EU digital package

EU sets out plans to create "a Europe fit for the digital age".

What's the issue?

As the new European Commission led by Ursula von der Leyen settles in, it is starting to set out its legislative agenda in more concrete terms.  With the Digital Single Market project more or less completed, the next phase to create "a Europe fit for the digital age" working towards a climate-neutral EU by 2050 begins.

What's the development?

The European Commission has published a package of proposals on the EU's digital future to create a "Europe fit for the Digital Age", including:

• A Communication on shaping Europe's digital future
• A Communication on a European Strategy for Data
• A White Paper on AI
• A report on safety and liability implications of AI, IoT and robotics
• Various fact sheets and Q&As.

The Commission aims to make the world's digital technology work for everyone which includes developing trust through transparency, and to encourage technological advances.

What does this mean for you?

This is an ambitious set of proposals covering a wide range of technologies and legal issues including data privacy, competition, consumer protection, regulation of digital finance and of the media.  It seems unlikely any concrete legislation will be completed before the end of the Brexit transition period but the UK will need to keep a close watch on the EU's approach.

Of particular interest is the apparent move towards an increasingly localised EU data market in certain sectors with the creation of common EU data spaces.  The UK will (unless agreement is reached to the contrary) sit outside these.

The UK is looking at many of the same issues and the ICO has just published its draft guidance on the AI auditing framework for consultation.  The draft guidance runs to over 100 pages and deals strictly with data protection compliance for AI rather than with ethical issues but it will be interesting to see how this sensitive and rapidly developing area evolves with the UK outside the EU.  The more fragmented the AI framework becomes and the more the UK diverges from the EU, the more complex the area will become for UK businesses seeking to work with or sell to the EU.

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Communication on shaping Europe's digital future

The Communication sets out how to implement the EC's three key objectives of creating:

• Technology that works for people.
• A fair and competitive economy.
• An open, democratic and sustainable society.

Key proposals and actions include:

• White Paper on Artificial Intelligence setting out options for a legislative framework for trustworthy AI (adopted together with this Communication), with a follow-up on safety, liability, fundamental rights and data (Q4 2020) (see below).
• Building and deploying cutting-edge joint digital capacities in the areas of AI, cyber, super and quantum computing, quantum communication and blockchain. European Strategies on Quantum and blockchain (Q2 2020) as well as a revised EuroHPC Regulation on supercomputing.
• Accelerating investments in Europe’s Gigabit connectivity, through a revision of the Broadband Cost Reduction Directive, an updated Action Plan on 5G and 6G, a new Radio Spectrum Policy Programme (2021). 5G corridors for connected and automated mobility, including railway corridors, will be rolled out (2021-2030) (2021-2023).
• A European cybersecurity strategy, including the establishment of a joint Cybersecurity Unit, a Review of the Security of Network and Information Systems (NIS) Directive and giving a push to the single market for cybersecurity.
• A Digital Education Action Plan to boost digital literacy and competences at all levels of education (Q2 2020).
• A reinforced Skills Agenda to strengthen digital skills throughout society and a reinforced Youth Guarantee to put a strong focus on digital skills in early career transitions (Q2 2020).
• Initiative to improve labour conditions of platform workers (2021).
• A reinforced EU governments interoperability strategy to ensure coordination and common standards for secure and borderless public sector data flows and services. (2021).
• A European Data Strategy to make Europe a global leader in the data-agile economy (February 2020), announcing a legislative framework for data governance (Q4 2020) and a possible Data Act (2021) (see below).
• Ongoing evaluation and review of the fitness of EU competition rules for the digital age (2020-2023), and launch of a sector inquiry (2020).
• The Commission will further explore, in the context of the Digital Services Act package, ex ante rules to ensure that markets characterised by large platforms with significant network effects acting as gatekeepers, remain fair and contestable for innovators, businesses, and new market entrants. (Q4 2020).
• An Industrial Strategy Package putting forward a range of actions to facilitate the transformation towards clean, circular, digital and globally competitive EU industries, including SMEs and the reinforcement of single market rules.
• A framework to enable convenient, competitive and secure Digital Finance, including legislative proposals on crypto assets, and on digital operational and cyber resilience in the financial sector and a strategy towards an integrated EU payments market that supports pan-European digital payment services and solutions (Q3 2020).
• Communication on Business Taxation for the 21st century, taking into account the progress made in the context of the Organisation for Economic Cooperation and Development (OECD) to address the tax challenges arising from the digitisation of the economy.
• Delivering a new Consumer Agenda, which will empower consumers to make informed choices and play an active role in the digital transformation (Q4 2020).
• New and revised rules to deepen the Internal Market for Digital Services, by increasing and harmonising the responsibilities of online platforms and information service providers and reinforce the oversight over platforms’ content policies in the EU. (Q4 2020, as part of the Digital Services Act package).
• Revision of eIDAS Regulation to improve its effectiveness, extend its benefits to the private sector and promote trusted digital identities for all Europeans (Q4 2020).
• Media and audiovisual Action Plan to support digital transformation and competitiveness of the audiovisual and media sector, to stimulate access to quality content and media pluralism (Q4 2020).
• European Democracy Action Plan to improve the resilience of the EU's democratic systems, support media pluralism and address the threats of external intervention in European elections (Q4 2020).
• Destination Earth, initiative to develop a high precision digital model of Earth (a “Digital Twin of the Earth”) that would improve Europe’s environmental prediction and crisis management capabilities (Timing: from 2021).
• A circular electronics initiative, mobilising existing and new instruments in line with the policy framework for sustainable products of the forthcoming circular economy action plan, to ensure that devices are designed for durability, maintenance, dismantling, reuse and recycling and including a right to repair or upgrade to extend the lifecycle of electronic devices and to avoid premature obsolescence (2021).
• Initiatives to achieve climate-neutral, highly energy efficient and sustainable data centres by no later than 2030 and transparency measures for telecoms operators on their environmental footprint.
• The promotion of electronic health records based on a common European exchange format to give European citizens secure access to and exchange of health data across the EU.
• A European health data space to improve safe and secure accessibility of health data allowing for targeted and faster research, diagnosis and treatment (from 2022).

Communication on a European Strategy for Data

The EC identifies a number of issues preventing the EU realising the full potential of the data economy, including a lack of re-use of data, imbalances in market power, issues with data interoperability, supply and demand problems with the cloud, insufficient empowerment of individuals to exercise their rights, and insufficient cybersecurity.  Key proposals include:

• The creation of nine common EU data spaces across sectors including healthcare, mobility, environment, finance, agriculture and energy through a legislative framework (Q4 2020).
• An implementing Act to open up public sector datasets of high commercial and societal value and facilitating the use of publicly held sensitive data such as health records or social data (Q1 2021).
• A possible Data Act (2021) to foster business to government data sharing in the public interest.
• Analysis of the importance of data in the digital economy and review of the existing policy framework in the context of the Digital Services Act Package (Q4 2020).
• Investing in a High Impact project on European data spaces encompassing data sharing architectures and governance mechanisms, as well as a European federation of trustworthy cloud infrastructures and related services (phase 1, 2022).
• Signing an MoU with Member States on cloud federation (Q3 2020).
• Launching a European cloud services marketplace integrating the full stack of cloud service offering (Q4 2022).
• Exploring enhancing the data portability right for individuals under Article 20 GDPR, to give them more control over who can access and use machine-generated data (possibly as part of a new Data Act in 2021).
• Creating a framework to measure data flows and estimate their economic value within Europe and between Europe and the rest of the world.

The proposals have created concerns that the EU is looking at introducing data localisation requirements and that businesses, in particular the tech giants, will be forced to share their data under certain circumstances.

White Paper on AI

The White Paper on AI presents policy and regulatory options to help create excellence and trust in AI. To achieve excellence, the EC proposes:

• Setting up a new public-private partnership in AI and robotics.
• Strengthening and connecting AI research excellence centres.
• Having at least one digital innovation hub per Member State specialised in AI.
• Providing more equity financing for development and use of AI, with the help of the European Investment Fund.
• Using AI to make public procurement processes more efficient.
• Supporting the procurement of AI systems by public bodies.

To develop trust, the EC proposes:

• New legislation on AI which should take a risk-based approach, it should be effective but not limit innovation.
• Requiring high-risk AI systems to be transparent, traceable and under human control.
• Allowing authorities to check AI systems, just as they check cosmetics, cars or toys.
• Ensuring unbiased data sets.
• Launching an EU-wide debate on the use of remote biometric identification (e.g. facial recognition).

Contrary to expectation, the EU has not proposed a ban on the use of facial recognition technology.  High-risk AI will be subject to strict rules including compliance tests, controls and sanctions.  High-risk AI covers AI used in critical sectors of healthcare, transport, the police and the legal system, or where the use of AI is critical in that it has legal effects or carries a risk of death, personal injury or damage.

In terms of regulatory plans, the EC intends to build on existing frameworks in order to cover the most significant risks associated with the use of AI (including personal data and privacy protection and non-discrimination) as well as safety and liability issues.  It will need to decide on definitions and scope including mandatory legal requirements.  Any legislation should take a risk-based approach with a cooperation mechanism for competent Member State authorities a likely option.

Report on safety and liability implications of AI, IoT and robotics

The EC report concluded that current product safety legislation already confers a high degree of protection in terms of the safety risks of using AI, IoT devices and robotics.  It does, however, think that provisions explicitly covering new risk created by emerging digital technologies may be required to provide greater legal certainty.