Past Event

Challenges and opportunities for the EU digital single market

At this event, we looked into the progress made towards achieving the main priorities for strengthening the digital single market, the opportunities and the challenges at EU level.

Date: April 23, 2018, 8:30 am Topic: Innovation & Competition Policy

video and audio recordings

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SUMMARY

Summary presentation by J. Scott Marcus

In the first session, the panellists discussed how to establish a fair and competitive Digital Single Market, in particular a fair and competitive platform economy. Since the crucial factors for success for digital platforms are trust and big data, the trade-off between both determine the efficiency of the entire industry. This trade-off is embodied in privacy, and unfortunately empirically there is no clear-cut answer to how much privacy is needed for people’s welfare. The panellists also discussed the role of competition policy and regulation as complementary tools, one as a credible deterrent and the other as a specific way to tailor policy to social objectives.

For competition policy, several features of the platform economy were highlighted that make the situation particular, notably the winner-take-all markets, the first-mover advantage, the network effect, the cross-markets leverage that scale brings and other bundling. Due to the fragmentation of the EU market, there are cases where national players effectively compete with global ones. All these aspects make the response all the more difficult and while dominant position leads to increased vigilance it is not always beneficial to break dominant players.

The panel also highlighted how self-regulation and purely top-down regulations were both ill-suited for such a fast-moving topic, and instead recommended the use of co-regulation, whereby regulators and stakeholder find pragmatic solutions through continued consultations. Regarding DSM legislative process, some criticized how politicized it had become, shifting away from long-term added-value and evidence-based policies, while others praised the legislators’ openness to input from stakeholders.

In the second session, panellists highlighted some of the achievements in the current DSM proposals and also their hopes for the future. The abolishment of roaming charges, geoblocking and portability were highlighted as big achievements, as well as the strong focus on consumers. However, there was a perception from industry that the very political incumbent Commission want to over-regulate the tech sector. The fragmentation of regulation on digital issues across member states is also a big constraint on the growth of the different technology sectors and, in the case of telecommunications, has contributed to decreased global market share. From the consumers’ perspective, a key issue is privacy: while the recent progress are good, there should not be any slowdown in terms of implementation. With regards to e-privacy in particular, there were hopes that the new regulations would be able to correct the mistakes of the past.

MEP Eva Maydell also emphasized that legislative progress was perhaps too slow and sometimes policy-makers themselves did not know enough about the technologies at stake to make proper decisions. She also highlighted the ambitions needed for the future, such as free flow of data, coherent cybersecurity, an actionable and effective AI strategy, and a concrete move on digital training – which will eventually require a total transformation of education systems. The Commission’s view on these issues was also about harmonization across the different member states, in order to allow the scale for competitiveness.

In the third session, panellists discussed the evolution of cybersecurity policy in EU. Overall, they mentioned the significant progress being made in these matters, but discussed ways to go further in order to meet the growing need for cybersecurity. They highlighted the important role the private sector could play. Indeed, with significant capabilities, the industry should collaborate with public authorities for ensuring a collective and coherent response to threats. Besides, the nature of cyberthreats has evolved and they now affect companies and public infrastructure rather than individuals. As a key aspect of national security, panellists highlighted the importance of achieving a common baseline in the Union, through regulations that aim at harmonizing member states’ practices. This can begin by pooling knowledge and expertise, and implement a certification system.

This discussion led to highlighting the crucial role of ENISA, the European Union Agency for Network and Information Security, in providing assistance to member states and coordination with stakeholders. The panel then discussed how to fulfil the goals of a more resilient EU in terms of cybersecurity. The role of skills and awareness was discussed and considered crucial and, while many member states have taken the initiative, there is a need to coordinate these activities. Finally, the panellists discussed some other developments in the field, such as a Digital Geneva Convention, which will need negotiations between large technology firms and nation states and the role of the European External Action Service, given the strong external cyber-capabilities of some countries.

In the fourth session, the key emphasis was on the social and economic implications of the digital transformation. The discussion focused on digital skills training, the rise of AI-empowered economy and EU’s lagging innovation potential

On digital skills training, there was a strong agreement that more action was necessary. If one is to make sure that technology is upskilling, one would need to rethink how workforce training is currently done. A key difficulty is that companies have little incentives to invest in workers knowledge, given the great uncertainty about their own business model, and that the standard employment contract is becoming obsolete. Furthermore, it will be very challenging to retrain low-skill and medium-skill workers, who might have become low-skill and medium-skill workers in the first place because of a preference for less education.

On AI, the panellists mentioned that it would be a very disruptive technology, driving productivity and that embracing change was key. The EU lags behind in AI, and is unlikely to catch up any time soon since its weaknesses are structural and lacks access to data and skills. There is a need to better understand what to do with such increasingly powerful tools and the emphasis must be on maintaining AI ecosystem wide open, for example by making datasets and training courses publicly available, to ensure no big player captures the entire technology’s power.

On innovation, there was an agreement that the EU was lagging behind. The reasons mentioned were the fact that creative destruction is not allowed to take place in this market, and therefore most start-ups fail to scale-up and are instead taken over by incumbents. Lack of access to finance and skills is another aspect, as well as the absence of a truly singly market. One of the problems highlighted, is that innovation and digital policies alike suffer from a crucial weakness: worryingly, new players and future players have little to no voice in the discussions that are instead influenced by incumbents.

In the fifth session, Vice-President and Commissioner Andrus Ansip addressed some of the topics that panels discussed during the day: AI and GDPR.

On AI, he highlighted the many productivity gains in various sectors, and therefore emphasized the need to demystify AI. Indeed, big data analytics technologies have been very helpful in the Agriculture and Fishing sector. He also highlighted the need of ensuring free data flows across member states if SMEs in Europe are to be competitive with companies already dominating big markets such as China and the US. Indeed, given the fragmentation of the current European digital market, start-ups have incentives to remain national players or to move away to the US to scale-up. He also outlined the Commission’s plan to have 20€ billion invested in AI by 2020 in order to catch up with global leaders of the field, and his optimism: indeed, there are many sectors in Europe where a lot of data is being collected that has not been collected in other countries, empowering the EU to develop new applications based on these specific types of data.

On GDPR, rather than being an extremely burdensome regulation, the Commissioner emphasized that it should be perceived as a way for the EU to place itself at the frontier in terms of privacy protection and other digital standards. He highlighted how facebook had already decided to implement the same standards to its other markets. Besides, GDPR ensures one coherent data policy EU-wide, rather than the many existing sets of rules previously. This should save tremendous costs to digital players. More fundamentally, since European citizens shall not accept that elections are being manipulated, since they care about freedom of speech and privacy as a fundamental rights, there is a need to find a balance – it is intrusive to collect too much data.

Event notes by Nicolas Moës

Schedule

Apr 23, 2018

08:30-09:00

Check in and breakfast

09:00-09:05

Welcome remarks

Maria Demertzis, Deputy Director

09:05-10:30

Session 1: Ensuring a fair and innovation-friendly platform Economy

Chair: Georgios Petropoulos, Research Fellow

Adina Claici, Director and head of the Brussels office at Copenhagen Economics

Siada El Ramly, Director General, EDiMA

Thomas Kramler, Antitrust: E-commerce and Data Economy, European Commission, DG COMP

Patrick Legros, Professor of Economics, ULB

10:30-10:45

Coffee break

10:45-12:15

Session 2: DSM initiatives: Achievements and prospects

Chair: Georgios Petropoulos, Research Fellow

Christian Borggreen, Vice President & Head Of Office, CCIA Europe

Roland Doll, Vice President European Affairs, Deutsche Telekom

David Martin Ruiz, Senior Legal Officer, The European Consumer Organization (BEUC)

Eva Maydell, Member of the European Parliament

Maximilian Strotmann, Communication Adviser, Cabinet of European Commissioner Andrus Ansip

12:15-12:45

Lunch break

12:45-14:15

Session 3: Tackling cybersecurity challenges

Chair: J. Scott Marcus, Senior Fellow

Jakub Boratyński, Head, Cybersecurity & Digital Privacy Unit, Directorate General for Communications Networks, Content and Technology, European Commission

George Christou, Professor of European Politics and Security, University of Warwick

Aidan Ryan, Telecommunications Adviser, ENISA

Mark Smitham, Senior manager of Cybersecurity policy, Microsoft

14:15-15:45

Session 4: Managing the digital transformation of our society and economy

Chair: André Sapir, Senior Fellow

Lie Junius, Director of EU Public Policy and Government Relations, Google

Oliver Roethig, Regional Secretary, UNI Europa

Reinhilde Veugelers, Senior Fellow

Andrew W. Wyckoff, Director, OECD Directorate for Science, Technology and Innovation

15:45-16:00

Coffee break

16:00-17:00

Discussion with the European Commissioner for Digital Single Market and Vice President of the European Commission

Chair: Guntram B. Wolff, Director

Andrus Ansip, Vice-President for the Digital Single Market, European Commission

17:00

End

Speakers

Andrus Ansip

Vice-President for the Digital Single Market, European Commission

George Christou

Professor of European Politics and Security, University of Warwick

Jakub Boratyński

Head, Cybersecurity & Digital Privacy Unit, Directorate General for Communications Networks, Content and Technology, European Commission

Christian Borggreen

Vice President & Head Of Office, CCIA Europe

Adina Claici

Director and head of the Brussels office at Copenhagen Economics

Maria Demertzis

Deputy Director

Roland Doll

Vice President European Affairs, Deutsche Telekom

Lie Junius

Director of EU Public Policy and Government Relations, Google

Thomas Kramler

Antitrust: E-commerce and Data Economy, European Commission, DG COMP

Patrick Legros

Professor of Economics, ULB

J. Scott Marcus

Senior Fellow

David Martin Ruiz

Senior Legal Officer, The European Consumer Organization (BEUC)

Eva Maydell

Member of the European Parliament

Georgios Petropoulos

Research Fellow

Siada El Ramly

Director General, EDiMA

Oliver Roethig

Regional Secretary, UNI Europa

Aidan Ryan

Telecommunications Adviser, ENISA

André Sapir

Senior Fellow

Mark Smitham

Senior manager of Cybersecurity policy, Microsoft

Maximilian Strotmann

Communication Adviser, Cabinet of European Commissioner Andrus Ansip

Reinhilde Veugelers

Senior Fellow

Guntram B. Wolff

Director

Andrew W. Wyckoff

Director, OECD Directorate for Science, Technology and Innovation

Location & Contact

Bruegel, Rue de la Charité 33, 1210 Brussels

Matilda Sevon

matilda.sevon@bruegel.org

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