EU-US Digital Policy Agenda
Ladies and gentlemen, please welcome distinguished fellow for the Europe Center at the Atlantic Council and senior director at McLarty Associates, Dr Frances Burwell to moderate our discussion on the EU US digital policy agenda. Thank you, everyone and welcome again to the first live session. Other than the welcome addresses, Uh, at this combined At this combined e U. U S Future Forum and EU Defense Washington Forum. While most of today's sessions will focus on the big issues
of national security and defense policy, We are here at this session to discuss technology and digital policy and the challenges facing the EU and us in terms of their own cooperation. Uh, on this area and also the opportunities should they be able to get that co operation underway with great strength and vigor, But before introducing my Panelists, I want to put a few facts on the table. Um in 2020. The U. S exported 247 billion in digitally enabled
services to Europe and imported 142 billion, So we have a good trade surplus there. But these U. S. Exports to Europe were almost three times greater than similar exports to Latin America. And double all U. S exports to the Asia Pacific, which, of course, includes China.
Just to give you a sense of the partnership between the US and the EU in this, As for EU digitally enabled exports once you look outside of Europe, the U. S is the biggest importer. And this Exchange is mutually reinforcing. So I think, just as with the Traditional economy, our new digital economy, the US and the EU are repeating their experience where they have been each other's best market. And have the potential to be the leaders in structuring that world that new world economy Now to introduce my Panelists. Uh, first we had hoped to have both
here on the stage with me. But unfortunately from the Commerce Department head, Dean has been struck down by covid and will be unable to join us. But we have the excellent garage DeGraff from the European Commission. He also hoped to be here, but strikes in Belgium at the airport prevented him from Leaving so unfortunately, are very forward looking and modern panel has also been hit by the current issues of the day. Um and introducing Mr DeGraff. He is the director for digital economy and coordination at DG Connect the division of the European Commission that has a lead role in this area of policy. He leads the work of
the European Commission on platform and Tech regulation. And he also coordinates the digital components of the EU Recovery Fund. Now this is something that is being managed across all the member states. It totals about €750 billion And each member state has been told to put approximately 20% of their allocation into digital transformation. So this is a very large portfolio that he's also dealing with. He
has worked on digital issues for at least a decade and before that worked on very relevant portfolios of research. And industry in the commission. He also served as trade counselor here in Washington. Back when the delegation was the European Commission delegation, rather than the EU delegation in shorthand he's often referred to as Mr D. M. A.
De esa for the Digital Markets Act. Digital Services Act. So welcome to garage. The graph. Ah! Go out before we get into the specifics of EU digital policy, I'd like to start with the more general question. Um, Many of those participating in the conference today are more focused on national security and defense and on foreign policy issues. I, Whereas digital policy is often seen as the province of nerds, uh, to put it, frankly and as a A limited sphere of policy for government.
So why should this panel the participants here? Care about this panel? What are the implications of a failure of the US and EU to cooperate for our security for the larger interests of the US and the United States? Over to you garage. Good morning, friend. Good morning participants. Very pleased to be with you. I would have been even more pleased that I've been with you physically, but unfortunately, it wasn't Possible a very important question. And I think already during the opening session, I mean nothing. Some of the pointers were given
our societies, our economies. Our digital digital. Is is used. Increasingly, We talked about the Russian invasion in Ukraine. I mean, the war is also taking place in cyberspace through cyber attacks through disinformation that is spreading not only in Russia and Ukraine but also increasingly In Africa, Latin America, destabilizing societies turning countries against the EU and the US, uh we talk a lot about the critical technologies that Wendy Sherman said can be used for very good purposes that can also be used can be weaponized. And that's I think is a very important consideration.
God, you've hit mute. There we go Mute. Now you're fine. Go ahead, OK? I didn't. I didn't touch it any button. I don't know where I was muted. But I talked about the importance of critical technologies that can be used for good but can also be used. And last, but not least. And I think this is what we're always observing. Increasingly, is that Technology and particularly technology platforms can be used to undermine our democracies to drive wedges in our societies through incitement to hatred through kind of terrorism, content, illegal content this information Child sex abuse material, and that's where I kind of I mean, it's been very important that we defend our democracies. We defend also
our economies because that Of course, it is the first prerogative and the first priority for any country in terms of its security policy. So, um You mentioned disinformation or spreading across the Web, and we're going to have a speech later by senior commissioner who is working on that vice president. Your oval later in the day. But particularly, I think in talking about security of networks, infrastructure, things of that sort of, um there's been a lot of discussion and certainly even under the previous administration.
Discussions about the safety of communications technologies. Five g etcetera, the whole Huawei discussion. Um The European Commission has identified China as both a Partner for cooperation, but also a systemic rival.
How do you think China fits into this? When you think about the technologies that we're using today? How is the discussion in Europe about how China relates to this? But I think the short answer to this question is we must not be naive. Maybe we in the European Union has been a little bit naive over the last kind of decades or so in in our Relationship with China and keeping our markets open. I think we're kind of certainly revisiting that policy. I mean, our networks are infrastructure. It underpins essential services it created called facilities in and therefore it's absolutely necessary. That's kind
of the equipment that is used in these infrastructures is is secure and safe, and we work very closely with our member six to ensure that that is The case. This is just not anti China, but it is to ensure that we have infrastructure that we can trust. I mean, in terms of like the Internet policy, uh and this is I think you mentioned at the beginning the importance of trade, But I would also like to mention input values and our fundamental rights. We are Kind of it is very kind of different position from China. I mean, China is using the Internet and its policies in a very authoritarian way to repress people to use technologies in order to track and trace people, whereas aren't Approach towards the Internet, and that's reflected also in in the proposals in the legislation that is being passed now by the European Parliament, and the council is to put the human at the center. It's the technology at the service of the people and to ensure that our values are fundamental rights, freedom of speech, and and I rules and regulations are complied with our respected and respected in India into that, so we have a very different model.
Of governing the Internet and the Chinese have So, um This is One thing I want to make clear to the audience is how, um comprehensive The EU effort has been in this area when the underlying commission came into office in very late 2019. No. You laid out, uh, two big priorities digital transformation in the green deal. Um, at the time. The digital transformation was very much part justified as an essential element of building an economy for the 21st century.
And also as a way of stimulating more innovation in Europe, which has not yet seen the rise of a European, Google or Apple major tech company of that magnitude. Um Can you Say how this came about. And what is behind this? What motivates this one of the things that We hear frequently over here is that it is about sovereignty, tech or digital sovereignty. Rather than security, for example. How do you define that? Has it changed post the invasion of Ukraine.
How do you see the European effort? Where is it coming from? And where is it going? Well, I think First of all, I mean in Europe, and I think many countries around the world are asking themselves the question What kind of Internet do we want? And how can we make sure that the Internet is safe and secure and at the same time that our values and fundamental rights are protected democracy is protected. That's a question that has been asked quite explicitly. In the European Union and has been debated and is therefore at the basis of the actual actions and proposals, particularly for regulations that have been made since the underline The commission took took office. So this is very much like how do we shaped the intimidating is not kind of the Internet and the technology.
We have to adjust. To the technology. Now it is, the technology will have to adjust and serve. The interest of our society is in the interest of our economies. And that has kind of led to a number of conclusions. The For example. How do we build trust? In the Internet. How do we ensure that safe products that we are
not confronted with kind of unsafe products on the marketplace on the Internet? So those kind of proposals that we've made these a D? M. A. How can we make the Internet economy or keep the Internet of calling me contestable that there is good competition and therefore innovation? So that's all behind that has been the subject of a Of an intensive debate in the European Union. How do we make sure that we can trust the technologies? And they're forced to promote the adoption of these technologies in the European Union like a I the other question, And I think you re start to that is how can we make sure that the single market works better? Because if one of the reasons why we don't have, like the big, successful technology platforms that you have in the US Is that it's very difficult to the European Union to scale up is all about economies of scale and network effects. And in the European Union. If you have a fragmented regulatory framework and your say, successful in Germany or in the Netherlands, you want to expand your going to France. You going to Spain? Every time you have to adjust your business mother because the rules are different. It's like a
start up having to start up. 27 times in New York. It slows you down. You are never going to grow to a to a successful company. So we need to have one set of rules for the whole of the European Union. And that's the other motivation behind the proposals, which we are making to make sure that we have one framework and not 27 in New York can unions. The point about sovereignty. Digital struggling T. I mean there's
different kinds of variations of words around. I think the best answer to this is if practical examples I think we've all seen the dependence of microelectronics where through breakdown in supply chain. Some of our very critical industries, like the automotive industry has to respect to suspend production for a number of weeks and other industries in the machinery, for example, as well. That's one example. I mean, another example is that kind of the high performance computing European Union has always been at the top of high performance computing always been in the top five, like the fastest supercomputers in the world.
Couple of years the European Union started ago the European Union started to drop down. We were barely in the top 10 and we had two or three computers in the top 20. We came together we brought home We set up an organization called Euro HBC. Europe performance Computing. Put money there. And last week, for example, there was a new supercomputer
inaugurated in in the north of Finland, not far from the North Pole thirst third fastest supercomputer in the world. Next year. We'll have drawn that might be the fastest supercomputer in the world. The nexus scale computers. Why is this important? Because in most of our industries, where if you design a new car and you airplane you medication If you wanted to serious research on climate change or other kind of depressing challenges, you need access to supercomputing facilities.
The European Union cannot afford to become dependent on the likes of China or others. We should put computer facilities. Those are the kind of Resources which we need in the European Union itself. A. I is yet another example. And I can go on. We don't want to become dependent on artificial intelligence developing countries that do not share our failures in our fundamental rights. And I think, just by
Quoting a number of these examples. I think you can see why strategic autonomy why the European Union League cannot just become a consumer of technologies, but it needs to be a producer of technologies as well. Thanks very much for that. I'm going to turn to the audience after this next question. So either here in the hall, if you would indicate that you have a question, we have microphones that are available and I'll guide them to you. Um and online. I think we are taking questions, both via Zoom.
And, uh, also Twitter. So please send in your questions. Please indicate here in the hall. If you have a question for Mr DeGraff, let me turn to one of the most. If I can put it this way, notorious pieces of
EU legislation, and that is the digital markets Act along with the DSA, the Digital Services Act. It's just now been approved, and we expect final passage very soon. In the parliament. This sets a series of rules of prohibitions for a specific set of companies who are not yet designated. Can you say
what happens next? Um, in terms of the designations, and of course, as you know, there's been a lot of concern here that it will only designate American U. S based companies. As the gatekeepers. Can you say something about what we should expect
over the next few months once this is past? Yeah, it's kind of notorious. I'm not sure whether I mean this is a little bit of a negative connotation. It is certainly a very important piece of regulation, which will have an impact on how markets are organized. It's two markets are
Organized. I mean, it identifies a number of practices, for example, self preferences or tying or not giving access to data that that kind of gatekeepers so very powerful companies. In additional economy have are putting into place, which kind of makes it very difficult. To compete with them, and it makes also very difficult if you're dependent on them to kind of to do your business effectively and henceforth, I mean, once the markets act enters into force, which will be around October November this year, those practices will no longer be Tolerated in the European Union. There is indeed a process of designation. So then the next step is that these companies gatekeepers potential gatekeepers will need to share with us information that will allow us to determine whether or not they meet the criteria that test. To be designated as gatekeepers. And if they do, although we will
not designate companies we will Designates services, which we call core platform services, for example, market places or at stores or social media or operating system, so those will be Designated and, of course, they are part of a particular company. And and then once they are designated the rules start to apply earnestly. I think we're talking here from the middle of Next year who will be in scope? Well, we don't expect too many companies to be in scope. I mean, our estimate is between 10 and 15. And, of course, the question like is this a us only where a an instrument that will only affect US companies that that question has been asked many multiple times, and the answer to this is no Um, because we have clear indications and on the basis of court of analysis that we have done that there will be several European companies also properly some Chinese companies and potentially also companies from other regions that will come Within the scope of the DNA. But of course it's It's logical simply because of the state that the important role that these companies come. The American companies play in the Internet and also the kind
of dominance that the B C, for example, and yet store ship to American companies will will be really endoscope. And for their basis operations in the European Union. They will have to make quite some significant adjustments. No, thanks very much for that. Do we have any questions here in the
hall? Yes. Please identify yourself. Hi. My name is Madeleine. I'm an analyst at the State Department. Can you hear me? Great. Thank you so much for being here. Um I wanted to ask, given that there was such a large push to get the D s a in the D m a past or agreed to in the last few months. I'm wondering if There would be renewed interest in passing bills like the AI act in the Data Act in the next six months or a year.
Or if there is fatigue, and I'm also wondering if Um The upcoming Check Council presidency may have an impact on the outcome of the AI Act and the Data Act. Okay, so just in case you couldn't hear that it could Okay, go ahead. I mean, that means there's a whole package of measures going through the legislative process in the European Union, de Esa and DMA have not crossed the finishing line. I need to be like spill formally. Approved, but that's just political agreement. And I need to be published in the official journal and then they entered to force. But there are indeed a number of other very important legislative initiative, the AI act.
Um, on how you regulate artificial intelligence in our societies, Um, we have that data act. How do we in Europe Can we exploit extract the value of data? You've heard a lot about GDP are And the general data protection regulation how important it is to protect personal data, and we still stand behind it. But I think in the future you will increasingly year from the European Union. How we wouldn't do this to extract value.
From data so from data protection to data used. I think it's going to be a very important theme in European Union where we have the data Act. We have a Cyber Resilience Act, which is in preparation. Millions. Billions of objects will be connected to the Internet. They need to be secured and cannot be become kind of vulnerabilities where certain distributed denial of service attacks are launched.
Through our kind of connected objects. We have also any identity act that we want to European citizens to have an electronic identity with which they can fulfill all kinds of public and private. Premises. I mean, we have other instruments. Also in the planning Well, what's what's going to happen is their fatigue. No, there is not a fatigue. We have a comprehensive program of regulation, which
has been endorsed. By the European Council by the heads of state and government were now implementing it, he these are complicated issues complicated to regulates. I mean, that's a whole kind of debate in the European Parliament in the council on these issues. The Czech presidency has aimed at having a political agreement on the text in the council by the end of the year. It's interesting
that the deputy prime minister, Mr Bartos, who is going to chair all of these meetings, himself, knows a lot about a I and a lot about technology, so we're quite hopeful and confident that progress will be made. The other proposals will also make their way through the regulatory process. So we are confident that say, by the middle of next year latest end of next year, the whole legislative framework all these proposals will be in place. And then, of course, the emphasis shifts
Logically to making sure that they can produce their respects in practice and enforcement with the D s A and D M A. We're already working on this Now. These other proposals, of course, will will also need to be affected be enforced. So full steam ahead on the agenda that's been laid out so far. And
I know that the Czech presidency and uh, has been enthusiastic about the AI act and and seeing that as one of its Ah, one of its goals. So other questions from the hall here. Yes, back in that row. Get a microphone. Put your hand up so you can see Yeah.
Great. Hi. My name is Robert telling Joe I'm coming from Hungary but studying in King's college London and I'm really curious to hear your opinion about regulating social media in the U. I know there is an ongoing debate about it and I know that, for instance, here in the US, it's there are certain opinions to think that the First Amendment should be applied to social media so that the freedom of speech could be applied, so I wouldn't be really curious to hear your opinion.
From a normative perspective, whether it's the role of the U to regulate social media. And whether you see there is a there is a role in EU to to to limit maybe the Chinese influence in terms of social media and video. Do you think? What do you see? There is a need for an EU alternative with regards to social media and whether it's It's the EU or the private sphere that has to step in and make that, um, alternative and I saw someone with their hands up in front here.
Yes. Can we get both questions? Because I want We're getting a little short on time. True. So thankfully, my question is actually quite similar to the previous one. I'm Andrea Kremer, business researcher for the World Wildlife Fund. And my question is pertaining to the normative compatibility
between the American kind of democratic scheme as well as the European Democratic schema because, although we are allies, so to speak, although there are mutually converge and socio political agendas At the same time, the intrusiveness that surveillance of the private enterprise in the United States should not, by any means intervene or sort of supervision legally in the European kind of schema. So the question is how compatible are in the four future? Rather, the political and human rights agendas between the European Union and the United States, Okay? Excellent questions and we can spend hours on these issues. I want to make something clear from the outset as we are not regulating social media and speech. We're not regulating speech through the D s a what We are regulating and this is I think a fundamental difference or fundamental fact is we are taking a systemic approach. I always make the comparison with banks because I think it's useful vote.
What we're looking at is whether these social media platforms have systems in place that allow them to detect prevent And when they detect them, it's on their platforms to mitigate and potentially remove that content. So we are talking about Um, notice an action systems where you and I can kind of communicate. We can tell platforms. We think there is a problem on your platform. We have risk assessment in place where they need to do.
A risk assessment to check whether their systems can be used, for example, for this information or to be used to kind of two for election interference. We have an independent audit where external auditors go in and check the systems. I mean, how many of your staff are involved in content moderation? Is it for some languages only, or is it for other languages as well? So this is the approach we take. We do not regulate. We're not content, police or the Ministry of Truth where we say This is what the platform or a social media platform could kind of, say, Oregon. I can be can carry and this is not, And I think it's a fundamental difference because that's of course, the very, very dangerous if If governments start to decide what what? What can be what our rights are. How can we exercised the freedom of speech? I mean, we have
worked very closely with the US in the TTC on these issues on the DSA and the DNA, and I think, of course with the First Amendment in the US things are A bit more complicated, but I think in essence, we share a lot of the approaches and the values the political situation in the US is what it is. There is no room for like, certainly not the comprehensive type. Approach that we have in the European Union, but I think the approach of Looking at a systemic where your of dealing with the platform is an approach. I think that
has a lot of Sympathy in the U. S. And I think that's kind of what I would like you to retain. We're not into content regulation at all. I mean, nobody's going to decide whether ultimately is to court in the European Union as it should be in a Democratic society built on the rule of law that should decide whether sub content Is illegal or not. So I would just point out as well that one distinction for Americans is that separately from the D s a. There is a definition in Europe of illegal hate speech. Which is about inciting ethnic, racial and other types of hatred.
Um, that has been supported in the courts. Uh, it varies a little bit. For example, in Germany, it's illegal to deny the Holocaust. Things of that nature. And it is that speech that is being regulated under the DSA not Did.
The British have a bill that is looking at online harms, which is much more broadly defined. So those of you who are interested? I mean, this is a fascinating area. Of how do you regulate this? Uh And I think the session with commission vice President Your ova later this afternoon will be really fascinating on this particular thing. Can I do? You mentioned the TTC, the US and EU T Trade and Technology Council as one of the places where you're having discussions with the Americans about this.
Can you tell us what your ambitions are for the TTC? And I'm afraid this is going to have to be our last question. But The GTC has been criticized. I've done some of it for Not being ambitious enough. For the delivery bubbles not being significant enough to make it worth continuing for the ministers who are running it. We just had what I think was a successful meeting in Paris. And we
have another meeting coming up late this year. November, maybe December. Something like that here in the United States. What are your ambitions for the TTC at that next meeting? What should we see? That will make us judge whether it's going to be a success or not. In building US EU cooperation in this crucial area of digital transformation.
The TTC issue. No coverage a lot of ground her there 10 working groups and there is tremendous work going on in areas of expert control and disinformation. I mean, supply chain management, etcetera. Maybe in the area of the D s A and the D m A. We have come out with a Decoration for the future Internet, which in the meantime has been endorsed by 60 countries around the world, because we also believe that if we work together as an EU and the US and we must work together in this in this very volatile world We can actually get more countries to follow our democratic model than to be pulled into the into the sphere of influence of China or Russia, our or turkey, So that's something we've done together. In the area that we are working more quickly. Ordinary. We're trying to be operational. How can we get researchers to access to have access
to platform data? It's really important to be have independent resources. Look on the dude. How can we do these? All this together? What is meaningful information that that platform should report meaningful for us is regulated, meaningful for the public at large, So we're working on very practical ways. Of making these benefits that we are. We are complaining that additional services available also to American Be sure to use an American audience. So thank you very much good. I think that that's a fitting end to
looking forward to the cooperation in the TTC is a fitting end to this discussion. Quite a number of years ago, the Atlantic Council sat down and said, What are the issues where we will cause there will be a lot of us EU conflict if we don't get it right, but opportunities if we get it right if we Get it right. And Digital emerged at the top of that list. It's been a fascinating
area to explore. I hope all of you will keep your eye focused on it. Even if you are really Interested in the more security and defense realm.
Hey, I data these things are all increasingly part of the security defense realm. Thank you very much. Go out the graph for joining us from Brussels. And I think this concludes this particular element, and I know we