Over the last two decades the internet has gradually balkanized into myriad centralized spaces where either big tech or authoritarian state actors have become powerful gatekeepers. As a consequence, the project of an open global internet is jeopardized. It is against this backdrop that Europe is currently in the process of developing a data and AI strategy which should restore some of its competitiveness and sovereignty. Here we take a closer look at some of the policies and speculate on future opportunities for Europe that go beyond a defensive digital strategy.
Currently, the internet seems to be head in the direction of having a few actors decide the rules of our digital realm. On the one hand, we find a handful of big tech companies that have claimed the most important functions of the internet (e.g. access, storage, compute, search, commerce, entertainment) and have entrenched their position through data, network effects and political and financial power. Especially US. and Chinese platforms have been able to grow their platforms quickly due to their large internal market. On the other hand, we see governments that are gradually establishing their own stacks through the installment of friendly infrastructure, data localization, abandonment of global standards and formulating policies that allow for more top-down authoritarian state interference. In contrast, Europe has been facing fragmented data regulation among its members and has been lagging behind in terms of data availability, data standardization, data infrastructure, data quality, data interoperability, data governance and data literacy. In addition and partly thanks to aforementioned issues surrounding data, Europe has not been able to offer its own share of noteworthy digital champions and, as a consequence, is largely at the mercy of technologies and platforms from the US. In response, to regain some control over the situation, Europe has been working on data legislation and policies. In 2018, it introduced the regulatory framework GDPR to give its citizens more control over their personal data. In addition to these protective measures for its citizens, the European Commission is now also in the process of proposing an AI and data strategy in which it outlines policy measures and investments to the European digital economy for the next five years. As presented in its communication on the 19th of February, it aims to 1) introduce a cross-sectoral governance framework for data access and (re)use, 2) invest in Europe’s capabilities and infrastructure for hosting, processing and using data while also improving interoperability, 3) stimulate individuals’ and SMEs’ data skills and literacy and lastly, promote the development of common European data spaces in the domains of <manufacturing, mobility, health, finance, energy, agriculture, public administration and the European Green Deal. With its AI strategy, it aims to introduce measures to develop competitive AI (i.e. ecosystem of excellence) while also taking all the necessary precautions to ensure that these systems will be human-centric and to induce trust with their users (i.e. ecosystem of trust). Although these regulatory frameworks are an important first step in outlining Europe’s digital values and interest, it is generally perceived as a game of catch-up instead of changing the global rules of the game. Many of the issues concerning data in European industry refer to a deeper-seated problem with how the internet works globally. As discussed before, because of their client-server architecture, most platforms can treat data as an asset that can be extracted from their users to then be locked away within the platform’s silo, only accessible when terms set out by the platform owner are met.
As a result, individual data ownership and the potential collective value of data are subordinate to the interest of the platform. Investing in local cloud infrastructure (e.g. Gaia X) will not fundamentally change this dynamic, as it only determines where data is stored but not directly how data is governed and exchanged. Going forward, the EU could consider a more ambitious and scalable approach by facilitating the development of a soft infrastructure layer, i.e. a layer based on software protocols in which the access to computational resources can be collectively managed, and in effect could disrupt the siloed model of the internet globally. Here, the EU could find an interesting ally in the open source community, which is currently working on such decentralized internet protocols, which on the one hand aim to place data under the direct control of the rightful stakeholders through data provenance and rights management tools (i.e. data vault) and on the other hand makes these datasets seamlessly accessible to other public and/or private services through global data marketplaces in which data owners can be compensated for the use of their data (i.e. data exchange layer). These protocols will not only benefit the rightful data owners, but could generate substantial network effects and open innovation for the system as a whole, as all stakeholders stand to benefit from greater data accessibility as opposed to only a handful of gatekeepers having access.As a result we could see the rise of digital mega-ecosystems where services can frictionlessly share data and work together to meet the market’s demand. There also seems to be a natural fit with the European governance model as the decentralized nature of this type of soft infrastructure resembles more closely the Rhineland “stakeholder” model. Governance decisions can be voted on by network stakeholders while consensus protocols and blockchains facilitate trust by creating game-theoretical interdependencies in which it is very unlikely for a single actor to game the system. As these ecosystems are also open in nature, these ecosystems do not necessarily have to limit themselves to European members but could also allow other countries that want to withdraw from the more centralized stacks. Furthermore, the decentralized and thereby trusted infrastructure also creates the possibility that many of the EU digital market regulations can be programmed into smart contracts, thereby enabling automatic compliance upfront. This should solve the issue of digital law enforcement, which will become even more pressing as the frequency and complexity of digital interactions increase. The development of such soft infrastructure will not only serve an ideological cause but could benefit from systemic tailwinds and has the potential to reinstate a global internet that is based on interoperability, openness, privacy, sovereignty and open innovation.
