Transatlantic Digital Marketplace Initiative

All of the virus-related developments—growing skepticism about global sourcing, the deepening threat of disinformation, the centrality of digital services in a return towards normality, and the privacy and security questions that dog them—will have an impact on the EU’s longer-term quest for digital sovereignty.

On February 19, the European Commission launched a major regulatory initiative aimed at creating a transformational digital economy in Europe. Given the close integration of the US and European Union (EU) economies—including in the digital sphere—this European initiative is likely to have a significant impact on US companies and consumers.

In a little-noticed set of opinions issued on January 15, the European Court of Justice (ECJ) put forward a bold and unprecedented proposition—mass surveillance conducted by European Union (EU) member state national security services should operate within the bounds of the Union’s privacy laws.

Digital service taxes are one of the primary wedge issues in a larger transatlantic divide over digital policy. A tangible measure for politicians and the public alike, they could become one of the primary catalysts for the new European Commission’s quest for digital sovereignty.

This focus on digital policy is embedded in a new economic strategy that represents a return to thinking in traditional European terms about an industrial strategy, one that would ensure that European companies face a “level-playing field” on their own continent but that also makes room for innovative European start-ups.

European leaders are feeling besieged again. Having spent the past several years building up Europe’s physical defenses against migrants, they now see themselves faced with a less tangible sort of invasion—US technology companies dominating their markets and vacuuming up the personal data of their citizens. And so the cry has gone up from Berlin, Brussels, and Paris: “Digital sovereignty!”

Spurred by US criticism of the Chinese telecom supplier Huawei, and especially its participation in 5G networks, the European Union began developing an approach to this key issue over the last year.

By legislating the use of this key technology, the European Union will likely become the leading regulator for AI, as it has for privacy with the General Data Protection Regulation (GDPR). But the challenge for von der Leyen will be developing legislation that reflects European norms and values while also avoiding overregulation that might hinder innovation and investment.

As concern skyrockets over political disinformation, hate speech, and terrorist incitement on the Internet, legislators across Europe are scrambling for regulatory answers.

Under the outgoing European Commission of President Jean-Claude Juncker, the European Union has emerged as the regulatory superpower of the global digital economy. Early signs indicate Brussels will continue to leverage the power of the single market and its regulatory approach when a new Commission takes office in November 2019.

A quick look at how the new European Commission will line up on digital policy.

The new measure should be a warning that European states will adopt unilateral solutions to update tax rules