Challenges and uncertainties for the deployment of the Data Economy in Europe

Four years after the publication of the European Commission's Communication 'A Data Strategy', the European Commission has published a Communication on the European Commission's 'Data Strategy'A Data Strategy' (February 2020) (February 2020) - setting out the broad outlines of the broad outlines of the European Union's future data economy - the profusion of data-related regulation, the growing importance of open data and the deployment of initiatives of all kinds that have an impact on the development of this area, make it advisable to carry out a review to update the state of the art. This is what the members of the PromethEUs network1 thought, under the title of 'The European Data Strategy from a Multidimensional Perspectivein June 2023, they published an analysis of the European Data Strategy from two main perspectives: political and regulatory aspectson the one hand, and geopolitical aspectson the other. This analysis is complemented by two chapters presenting the economic impact of data-driven innovation and the specific case of the digitisation of the health sector in Southern Europe.

The first of the analyses - produced by the Portuguese Institute for Public Policy-- starts from the main idea that the European Union aspires to create a data-driven economy with citizens at its centre. An objective that will, in part, be achieved by implementing the guidelines followed by legislative acts such as the Regulation on Data Governance (DGA) Regulation and the Data Act (Data Act).

Regulations to consider

In essence, the DGA enables an enabling framework for data exchange, promoting the availability of data and the creation of a reliable and secure environment in which to realise new innovative services and products. Among its main measures, three aspects stand out:

1. More extensive re-use of protected information held by the public sector (with full respect for its privacy and confidentiality).
2. A framework for the promotion of neutral data brokering services, guaranteeing data sovereignty.
3. Mechanisms for the altruistic transfer of data.

The DA aims to establish harmonised rules on fair access and use of data, to address imbalances in contractual relations between providers and users regarding ownership and use of data, to promote interoperability and efficient portability of data, and to ensure minimum conditions for users of data processing services.

Other regulatory texts have a direct or indirect impact on the overall objective described above and interact significantly with both the above-mentioned DGA and DA, as well as with specific sectoral regulations. These include the Open Data Directive (2019), the Digital Bill of Rights (2022), the Digital Markets Actact, the Digital Services Act, or the proposals for the Artificial Intelligence Actfor the aI Liability Directive and for the Gigabit Infrastructure Act. All this without forgetting the decisive impact on this field of both the Personal Data Protection Regulation (2016) and the Directive on Privacy and Electronic Communications (2002), which will be replaced by the forthcoming Regulation on the same subject.

Effects of the European data strategy

After reviewing the most relevant aspects of this regulation, the PromethEUs document highlights three dimensions in terms of the effects of the European Data Strategy: political, economic and regulatory. Effects, on the other hand, which they expect to be positive overall, although they recognise that there is uncertainty about the associated laws and their practical implementation.

Political dimension

In the policy dimension, the authors highlight the role that both the European Commission and the European Data Innovation Board (EDIB) provided for in Article 29 of the DGA will play. The EDIB has an indispensable co-ordination role which will also have to be deployed in relation to the Member States and the respective competent authorities. In this sense, the authors warn, the lack of coordination can lead to a heterogeneous institutional framework that can delay the implementation of the Strategy. They also recommend the establishment of clear guidelines and even guidelines to prevent possible confusion as to the requirements and possible penalties imposed by states.

Economic dimension

On the economic dimension, the report highlights that the Commission expects a clear positive impact and cites an OECD study that estimates that data access and sharing will generate social and economic benefits of between 0.1 and 1.5% of GDP in the public data sector, rising to between 1 and 2.5% (some studies put it at 4%) in the private sector. The Commission, the document explains, estimates that the increased availability of data for commercial use and innovation among businesses, as well as for consumers and companies using connected products and related services, could generate up to €196.7 billion per year by 2028. The implementation of the DA alone will create up to 2.2 million jobs in the period 2024-2028.

In this sense, and in relation to the Strategy's objective of boosting competitiveness and R&D investment, the authors say that the DGA and the DA should build trust for B2B data sharing; and that the central idea would be for companies not to focus their resources and business model exclusively on the internal maintenance of their data, but on the creation of value through data transformation and combination. Likewise, in relation to SMEs, they point to the need to reduce access barriers and especially compliance costs that may be induced by the DA. Even considering that SMEs are protected in many respects, they explain, such costs can be a setback for many companies. So, they say, while for some it may mean added financial costs, for others it may mean a complete redesign of the company's business models.

Regulatory dimension

Finally, regarding the regulatory dimension, the authors point out that the implementation of the DA and the DGA will require well-trained regulatory bodies for the abundant work that will emanate from them. The creation of effective corps will require, they explain, a significant investment in human resources and skills. They also warn of the risk of overlapping powers between public administrations and regulators in areas such as data protection, cybersecurity, network infrastructure and competition issues. Therefore, they conclude, proper coordination of activities, among other issues, will be of paramount importance.

Indeed, coordination is a key concept at all levels. The evolution of the Data Economy - both at EU level and globally - is linked, whatever the field under analysis, to this essential factor. A factor applicable to how the European Strategy, the real baton that is setting the pace of this process, is implemented and deployed. But it also applies to the way in which the multiple regulations concerned are interrelated and, consequently, to the essential harmonised action of the authorities and bodies that apply them in their respective areas of competence. In short, a coordination that, like the conductor's virtuoso baton, allows for a successful execution of the score. A score - the European Strategy - that translates into the vigorous melody that the Data Economy promises, as already demonstrated by the indicators and records that outline its unstoppable evolution.