What’s Next for the EU’s Digital Agenda?
By Lukasz Kazmierczak
When Joe Biden entered the Oval Office, European decision-makers seemed relieved. Thanks to his commitment to the transatlantic alliance, over the past three years we have observed relative harmony between the world’s largest democratic powerhouses, namely the United States and the European Union. However, with the European Parliament and US elections looming in 2024, this partnership could be profoundly reshaped over the coming year, especially with regard to the regulation of digital affairs. Indeed, whilst the outcome in the US will unlikely break Washington’s long-lasting dysfunction regarding this matter, the reshuffling of the EU’s top jobs following its parliamentary election could mark the advent of an even more assertive stance towards America’s tech giants.
Clashing Approaches Towards Digital Governance
Diverging approaches to cyberspace regulation emerged some time ago between Washington, Beijing and Brussels. As Wendy Hall and Kieron O’Hara have described, fears of stifling innovation and losing competitive advantage over rival superpowers have often led American policymakers to forgo policy initiatives targeting market failures related to the rise of Big Tech or adopting comprehensive data protection regulation at the federal level. China’s model adopts a more paternalistic approach that focuses primarily on preventing social unrest by curbing citizens’ online freedoms and imposing a high-degree of censorship. In contrast to both of these approaches, however, stands the European Union with its emphasis on securing online liberties and respect for the rules of market competition through adopting comprehensive regulations.
With such competing approaches between what Columbia professor Anu Bradford describes as ‘digital empires’, the question is where are we heading with global digital regulation. For as Bradford argues that competition will only increase between the world’s leading powers to externalise their digital standards in the coming years, the path ahead remains blurry at best.
EU — A Global Regulatory Hegemon?
In recent years, EU policymakers have sought to fill the legal void in the digital world through a range of legislation, such as the Artificial Intelligence Act and the Digital Services-Digital Markets Act (DSA-DMA) package. Perhaps the most well-known, however, is the General Data Protection Regulation (GDPR). Indeed, as every EU citizen and enterprise has become exposed to GDPR’s impacts since its adoption in 2016, this legislation has also become a key reference point for policymakers approaching tech regulation more broadly.
Whilst it was only set to have agency within the EU, GDPR’s magnitude led it to quickly become the global ‘gold standard’ of data protection. In accordance with the ‘Brussels Effect’ — a term coined by Anu Bradford — the rules laid out by the EU thereafter spread beyond the bloc’s borders; for it often made more sense to international private actors, such as Microsoft, to unilaterally impose the most stringent EU standards across all its operations due to technical non-divisibility. Looking ahead, whilst this ‘effect’ initially constituted more of a by-product of the EU’s internal regulatory efforts, it now seems that European decision-makers purposefully strive to utilise such leverage.
Since 2014, the EU’s entrepreneurship in digital affairs has been personified by its Commissioner for Competition, Margrethe Vestager, who became famous for her antitrust actions targeting big American companies such as Apple and Google. Five years later, in 2019, she renewed her mandate in the Ursula von der Leyen’s Commission, where she was tasked with delivering the new Commission President’s digital ambitions. In this area, she was joined by Thierry Breton, Emmanuel Macron’s close ally who had previously served as CEO of French tech companies such as Atos and France Télécom.
It is an open secret in Brussels that the tandem presented diverging views from the outset on how to best deliver the EU’s digital ambitions. Indeed, during the current Commission’s mandate, Vestager’s staunch adherence to neoliberalism and free trade has been counterweighed by Breton’s neo-mercantilist approach described as ‘Europe first’. As we shall see, the latter stance seems to have gained momentum in Brussels.
In my recent dissertation entitled “Shaping Digital Legislation Through Ideation”, I found that within the plenary debates on the DSA-DMA package held between December 2021 and July 2022, politicians from the three major groups — European People’s Party (EPP), Socialists & Democrats (S&D) and Renew Europe — devoted substantial effort to argue for the EU’s role as a digital standard-setter. It is interesting to understand the arguments behind such positioning.
For most lawmakers from the liberal Renew faction, and Commissioner Vestager who is affiliated with the group, the EU should adopt bold standards to nudge other like-minded entities (especially the US) to follow suit. Interestingly, Commissioner Breton’s stance was more assertive, as demonstrated by his proclamation during the December 2021 parliamentary debate that:
“With the DMA and the DSA (…) Europe is taking the lead in defining global standards for our digital space. Of course, we all hear certain criticisms coming from across the Atlantic on our approach, (…) Our legislation (…) is made to preserve innovation and the proper functioning of our internal market.”
His stance reasoned with the arguments presented by the center-right EPP, whose members were relatively hawkish regarding excluding European companies from the scope of the DMA. For instance, EPP’s Andreas Schwab, the European Parliament’s chief negotiator on the Digital Markets Act, openly admitted that the law should apply only to the five biggest companies (none of which were European), triggering discontent among the US officials. Elsewhere, Schwab urged the US to adopt similar legislation. Hence, for some EU politicians the argument for setting worldwide digital standards may indeed be tied to a more subtle agenda of ensuring a favorable business environment for European companies.
For left-wing lawmakers, the desire to act as a digital standard-setter stems more from the idea of ‘Social Europe’ — i.e. building a more social and inclusive community that exports core values such as social justice and human rights protection. On numerous occasions, S&D’s lawmakers argued that protecting citizens worldwide from unregulated algorithms and illegal online content is necessary. Building on that, in July 2022 Christel Schaldemose, member of the S&D and the rapporteur on the DSA, asserted her belief that:
“The DSA can become the new gold standard for the tech area, not just in Europe, but throughout the world. Big tech nations like the US and China are watching closely what we now agree on. Just like they did when we did GDPR.”
As we can see, those on the left of the Parliament have their own ideas for taking advantage of the ‘Brussels effect’.
The End of an Era
The final year of this Parliament’s mandate will be marked by one notable absence. Since the beginning of September, Margrethe Vestager has been on leave from her Commission duties as she is seeking the presidency of the European Investment Bank. Her departure from the Commission gives an indication of what to expect. It shows that the neoliberal dogma that prevailed in Brussels over recent years may indeed be forced to make space for other neo-mercantilist or socially-oriented visions, championed by the EPP and S&D respectively.
Symbolically, her leave was announced only a day before the Commission designated the six ‘gatekeepers’ that must follow the strict competition regime created by the DMA. This, in turn, secured Thierry Breton’s dominance over the EU’s digital agenda, who intends to remain in the Commission for the next five years. Reportedly, he is even eyeing its presidency.
Taking a step back, it is clear that the EU’s more assertive legislative agenda falls into the Commission’s ongoing attempt to make itself a more autonomous ‘geopolitical body’; an effort which has evolved in response to numerous developments ranging from Chinese mercantilism and Trump’s trade wars through to the pandemic and Putin’s invasion of Ukraine. Speaking earlier this month in her State of the Union, Ursula von der Leyen highlighted the importance of digital transition over the coming year as a core component of this search for greater geopolitical autonomy; reiterating the need to develop global standards for AI without mentioning regulatory cooperation with other countries.
Whilst it’s not yet clear whether she will seek another term in the Commission, it nonetheless seems that such an approach will be pursued during the next term. This stands in stark contrast with Washington, where rampant polarization prevents policymakers from seriously engaging with digital affairs regulation: a reality captured by Tom Wheeler, former Chairman of the Federal Communication Commission, as he writes:
“The reality remains that while the digital economy moves at internet speed, policymakers in the US have not kept pace. The result created the opportunity for the EU to speed ahead. Like in the marketplace, there is a first-mover advantage in policy matters as well. Advantage in setting digital policy now resides in Europe.”
It seems that a European Parliament with a more right-wing composition — as the polls predict — may be even more keen to benefit from this advantage.
The Future of the Transatlantic Digital Partnership
The evolving landscape of EU-US digital governance presents a complex and dynamic picture. Over the past three years, these democratic powerhouses have navigated their partnership with limited success, and the EU has asserted itself as a global regulatory leader in digital affairs. Arguably, Vestager’s departure and a more right-wing European Parliament will aggravate this trend. In contrast, the United States constantly grapples with political polarization, hindering its ability to keep pace with the rapidly evolving digital landscape.
To prevent fragmentation of regulatory standards in the digital domain, US decision makers should begin serious policy engagement with their European counterparts rather than perceiving each regulation as a threat to American companies. To achieve that, actors from both sides of the Atlantic should create a comprehensive Western Digital Alliance, as argued by Wheeler, that will foster cooperation between like-minded democratic countries. Without some mechanism for such collaboration, the EU might continue its regulatory expansion without looking back. To paraphrase Matthijs and Meunier, its “Kantian idealism” might be replaced with “Hobbesian realism”. Such a shift is unlikely to have a positive impact on the Western community.
Lukasz Kazmierczak has been a member of European Horizons since 2020. He joined the UCL chapter, where he read Politics and International Relations. After obtaining a Bachelor’s degree, he is pursuing a Master’s degree in European Affairs, specialising in digitisation and new technologies at Sciences Po Paris. His areas of interest include digital and climate policies, European integration, international trade and transatlantic partnership.
