The digital war has been raging on between the United States and China for almost a decade now, with very different models of regulation. But what role can the European Union possibly play between the digital empires of the market-driven United States and the state-driven China? The organisation has been known for the so-called Brussels effect, meaning that the European Union can set global standards by extending its regulations through market mechanisms. But could this also be the case in the field of technology, earning the European Union – so far falling behind the United States and China – the eagerly desired tech sovereignty?
A digital Europe
At the beginning of the 2019-2024 cycle, an Executive Vice-President was assigned for a Europe fit for the Digital Age and an ambitious Commissioner for Internal Market. And so began the ‘regulatory tsunami’ as many like to call that. Among the more than 80 new EU-level regulations, the following are certainly worth featuring. The Digital Services Act (DSA) and the Digital Markets Act (DMA) both entered into force in November 2022. The DSA – applicable to all platforms since February 2024 – aims to ensure a safer online environment, preventing illegal activities and disinformation and protecting users, while the DMA – applicable since May 2023 – was designed to assure fairer and more contestable digital markets through a set of rules for the largest online platforms also known as ‘gatekeepers’.
Another important regulation could have been the European Chips Act which entered into force in September 2023 and applies ever since, encouraging semiconductor production for green and digital transition. However, it is speculated to have already failed, because the targeted 20% share of the global semiconductor market by 2030 seems to be too ambitious, especially considering how much the European Union would invest to achieve that. The European Data Act (EDA) which entered into force in January 2024, promoting fair data access and use, might be more successful, but as it will only be applicable from September 2025, we will have to wait to find it out. Last, but not least, the AI Act entered into force in August 2024 as the first comprehensive legal framework for Artificial Intelligence. The majority of the AI Act rules will be applicable by August 2026, but according to data, prominent tech companies fall short of the regulation in some specific areas, namely cybersecurity resilience and discriminatory output.
Even the Draghi report addressed the issue of the excessively growing number of regulations. No matter how pure the goal was, the overregulation could be just as counterproductive. Instead of giving European companies competitive advantage, too many and too complex regulations could rather create difficulties and barriers. As the saying goes, the road to hell is paved with good intentions. But instead of the Brussels effect taking place, the European Union risks making the already existing gap with the United States and China even bigger, while trying to be this rights-driven digital empire. No wonder why Draghi suggested to assess the existing regulations, notably in light of issues mentioned above.
A strong candidate
On the 17thof September 2024, indicating the incontestable significance of Tech Sovereignty, Security and Democracy, Commission President Ursula von der Leyen nominated an Executive Vice-President to tackle the portfolio. Finnish Henna Virkkunen was born in 1972 and started her career as Vice-Chair of the Central Finland Regional Council in 1999. She became Chair of the Jyvaskyla City Council in 2005, then Member of the Finnish Parliament in 2007. She worked as Vice-Chair of the National Coalition Party between 2008 and 2014. In the meantime, she also served as Minister of Education between 2008 and 2011, then as Minister of Public Administration and Local Government during the next three years, and finally as Minister of Transport and Local Government in 2014. She has been a Member of the European Parliament in the Group of the European People’s Party since 2014.
Virkkunen, who is quite a high-profile candidate, will presumably have no problem passing the hearing of the European Parliament. But after that, she might change the direction where Thierry Breton drove the European Union, since she is against unnecessary regulation and she favours compromise and mutual solutions with tech billionaires. Virkkunen is determined to boost the European tech sovereignty, but not at the price of protectionism or turning Europe inward, in contrast to Breton. Her country might be her biggest help on her mission as Finland outperforms when it comes to digital skills indicators, highly surpassing the European Union average.
A tough road
Even if this article focuses on the tech aspect, Henna Virkkunen will have a broader competence. Four Commissioners will work under her guidance, with the following portfolios: Democracy, Justice and Rule of Law; Defence and Space; Internal Affairs and Migration; as well as Startups, Research and Innovation. To name a few assignments related to other areas, Virkkunen will deal with the challenges concerning the rule of law, the development of the European Democracy Shield to fight foreign influence, the European Defence Union and defence industrial competitiveness, and the implementation of the Pact on Migration and Asylum. Nevertheless, Ursula von der Leyen’s mission letter puts tech sovereignty in the focus of Virkkunen’s mission with a detailed plan. On the way to reaching Europe’s 2030 Digital Decade targets, besides taking care of the already existing regulations, Virkkunen is tasked with setting up a European AI Research Council, developing the proposal for an EU Cloud and AI Development Act, working on a new Digital Networks Act, and presenting the European Data Union Strategy.
Virkkunen’s is not an easy portfolio, filled with areas facing crossroads. The 2024-2029 cycle might determine the European Union’s place among the digital empires of the United States and China. But the organisation will need more than high hopes to take up the competition and achieve Tech Sovereignty: the European Union will need a strategy. Of course, we can always believe that the Brussels effect would eventually kick in again, but for that, the regulations need to be close to flawless. Regulations that are already questionable even before becoming applicable and would rather need beta testing will not make the European Union a global standard setter, and definitely will not help to get ahead of the United States and China.