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 thatEurope 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 these policies and speculate on future opportunities for Europe that go beyond a defensive digital strategy.

Our observations

  • In May 2015, the European Union announced the Digital Single Market policy, which aims to remove trade barriers among EU members in the domains of digital marketing, e-commerce and telecommunications. The Digital Single Market is part of the Digital Agenda for Europe 2020. The directives on datasharing are within the scope of the Digital Single Market.
  • On the 19th of February, European Commission Vice President Margrethe Vestager presented a new package on data and artificial intelligence with a strong strategic focus on social AI and the re-use of data. Regarding the latter, it aims to establish a European data space in which data can seamlessly be shared among private and public organizations with the purpose of stimulating trade and innovation.
  • On the 17th of April, the European Union adopted the Directive on Copyright in the Digital Single Market. Similar to how the General Data Protection Regulation (GDPR) established individual data ownership rights, this directive aims to establish data ownership for content creators. However, this policy is more controversial, as it also goes against the an elementary aspect idea of reusing content for the purpose of user generated content.
  • The Dutch ministry of Economic affairs and Innopay did a study on the possibility of Dutch SMEs sharingdata. As a conclusion, they offered a framework covering nine important building blocks ranging from standardization, governance to rules for consent.
  • In the open-source community we can see the emergence of protocols (e.g. Ocean Protocol, Blockstack, IOTA) that aim to offer part solutions to a frictionless data exchange layer. Applications that are built on top of this soft infrastructure will be able to seamlessly exchange data as these protocols automatically handle indexing, pricing, payment, compliance, provenance, etc.
  • The Big Data Value Association, an industry-driven international not-for-profit organization that acts as the private counterpart to the EU Commission to implement the Big Data Value PPP program, published a whitepaper in 2019 in which it describes the many potential technical solutions for a European Data Sharing Space.

Connecting the dots

Currently, the internet seems to be headed 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 U.S. 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 friendlyinfrastructure, data localization, abandonment of global standards and formulating policies that allow for more topdown 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 ofnoteworthy digital champions and, as a consequence, is largely at the mercy of technologies and platforms from the U.S. 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 stimulate 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 notdirectly 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.

Implications

  • Europe could represent the third model of the internet, next to China’s state-driven model and the US’ industry-driven model to the internet. There is the possibility that these three models will become complementary and compensate for each other’s shortcomings.
  • A global data exchange layer will gradually develop, at first in the form of ad hoc data dumps between , then as agreement frameworks within industry sectors which will then be further abstracted and formalized into soft trustless infrastructure as the underlying technology becomes more scalable.
  • As with inequality and climate change Europe could also take the lead in developing a human-centric internet
  • A European stakeholder approach to the internet could strengthen alliances with countries that are also stuck between the digital hegemony of China and the US (e.g. India, SE Asia, Latin-America)