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Embracing tech innovation for Europe to prosper – 5 key issues for the Spanish EU Presidency

Consumer habits and needs are changing rapidly. That is why the EU’s digital policies should take a more user-focused approach in order to deliver the innovation, openness, and flexibility that Europeans expect and demand today.

This blog post identifies five of the most pressing issues in the field of EU innovation and tech policy that Spain should prioritise during its Presidency of the Council of the European Union in the second half of 2023.

1. Protect the open internet, reject network fees

Big telecom operators want the EU to introduce network fees, which content and application providers would have to pay to telcos whenever internet users want to access online content or services. If turned into legislation, European consumers and businesses would end up paying more for cloud and streaming services, and Europe’s digital economy would be hit by new barriers to innovation and growth.

Network fees also pose a fundamental threat to the net neutrality principles underpinning the open internet. The body of European telecom regulators (BEREC) concluded there is “no evidence that such mechanism is justified” and warned of its “significant harm to the internet ecosystem.” Digital rights groups, academics, internet experts, consumer organisations, and others have voiced similar, strong concerns. The European Commission’s own figures show that full fibre and 5G roll-out is already well within reach at current investment levels. Accordingly, EU policy and decision makers should reject network usage fees, or any other mandatory payment mechanism for that matter.

2. Reap the benefits of AI through a risk-based approach

Artificial intelligence (AI) can help solve many of the challenges that Europe faces today, such as fighting climate change and improving road safety. The tech sector supports the risk-based, technology-neutral, and targeted approach of the Commission’s original AI Act proposal. Nevertheless, the Act would greatly benefit from clearer definitions, more narrow classifications of “high-risk” AI systems and use cases, as well as bans based on clear methodology. The proposed distribution of responsibilities across the AI value chain also requires a better balance between developers, deployers, and other actors.

Any blanket imposition of obligations on all general-purpose AI (GPAI) systems or foundation models, including open-source ones, should also be avoided. Focussing on specific technologies in the AI Act, rather than the high-risk context in which they can be used, is likely to hamper innovation and put European developers at a competitive disadvantage. As technology continues to evolve rapidly, any attempts to regulate specific AI technology instead of risks simply will not stand the test of time.

3. Ensure effective enforcement of the Digital Markets Act

Compliance with the Digital Markets Act (DMA) demands far-reaching and fundamental changes to the way digital services are designed and delivered in Europe. Member States should also make sure that the European Commission has sufficient resources at its disposal to engage in a meaningful regulatory dialogue and clarify any ambiguities surrounding the DMA’s implementation in a timely fashion.

Implementation of the DMA should not sacrifice proportionate enforcement for expediency of proceedings, which could harm the user experience. Furthermore, core platform services that meet the designation criteria should be treated without discrimination based on country of origin. These are issues that Member States should address at the working party level in the Council during their regular exchanges with the Commission.

4. Adapt social and work policies to a changing world

Europe would benefit from a regulatory approach preserving independent work that is flexible, accessible, and high-quality in nature. Allowing platforms to provide insurance and protection to improve working conditions, while maintaining quality and price protections for consumers, requires a forward-looking approach to platform work. Policymakers should avoid overly-prescriptive or presumptive rules that risk affecting millions of genuinely self-employed Europeans instead of combatting bogus self-employment. Preserving the freedom and flexibility that platform workers value will create jobs and strengthen Europe’s economic resilience.

5. Introduce pro-innovation rules for payments and open finance

The European Commission’s recent proposals for a new Directive on payment services and electronic money services (PSD3), Payment Services Regulation (PSR), as well as regulation on Financial Data Access (FIDA), are all opportunities to accelerate the deployment of new digital services for European consumers and small businesses. Europe should encourage the development of market-driven rules which are truly conducive of innovation, competition, and which promote consumer trust in the sharing of financial data.

European Union

DisCo is dedicated to examining technology and policy at a global scale.  Developments in the European Union play a considerable role in shaping both European and global technology markets.  EU regulations related to copyright, competition, privacy, innovation, and trade all affect the international development of technology and tech markets.