The commission‘s digital strategy: More competition, less emissions

European Commission Vice-President in charge digital, Margrethe Vestager, and European Commissioner for Internal Market and Services, Thierry Breton (R) give a press conference on a digital new strategy in Brussels on 19 February 2020. [EPA-EFE/OLIVIER HOSLET]

In its digital strategy published on Wednesday (19 February), the European Commission committed itself to fostering ‘Technology that works for the people’ by increasing the digital prowess of European citizens and companies, doubling down on curbing the market power of tech giants and tapping into ICT’s potential for sustainability.

The document states that “businesses need a framework that allows them to start up, scale up, pool and use data, to innovate and compete or cooperate on fair terms”.

To achieve this, the Commission plans to increase the competitiveness of European companies by improving their access to high-quality internet, data and digital skills on the one hand, and ironing out market-distorting advantages of competitors on the other.

Sharpening old tools

To safeguard fair competition, the Commission is ready to “use all instruments at its disposal” and vows to ensure that any player wanting to do business in the EU “accepts and respects our rules”.

These rules must be the same offline and online, “from competition and single market rules, consumer protection, to intellectual property, taxation and workers’ rights”. European competition rules will undergo a “fitness check” for their applicability to the digital economy, including a review of state aid guidelines.

The strategy stresses that this will not only be done by writing new rules, but by enforcing old ones more effectively. To in turn support European companies in foreign markets, the Commission promises to address “unjustified restrictions” like data localisation requirements in third countries.

Hunting giants

With commissioner Margrethe Vestager at the helm, it is no surprise that the document takes aim at big tech companies with market power. Calling them “large private gatekeepers to markets, customers and information”, the document emphasises that their “systemic role” must not endanger fair competition.

Where competition policy is not enough to address such systemic problems of the platform economy, the Commission would enact additional regulations, such as ex-ante rules, to “ensure contestability, fairness and innovation and the possibility of market entry” as well as protect public interests “beyond competition or economic considerations”.

They would be proposed as part of the Digital Service Act Package, scheduled towards the end of the year, accompanied by a sector inquiry to identify obstacles to fair competition in the digital economy.

The Digital Services Act Package will also increase the responsibility of online platforms and information providers as well as strengthen the EU’s oversight capabilities over their content policies.

On taxation of the digital realm, the strategy points out that profits of big digital players are often not taxed where they are generated, which further distorts competition. A communication on Business Taxation for the 21st century is announced without a specific time frame, which will take into account the progress of current negotiations at the OECD.

Getting people up to speed

To help European companies reap the benefits of digitalisation, the Commission outlines several supportive measures. Until 2021, investments into Europe’s Gigabit connectivity will be sped up by a revision of regulations on broadband, 5G and 6G as well as radio spectrum policy.

This is supposed to help achieve the EU’s connectivity goals: Gigabit connections for businesses (and public institutions like schools and hospitals) and at least 100 Mbps for households.

The EU executives’ plans for digital skills will be strengthened through a reinforced Digital Education Action Plan, to be published this half of the year. To bolster cybersecurity, a European cybersecurity strategy has also been announced, albeit, again, without a timeline.

That will feature a newly-created joint Cybersecurity unit and a review of regulations on the Security of Network and Information Systems (NIS).

ICT for Future

Digital solutions will play a crucial role in the EU’s ambitions to become climate neutral by 2050, states the strategy.

As the ICT sector accounts for 2% of global CO2 emissions (as much as air traffic) according to the document’s data, with a potential increase to 14% by 2040, the Commission aims to make data centres and ICT infrastructure climate-neutral by 2030.

This will be complemented by updated regulations on device longevity and repairability, e.g. for smartphones.

For a cross-sectoral footprint decrease, the strategy outlines plans to use big data and AI for increasing efficiency and thus decreasing global emissions by a sevenfold. Tracking energy consumption could help predict when and where power is (and is not) needed.

Through precision farming, agricultural producers could, the Commission says, decrease their use of pesticides. Smart mobility could increase the efficiency of transport.

“This is a good start, but does not exploit the technical potential”, German MEP Alexandra Geese said. While she approves of making the ITC-sector climate neutral, she added that “training algorithms with huge amounts of data consumes a great deal of energy” in the short-term, even if the goal of the algorithm is to have long-term increases in efficiency.

[Edited by Benjamin Fox]

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