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Report November 2, 2022

Digital sovereignty in practice: The EU’s push to shape the new global economy

By Frances Burwell and Kenneth Propp

As the digital landscape grows, the European Union (EU) is advancing its efforts to expand its indigenous technological capacities and establish global governance norms. This effort has significant implications for the economic and political underpinnings of the US-EU relationship.

Under the leadership of European Commission President Ursula von der Leyen, the idea of “digital sovereignty” has become a central—albeit nebulous and controversial—guiding principle for Europe’s engagement on digital and tech affairs.

Three years after von der Leyen first spoke of digital sovereignty, this Europe Center report explores what the concept has meant in practice, building on its 2020 report “The European Union and the search for digital sovereignty: Building “Fortress Europe” or preparing for a new world?”. The report identifies three common elements to digital sovereignty:

  • a greater commitment to supporting technology development within the EU;
  • an effort to elaborate global norms to govern data and the digital environment; and
  • greater restrictions on non-EU actors in the EU market.

This direction has outsized implications for the transatlantic relationship. By concentrating on digitizing the European economy and investing in technology capabilities, the EU hopes to make up for current shortfalls and to compete more robustly with digital powerhouses based in the United States and China. In areas such as artificial intelligence—where global norms and standards have yet to emerge—the EU sees its own regulatory efforts as a potential international “gold standard”, like the role that the General Data Protection Regulation has played across the globe.

These measures are not without controversy. For example, the Digital Markets Act, which imposes restrictions on the largest platform companies operating in Europe, is anticipated to affect US firms predominantly, and current proposals for a cybersecurity certification of cloud service providers would limit ownership by non-EU companies. These moves have led to tensions in the US-EU economic relationship—at a time where transatlantic unity is critical in an increasingly geopolitical world.  

What is the future of EU digital sovereignty? The European Union will continue to insist that European technology and innovation respect its own concepts of fundamental rights. The report also sees opportunities for democracies to build coalitions to fight growing authoritarian challenges to the liberal order. The global digital realm remains unwieldy and difficult to govern. Yet through creative and determined collaboration in the US-EU Trade and Technology Council, among other fora, policymakers on both sides of the Atlantic can begin to craft a common democratic approach to digital governance, benefiting an open global economy.

Related Experts: Frances Burwell and