The European Commission has outlined an ambitious policy strategy for data and AI which it plans to ... [+]
The EU is coming for Google and Facebook. Not only has it been subjecting these two data-hungry corporations to anti-trust investigations, but it has today outlined plans that could ultimately create a tech giant or two of Europe's own. As outlined in two policy documents, it will change EU law in order to foster the commercial gathering, sharing and processing of data, as well as the development of AI technology. And as a result, more than one EU-based company may soon emerge to challenge the FAANG's dominance of the 21st Century data economy.
Published today, the European Commission's "European strategy for data" takes clear aim at the American tech titans. "Currently, a small number of Big Tech firms hold a large part of the world’s data," it reads. "This could reduce the incentives for data-driven businesses to emerge, grow and innovate in the EU today, but numerous opportunities lie ahead."
Accordingly, the EC plans to alter EU policy and regulations so as to create "a single European data space." It wants a "genuine single market for data," one that, by ensuring "data can flow within the EU," will favor EU data-based companies at the expense of (American) outsiders. Ultimately, the aim of all this is to make the EU and its big tech companies a significant player on the global data stage.
"The EU should create an attractive policy environment so that, by 2030, the EU’s share of the data economy–data stored, processed and put to valuable use in Europe–at least corresponds to its economic weight."
In particular, the EC is proposing a number of specific changes. Most notably, it wants to incentivise data-sharing and openness between EU-based companies, so that a lucky few corporations can accumulate the quantities of data that have transformed Google and Amazon into trillion-dollar companies. One way it will do this is by reconsidering EU competition law as it bears on anti-competitive data-sharing practices.
It writes, "The Commission will provide more guidance to stakeholders on the compliance of data sharing and pooling arrangements with EU competition law by means of an update of the Horizontal Co-operation Guidelines."
This could be very significant. In theory, it could allow a number of big EU companies to come together and agree to share data only between themselves, at the expense of their competitors. Hence, certain data-focused corporations could grow very large and powerful, creating the EU's equivalent of Google or Facebook.
Of course, Google, Facebook and other American firms will also benefit from any new proposal concerning data sharing, so long as they operate in the EU and abide by EU law. However, the new European data strategy document also aims to foster greater government-to-business data sharing, while also potentially reforming some of its state aid regulations to facilitate such sharing.
"In its ongoing review of a number of State Aid guidelines, the Commission will examine the relationship between public support to undertakings (e.g. for digital transformation) and the minimisation of competition distortions through data-sharing requirements for beneficiaries."
Potentially, this means that new EU data laws could permit EU member states to provide greater financial support to EU companies, thereby helping them to grow in preference to non-supported rivals. Again, the upshot of this could be to foster the creation of a serious rival to American tech firms.
Ultimately, the policy document outlines how the EC wants to overcome barriers to data sharing within the EU, how it wants to improve the EU's digital infrastructure, and how it wants to create interoperability standards. Taken together, such planks will facilitate the growth of a European data space within which certain EU-based companies may rise to greater prominence. This will be helped by the second document the EC published today, a white paper on AI. While not quite as significant as the data document, this second paper outlines proposals for accelerating EU development of and investment in artificial intelligence.
Such development will be necessary if the EU is to achieve its objectives for the data economy, given that AI is vital for data-crunching. And interestingly, the AI white paper reveals that the EC will investigate introducing exceptions for the use of personally identifying facial recognition and other biometric data, which is severely limited under current EU law.
Indeed, if the EU seriously wants to challenge the American tech industry's dominance of data, it may in the end have to relax some of its more scrupulous regulations. This is worrying for EU citizens, who may suffer at the expense of the EC's desire to outcompete Google, Amazon and Microsoft.
Still, the new data proposals are at least as worrying for these same American companies, who may find their monopolistic control of the data market seriously weakened in Europe. But for now, the EC will be consulting on its proposals, while any policies it eventually accepts will form part of a Data Act, which it plans to introduce in 2021.
