what exactly constitutes AI under the law), its „pervasive” reach across all domains of economic and social life, and the „distributed” development environment that spans from tech giants to individual initiatives.
Media and Democracy: Safeguarding the Digital Public Sphere
The transformation of the media ecosystem through platformization and generative AI poses significant challenges to media pluralism and the sustainability of independent journalism. The research emphasizes that utilizing the vast potential of digital innovation to expand access to and supply of independent and varied knowledge will be the primary issue going forward.
The report recommends that the Commission focus on reestablishing equitable business partnerships between digital platforms and content producers by ensuring effective enforcement of DMA data-sharing obligations and addressing information asymmetries in audience measurement. Additionally, it suggests that the EU should consider establishing an EU fund for independent journalism in order to increase its financial support for media plurality.
The analysis also argues for a more constitutional approach to platform regulation, warning that the current framework risks privatization of the understanding of fundamental principles and liberties. The findings suggest that public service media should be separated from just commercial factors and even ‘constitutionalized’, recognizing them as an essential and enduring component of a functioning democracy.
Data Governance: From Legislation to Implementation
The European Commission’s previous term saw the enactment of multiple data laws, including the Data Governance Act, the Data Act, and provisions within the DSA and DMA. The report observes that these laws work with data concepts that may deviate from the conventional emphasis on protecting „personal data”.
The key challenge now is implementation and coordination. The research recommends that the Commission invest in its monitoring capabilities to keep track of how European data law is being implemented locally. It suggests cooperation with European universities to develop infrastructures for continuous, exacting, and empirically and theoretically supported assessments.
The study also emphasizes the importance of improving digital literacy, noting that only those who possess the requisite digital abilities will be able to fully exercise their data protection rights. The report further recommends strengthening data protection authorities by providing them with the prerequisites for them to do their duties and use their authority on their own.
Conclusion: From Legislation to Implementation
As the European Commission embarks on its new mandate, the priority for digital policy shifts from legislation to implementation. The impressive regulatory framework established over the past five years now requires careful coordination, monitoring, and enforcement. The Commission must balance protecting citizens’ rights and the EU’s values with fostering innovation and competitiveness.
The EU stands at a critical juncture in its digital journey. Having established itself as a regulatory leader, it must now demonstrate that its approach can deliver on its promise of a human-centric, rights-respecting digital transformation that simultaneously enables European businesses to thrive. This balancing act will define the success of EU digital policy for years to come.
As the report concludes in its preface: „Designing good digital policies in a complex world requires accommodating, challenging, and discussing diverse views and perspectives. A collaborative approach grounded in thoughtful and inclusive dialogue is essential.”[1]
[1] https://op.europa.eu/en/publication-detail/-/publication/8f1afed6-be8a-11ef-91ed-01aa75ed71a1/language-en
[2] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.L_.2022.265.01.0001.01.ENG&toc=OJ%3AL%3A2022%3A265%3ATOC
[3] https://eur-lex.europa.eu/eli/reg/2022/2065/oj/eng
[4] https://eur-lex.europa.eu/eli/reg/2024/1689/oj/eng
[5] https://eur-lex.europa.eu/eli/reg/2022/868/oj/eng
[6] https://eur-lex.europa.eu/eli/reg/2023/2854/oj/eng
[7] https://geopolitique.eu/en/articles/the-european-union-in-a-globalised-world-the-brussels-effect/
[8] https://ecfr.eu/article/the-draghi-effect-italys-new-old-national-interest/
[9] https://commission.europa.eu/document/download/97e481fd-2dc3-412d-be4c-f152a8232961_en
