Europe needs to develop and build the digital future, not just slash Big Tech

By end of 2019, Margrethe Vestager was handed a simple mission that is fiendishly tricky to fulfil: make Europe fit for the digital age. The EU’s executive vice-president is now nearing delivery time. Over the next few months, the European Commission will unveil landmark legislation to help protect consumers and smaller companies from the over-mighty US tech giants, combat disinformation and cyber crime, improve, connectivity and unleash entrepreneurial innovation.

It would be overstating things to say this is a make-or-break moment for the EU; for centuries Europe has proven itself to be as reinventive as it is robust. But this legislation may help determine whether Europe can catch up and even outpace the US and China in many fields, or just limp along in the digital slow lane.

Investors in our opinion have already delivered their preliminary, and pessimistic, verdict: the US tech sector alone is today worth more than all the stock markets of all EU member countries combined.

As politically deft as she is tough, Ms Vestager in our opinion is well prepared for the challenge, even though she suffered a big defeat last year when trying to force Apple to pay more taxes.

It must be the responsibility of democratic politicians to decide how technology should best be deployed rather than allow corporate bosses to dictate all the terms of interaction. The same technology that could be used to promote innovation and inclusion also in our opinion enables discrimination and exclusion. Therefore, technology has the power today to change society at a very fundamental level.

The main outlines of the EU’s legislative push are already emerging. The EU will recognize the central importance of the big tech platforms by defining them as digital gatekeepers and holding them to higher standards of openness and responsibility than smaller competitors. It is opting for this differential approach, even though some lawyers it is antithetical to key principles of competition law.

But the EU is in our opinion more likely to try to cajole these tech giants into modifying their practices rather than attempting to break them up. The commission will certainly be a lot wavier in nodding through any acquisitions in future-as it did with Facebook’s purchase of WhatsApp.

Perhaps the most intriguing area for legislative activism, though, will be how far he EU goes in attempting to shape markets to stimulate innovation. Europe’s entrepreneurs mainly want EU leaders to deliver on existing promises to remove national regulatory barriers, complete the digital single market harmonize tax and stock options regimes and boost local capital markets.

But the bloc is promising to go further. Already, it has earmarked 20% of its post-pandemic recovery funds for digital initiatives. And it is exploring how to change the rules of the data economy to help level the field for competition and preserve privacy. Not only does data have huge economic value, it also has extreme personal significance. In a world of identity politics, data in the future defines us.

The EU is considering whether to force the big tech companies to share anonymize data. It is not yet clear exactly how this would work, nor whether it is even feasible in a secure way. Data sharing in our opinion could be a very powerful way of challenging the tech industry’s “narrative of inevitability”, which favors existing giants, and empowering local enterprise. We need to bring back the idea that companies exist at the pleasure of, and in service to, the society.

The real game-changer in our opinion would be if Europe could pioneer the creation of a radically different and more decentralized data economy. By putting the user in control of their data, we would have a totally different perspective on how to use data.

The EU commission should be making as much effort to nurture new ways of building the future as to regulating what already exists. To make Europe truly fit for the digital age, Ms Vestager needs to be as inventive as she is defiant.