by Anna Bosch and Mike Sax
Recently, incoming European Commission President Ursula von der Leyen announced the full line-up for her new team. Over the last five years, the era of limited government interference for big tech in Europe came to an end as competition commissioner Margrethe Vestager began to implement an increasingly cautious and punitive policy approach. In addition, individual member states like France and Germany have started to treat technology policy like a challenge rather than an opportunity, demanding stricter rules and adopting their own regulations. This puts additional pressure on the European Union (EU) to avoid a patchwork and implement EU-wide plans. With Vestager’s selection to continue in her current Commission role and take on new responsibilities as executive vice president for digital, we expect a more assertive and expanded slate of priorities regarding technology. Below are key issue areas for ACT | The App Association members to watch.
IP, Taxes, and Privacy
Issues like privacy, copyright, a digital tax, and content liability are likely to remain on the agenda of the new Commission. With the implementation of the General Data Protection Regulation (GDPR), the previous Commission achieved its goal of an overhaul of Europe’s privacy rules, but it will be up to the new Commission to ensure that GDPR is actually working as intended, as many businesses continue to struggle with compliance. Although it passed, the Copyright Directive, with its tightened rules on the use of copyrighted materials online, remains highly controversial, and its implementation may turn into an issue for the new Commission to solve. Less successful on the other hand were efforts to implement a digital tax and addressing disinformation and liability for content on online platforms.
Policy and People
In her initial Agenda for Europe, von der Leyen set out six priorities, including “a Europe that is fit for the digital age” and “an economy that works for the people.” We appreciate the emphasis on supporting small businesses and the commitment to a dedicated small and medium enterprise (SME) strategy to ensure that SMEs can thrive and access markets and financing to grow and scale-up. Another promising aspect is the focus on digital literacy and improving skills and education needed for the digital age by improving the EU’s digital education plan. Von der Leyen’s strategy also states that she plans to turn current tax proposals into law, which could include the digital tax.
A Comprehensive Approach
“A Europe fit for the digital age” will require the Commission to work on an extensive list of issues. With respect to this commitment, the proposals focus on safe and ethical use of digital opportunities, as well as standard setting for 5G networks and technological sovereignty for Europe in some critical areas. We appreciate the emphasis on investing in new technologies like artificial intelligence (AI), blockchain, high-performance and quantum computing, as well as algorithms and other tools for data sharing and usage. Von der Leyen also stated she wants to put forward legislation for a coordinated European approach on the human and ethical implications of AI within her first 100 days in office and find a way to balance the flow and use of data while protecting privacy, security, and ethical standards. The (infamous) Digital Services Act is likely to return to the agenda, as von der Leyen’s Commission wants to upgrade liability and safety rules for digital platforms, services, and products. Moreover, her plan emphasizes the need to ensure that digital platforms aren’t used to destabilize democracies and the need to develop common standards to address disinformation and online hate speech.
The Digital Economy is the App Economy
For our members, both in the EU and around the world, the significance of where EU regulators move next is huge, as the bloc’s political decisions (e.g., GDPR) have and are likely to continue to have implications beyond its borders.The app economy and App Association members create millions of European jobs, power the growth of the internet of things (IoT), and are significantly contributing to the European economy. It is immensely important that innovative SMEs like our members are heard as the EU set its digital agenda and regulates online spaces.
Helping Competition Thrive
While we appreciate that President von der Leyen’s acknowledges the importance of an EU that is fit for the digital future, there are several things her Commission should prioritize when setting the agenda. The European Commission should focus on preserving the competitive environment of the app economyto protect the relatively low barrier to entry for small developers. We urge the Commission to consider all implications and nuances in each case when regulating platforms or designing an EU-wide digital tax framework and to refrain from making rules that favor larger companies. For our members, new and harmonized regulations are important because it allows them to compete on a level playing field, which is why the completion of the Digital Single Market (DSM) needs to be a top priority for the Commission. A completed DSM generates legal predictability and allows SMEs to focus their time and resources on improving their products and services rather than regulatory compliance and increases the overall attractiveness of the EU economy for startups. An innovation-friendly environment also means facilitating the free flow of data and refraining from imposing measures that require local storage or processing of data, facilitating and increasing investment in cutting-edge technologies like AI, and ensuring that regulation doesn’t stall innovation.
The App Association’s Recommendations
More specifically, we urge the Commission to:
- Encourage competition and preserve the competitive environment of the digital economy rather than limit it
- Avoid excessive regulation of platforms
- Avoid a common charger mandate
- Consider scalability for small businesses when reintroducing the e-Privacy and e-Evidence proposals
- Have an alternative plan in case the European Court of Justices strikes down the current U.S.-EU Privacy Shield
- Commit to a multilateral approach for a digital tax rather than allowing a patchwork of unilateral measures to emerge
- Commit to improving digital workforce education
- Use industry-led standards and best practices to enhance cybersecurity
- Support and promote fair, reasonable, and non-discriminatory (FRAND) terms for standard-essential patents (SEPs) and avoid endorsement of unreasonable licensing practices
- Encourage ethical design and responsible use of technological systems but avoid hard rules that inhibit innovation (e.g., on AI) and technology at the speed of government
- Take an EU-wide approach to 5G security to avoid diverging member state responses
- Progress the state of a borderless European healthcare system
If you are an app developer, we would love to hear from you! The App Association is committed to helping our members have their voices heard in current and future policy debates. We, therefore, also urge the Commission to strengthen stakeholder engagement and include SMEs in all debates that affect them. Only with small business interests in mind can the new digital agenda ensure an innovation-friendly environment that encourages investment and helps SMEs to create jobs and economic growth.
We want to improve the understanding between small technology companies and government officials by bringing them together and giving our members the opportunity to engage in the regulatory process. If you want to share your perspective with us on what matters to you, how possible regulations might affect your business, or what else government officials should be aware of, you should consider becoming a member of the App Association. We want to make sure the new European Commission hears your voice and would love for you to join us in our efforts to advocate for a policy environment that is friendly to small technology companies.