20 February, 2020

Europe’s unapologetic data ambition: a note from EU telcos

By Paolo Grassia, ETNO Director of Public Policy

Digital transformation has led to data becoming a key asset, but also a production factor in its own right. Consumers enjoy a wealth of new data-based services and Europe’s industrial base is trying to catch the wave and increase its global competitiveness. The European Commission has recognised this trend and, this week, it presented an ambitious “Communication on a European Data Strategy”, which was welcomed by ETNO. Telecom companies will have a major role in delivering on Europe’s data ambitions, but also in promoting a trust-based model for the data economy. Here are our views.

New Connectivity and the Data Economy

Secure connectivity through 5G and fibre-based technology is considered a key enabler of Europe’s digital economy as well as a booster for digitisation of services and industrial processes. 5G will fuel rapid growth of the Internet of Things (IoT): the number of mobile IoT connections in Europe is set to grow from 140 million in 2018 to nearly 740 million by 2026.

The massive amount of data generated by IoT connections and devices will create fresh resources for growing data analytics and Artificial Intelligence (AI) in Europe, which will give another boost to the competitiveness of the EU economy.  As reckoned by the European Commission, by 2025 data analytics will take place mostly in connected devices and edge computing, which is underpinned by smart, software-defined 5G networks.

5G will then drive IoT, and IoT will in turn fuel European AI. Together they can form a truly powerful virtuous circle that creates a new promise for globally competitive European industries. The success of this virtuous circle rests on the availability of a crucial asset: data. If Europe is to scale and compete globally in AI, digital networks can empower a responsible use of new data sources.  Boosting the data economy is a cornerstone of Europe’s digital leadership ambitions.

Europe’s new policy ambition on data

It is against this background that ETNO welcomed the European Commission’s “Communication on a European Strategy for data”. It sets the right vision and goals for creating a European single data market that drives competitiveness and builds a robust governance model – a ‘European way’ –  in the global data economy.

We commend the Commission’s commitments to achieving this bold vision by levering regulation, technical enablers, and competences to remove existing barriers to data sharing, pooling and scaling in a coordinated way.

Access to data and usability of data are becoming a key factor in fostering competition, innovation and value-creation, both for private and public organisations.  Against this background, the key issue is how we ignite European growth and innovation through more and easier data sharing between businesses (B2B) and with the public sector (B2G), while taking into account people’s data rights. To complement that, we should scale up investment in technical enablers and digital skills, as these will ultimately determine the ability of European actors to compete in a data-agile economy.

Mobilising the EU data economy and tackling dominance

We have some concrete ideas on the way forward, as the Commission moves to implement the new Data Strategy. We focus here on the cross-sectorial measures for data access and use, as anticipated by the Strategy. We believe there are some principles to be taken into account when enabling the framework for data access in B2B and B2G environments, particularly in the context of a future ‘Data Act’. Also, as data becomes the core of the relationship between companies and consumers, we also have some views how to effectively tackle anticompetitive behaviour linked to data.

  • Preserve the voluntary, contractual sharing of non-personal data in B2B and B2G This helps to safeguard the incentive for European companies to invest more in high-quality, reusable data that are currently exchanged based on contractual conditions. Voluntary agreements allow to maximise mutual benefits, protect business secrets, and ensure fair compensation, which is a crucial incentive to innovate.
  • Encourage voluntary B2B sharing and pooling of big data from different sources. Interoperability is a critical factor for this to happen. Actions to increase standardisation and interoperability of data formats should be tested on some key datasets from different sectors.
  • Adapt competition law to the new characteristics of the digital economy. As consumers increasingly rely on data-based services, this is crucial if we are to tackle the unprecedented level of concentration in online markets like social networks, marketplaces, and cloud services, where a few major players leverage their market position. Just think of access to (mostly personal) data, which is concentrated and risks raising barriers to competition in digital markets. Conditions and oversight of data access obligations as a remedy under EU competition law should be clarified and made more practicable.
  • Where the above adaptations are found to be insufficient, we agree that the Commission should consider complementing competition law with a targeted ex-ante regulatory framework. This should be aimed at dominant players with large and enduring user-base, significant usage, or creating direct and indirect network effects. This would require a thorough assessment of the markets that are prone to systemic anticompetitive behaviour and market foreclosure.
  • Facilitate industry cooperation, notably on responsible collection and pooling of European data, so that we can create European hubs for big data, which will be crucial for AI purposes. Updating the tools of competition policy, such as the Horizontal Cooperation Guidelines, will be key to supporting data pooling and sharing agreements among European players so that they can innovate and compete on the global market. 
  • Ensure that Europe’s budget on digitalisation is ambitious also in the field of development of European data spaces, with bold and coordinated funding from the Horizon Europe, Digital Europe and Connecting Europe Facility programmes. These instruments should promote storage and provision of data in a standardised, open, secure and transparent environment (e.g., Gaia-X).
  • Beyond just the Data Strategy, we must also create future-oriented regulation that enables data-driven innovation and solves the persisting regulatory unbalances between players who offer similar services. The proposed ePrivacy Regulation should protect the privacy of Europeans, while keeping up with fast-paced technological developments and letting European industry use data responsibly: this is a key factor to foster EU innovation and competitiveness. It is also a point in case, as we should stop imposing stricter rules on data emerging from mobile networks, as opposed to similar data coming from other sources (e.g. GPS). The current proposal regrettably does not enable the Commission’s vision for a Europe “Fit for the digital age”.

The development of a data economy is one of the major phenomena that rocks our times. Executive Vice-President Vestager and Commissioner Breton have been clear on the fact that Europe now has bold digital ambitions. The work has just started, but the objective is clear: empower European citizens through trustworthy data services. We are looking forward to helping the EU deliver on this ambition.

© ETNO 2023
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