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European Data Strategy after COVID-19

 

The COVID-19 crisis has accelerated the trend towards digital transformation of our societies, economies and companies. Most importantly, the use of technologies in the supply chain, production, logistic and after-sales services has been essential in preventing the bankruptcy of many companies. We have learnt the lesson: those companies with the appropriate technology for their services and products has been able to continue their activity and maintain employment.

At the heart of all this technology is data and thus data is at the centre of Europe’s digital transformation. That is why the ambitious Data Strategy presented by the European Commission on 19th February becomes even more important. The recovery of the economy after an unprecedented lockdown will depend on such digital transformation in the medium and long term.

 

The European data strategy

 

The European Data Strategy proposes the vision for the EU to become a leading role model for a society empowered by data to make better decisions in business and the public sector.   

Creating a genuine single market for data will allow data to flow freely within the EU and across sectors for the benefit of Public Administrations, researchers, businesses and, more importantly, for citizens and society as a whole. The objective of taking full advantage of data driven innovation should be done following a "European way", putting individuals in first place and in accordance with European values, Fundamental Rights and rules. The Commission believes this is the way to ensure EU digital sovereignty in the long term.

To achieve this goal, the Commission has identified some issues that are holding Europe back from realizing its full potential in the data economy and will need to be tackled.

Firstly, availability of data. The value of data lies in its use and re-use. However, currently there is not enough available data for innovative re-use. Commission addresses three scenarios, Government to Business (G2B), Business to Business (B2B) and Business to Governments (B2G).  

Opening-up government-held information to private sector (G2B) is a long-standing EU policy since the old Public Sector Information Directive dated from 2003. The legal framework has been recently reviewed with the adoption of the Open Data Directive, which is expected to encourage Member States to make as much public sector information available for re-use by private sector as possible.

Regarding the data sharing between private companies, B2B has not taken off at sufficient scale due to lack of trust between economic operators, imbalances in negotiation power and lack of legal certainty.

It is a fact that currently, apart from some positive exceptions, there is little sustainable data sharing schemes by which Governments can develop evidence-based public policies based on data provided by private sector (B2G). This is manifested again with covid-19, which could have been controlled better if a sustainable data sharing initiative had been in place between industry and Governments. Unfortunately, very often, data sharing happens after a particular need or crisis occurs, and with a lot of time pressure. Covid-19 crisis should make Governments to understand that they can develop more efficient public policies with the aid of data insights.

Secondly, existing imbalances in market power in relation to access to and use of data. The Commission mentions the case of large online platforms, where a small number of players accumulate large amounts of data, gathering important insights and competitive advantages from the data they hold. The high degree of market power resulting from the “data advantage” can enable large players to set the rules on the platform and unilaterally impose conditions for access and use of data or, indeed, allow leveraging of such “power advantage” when developing new services and expanding towards new markets.

Other issues identified by the Commission include data interoperability and quality, data governance, data infrastructures and technologies, empowering individuals, skills and cybersecurity.

 

Projected figures 2025 data

Source: European Commission (2020)

 

To address the problems identified, the Data Strategy puts forward a roadmap of policy initiatives around four pillars.

  • Cross-sectoral governance framework for data access and use
  • Enablers - Investments in data and strengthening Europe’s capabilities and infrastructures for hosting, processing and using data, interoperability
  • Competences - Empowering individuals, investing in skills and in SMEs
  • Common European data spaces in strategic sectors and domains of public interest

The first pillar implies, by large, the greatest number of legislative initiatives including a legislative framework for the governance of common European data spaces to be proposed by the Commission by end 2020. Such governance structures and institutions at national and EU level should support decisions on what data can be used, how, by whom and in which situations, facilitate cross-border data use, and prioritise interoperability requirements and standards within and across sectors.  

Beginning 2021, the Commission will propose rules on key public sector data sets developing the recent Open Data Directive, in order to make key public sector data of great value available for reuse across the EU for free, in machine-readable format and through standardised Application Programming Interfaces (APIs).

The Strategy also announces a potential Data Act that could be proposed by the Commission in 2021. Its objective would be to incentivize horizontal data sharing across sectors (B2B) and between private sector and Governments (B2G). Voluntary data sharing should be the general principle, but Commission will evaluate if, in specific circumstances, access to data should be compulsory. The Commission also opens the door to possible legislation for B2G data sharing for the public interest in light with the Recommendations of the Expert Group on B2G data sharing, which were published the same day.

The accumulation of data by tech giants, the role of data in reinforcing imbalances and the way these big platforms use data is being analysed by the Commission. This important issue will be addressed by end 2020, not as part of the Data Act, but under a broad fact-finding exercice on the high degree of market power of such platforms, in the context of the Digital Services Act Package.

Data is a fundamental component of the Commission’s vision for Europe to have a leading role in the global digital economy. With the proposed policy initiatives, the Commission is looking to create a Single Market for Data as well as to position EU as a global model.

Telefónica shares this ambitious approach and calls on policymakers to work closely with European industry to agree on the implementation of the Data Strategy in order to ensure that the proposed actions materialize and support the continued growth of Europe’s economy and Europeans’ welfare. This is the time for an acceleration of digitalization and for this to happen the above challenges should be tackled in the required speed. The speed of technological innovation is exponential and decision-making process should encompass and understand this pace not to become obsolete at the time the proposals become applicable.  It is not too late, and we should work together to make it happen.

 

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