As we bid farewell to 2023, I’d like to reflect on what happened in our little EU tech and digital policy world over the last 12 months. Here is my personal recap of the six major issues that shaped and impacted the European Union’s digital ecosystem this year.
1. The year of AI?
2023 will undoubtedly be remembered as the “year of AI” as major advances in artificial intelligence (AI) technology gave hundreds of millions of consumers and businesses access to new and helpful tools. It’s all most people talk about, even on a night out with friends. This caught the attention of policymakers around the world, leading to so many different attempts at creating AI policies and rules at international, regional, and national levels. Everyone wanted to be “the first”, but no one really focused on being “the best”.
The EU’s AI Act was part of this global trend, aiming to provide clear guidelines for companies developing and using AI in Europe, although it now risks disappointing in what it achieves. Numerous sector-specific laws on AI are expected to emerge in 2024, covering areas such as liability, copyright, worker management, mobility, healthcare, and more. The actual implementation of Europe’s landmark AI Act and the development of EU and international standards will be crucial aspects for 2024 and beyond. Thankfully we’re also moving away from the doomsday talk on AI, as we now better understand the opportunities it creates for everyone.
2. “Fair share” proponents meet their Waterloo (again)
The connectivity debate, on the other hand, was all about network usage fees again – a.k.a. big telcos’ demands for “(un)fair share” payments. The year kicked off with a European Commission consultation on the fundamental question: should content and application providers be forced to pay fees to big telecom companies?
It ended with a clear and resounding “no” from just about everyone. Key stakeholders that make up the EU internet ecosystem voiced their grave concerns, fearing a mandatory payment or arbitration model would destroy the open internet. There was also a strong acknowledgment that content and services are the key drivers to stimulate takeup of new connectivity services, so it’s actually telecom operators that need content to survive.
Now, for 2024, there’s talk about a new Digital Networks Act (which would be preceded by a Commission white paper in February) and a promise that telecom rules will get a major overhaul in 2025. The big question is whether the EU, in the pursuit of its 2030 digital targets, will choose a forward-looking approach, or remain focused on ideas of the past.
3. Landmark competition law comes into effect
Another milestone was the EU Digital Markets Act (DMA) officially coming into effect this year. The regulation was designed to bring more contestability and fairness to digital markets. Companies in the scope of the DMA have been using 2023 to get ready for compliance as of March 2024. To that end, they have had to adapt their digital services and products to this new set of EU rules.
In the upcoming months, it’s crucial that DMA enforcement and compliance efforts take into account the realities of the tech industry, as well as the products and services it provides. Enforcement should also be proportionate and unbiased, meaning it shouldn’t go beyond what is strictly necessary to achieve the DMA’s goals of promoting competition and fairness. Is the DMA actually going to treat similar services the same way, as intended? It’s too soon to know for sure.
4. Cloud protectionism holds back cybersecurity
Is the EU going for cloud protectionism? At least not this year… yet. But one thing is clear: the various drafts of the EU Cybersecurity Scheme for Cloud Services (EUCS) that were leaked throughout 2023 show that it would structurally discriminate against foreign cloud vendors. Moreover, any EU Member State could use the EUCS to unilaterally restrict access to significant parts of its national markets, leading to fragmentation.
Appetite for finding a compromise appears non-existent, and ministers haven’t offered political guidance to the Commission on how to resolve today’s EUCS deadlock. But that is also difficult if you don’t have all the facts, including the impact assessment that governments have been calling for since last year. ECIPE conducted its own economic analysis, setting out the disastrous consequences of a discriminatory EUCS for Europe’s single market, cyber resilience, and international trade. The 1% of EUCS introducing China-like market access restrictions has been holding hostage the 99% that would actually improve cybersecurity.
5. Safer online experience requires better DSA implementation
2023 also marked the first year of the Digital Services Act’s (DSA) implementation. This flagship law was initiated by the Commission with the aim of offering Europeans a safer online experience by streamlining content moderation rules and introducing new obligations for online platforms. Yet, two main shortcomings became apparent throughout the course of the year. First of all, the DSA requires more time and people to be properly implemented, but those resources are lacking. That means many companies are trying to comply, but in semi-darkness.
Secondly, the DSA is already being questioned – and even contradicted – by other EU and national laws, like the European Media Freedom Act’s (EMFA) media exemption. As we head into 2024, it’s crucial that both shortcomings are addressed urgently, especially since the DSA will start to apply to all digital intermediaries (and not just very large online platforms) in February 2024. Ensuring the DSA remains a tool that harmonises the digital single market should be a key priority for next year.
6. Content moderation remains a balancing act
In the world of privacy, there were long talks about the balance between online safety and Europeans’ privacy, especially when trying to tackle child sexual abuse (CSA) content. These (sometimes thorny) discussions will carry on in 2024, emphasising the importance of taking an integrated approach to improving online safety. The goal should remain to strike the right balance between keeping children safe on the internet and respecting everyone’s right to confidentiality of communications.
This year also saw EU lawmakers adopt new regulations to make political advertising more transparent. That might sound like a good idea on paper, yet it remains to be seen whether the new ‘consent model’ that was part of the final political deal will really give users more control, or if it will just end up making the EU’s already complex data processing framework even more complicated, just in time for the European Parliament elections. We’ll have to see in 2024 how effective this turns out to be.
Final thoughts
As 2023 ends, we should all look back at what went right and what went wrong this year. I want to reiterate that Europe needs a forward-thinking approach to regulating the digital landscape. Based on these six major cases that defined the year, it’s safe to conclude that the EU should not regulate for the sake of regulating, but only to address actual problems faced by Europeans.
Politicians continue to worry about Europe losing its global leadership or competitiveness, but the solution cannot always be simply to create more (over)regulation and hope that somehow helps. It does not, nor does short-sighted protectionism.
For 2024, my hope is that the EU can focus on better digital policy making. We need to improve rules to ensure Europe grows and excels, rather than holding back our sector with more rules, fragmentation, and outdated ideas. It’s time to be creative to make a positive difference. Wishing you a prosperous and innovative 2024!