Europe fit for the digital age - a preview of how the EU might regulate AI and Big Data

On 19 February 2020, the European Commission ("Commission") published a Communication on shaping Europe's digital future ("Digital Future Communication") together with a Communication on a European data strategy ("Data Strategy"), which contain a number of statements relating to EU competition policy. It also published a White Paper on Artificial Intelligence ("AI White Paper"), which is open for consultation until 20 May 2020.  These initiatives form part of the Commission's work to create a "Europe fit for the digital age". 

Digital Future Communication

What: This Communication sets out the Commission's vision for a European digital future, and how it aims to achieve it.  The Commission's visions and goals for the digital economy include the following:

• Society powered by digital solutions: To create a European society powered by digital solutions that are "strongly rooted in our common values, and that enrich the lives of all of us".
• Framework to encourage growth and innovation: Providing businesses with a legal and policy framework that will allow them to "start up, scale up, pool and use data, to innovate and compete or cooperate on fair terms".
• Independent European infrastructure: Ensuring the integrity and resilience of European data infrastructure, networks and communications. This requires reducing European dependency on crucial technologies from the rest of the world by "creating the right conditions for Europe to develop and deploy its own key capacities".
• Empowering citizens through data sharing: Empowering European citizens to make better decisions based on insights gleaned from nonpersonal data. The Commission states that data should be available to all (public or private, big or small, start-up or "giant").

How: To achieve these aims, the Commission aims to focus on the following key objectives over the next five years:

• Technology that works for people: Development, deployment and uptake of technology that makes a real difference to people's daily lives.
• A fair and competitive economy: Developing a "frictionless single market" for the digital economy across sectors, respecting consumer rights.
• An open, democratic and sustainable society: Building a trustworthy environment in which "citizens are empowered in how they act and interact, and of the data they provide".

The Digital Future Communication also sets out the role of competition policy in achieving some of these aims, in particular, in relation to developing a "fair and competitive economy".  For example:

• A single market for data: The creation of a European single market for data, ensuring a "level playing field" for businesses of all sizes, and that rules applying offline (such as the competition rules) should also apply online.
• Platforms and ex ante rules: In relation to online platforms, ensuring that the systemic role of certain online platforms and the market power they acquire do not negatively impact the "fairness and openness" of European markets. This includes exploration of ex ante rules to ensure markets characterised by large platforms with significant network effects remain "fair and contestable".
• Rules "fit for purpose": Continuing the Commission's work on assessing the extent to which the EU competition rules are "fit for purpose" in the digital age. For example, continuing work in relation to assessing the effectiveness of antitrust remedies, conducting a review of the rules themselves, the ongoing review of rules governing horizontal and vertical agreements, the market definition notice, and various state aid guidelines.
• A 2020 sector inquiry: The Commission is also planning to launch a sector inquiry during 2020 with a strong focus on these new and emerging markets.
• Platform economy rules: Considering additional rules in relation to the platform economy to ensure contestability, fairness and innovation and the possibility of market entry, as well as public interests that go beyond competition or economic considerations.

The Data Strategy

What: The Data Strategy sets out the Commission's strategy for policy measures and investments over the next five years to enable the data economy– to create a "true European data space" with a single market for data, and to unlock unused data, allowing it to flow freely within the EU and across sectors for the benefit of businesses, researchers and public administrations. 

How: To achieve these aims, the Commission proposes to do the following:

• Regulatory framework: establish a regulatory framework regarding data governance, access and reuse. This entails creating incentives for data sharing, establishing practical, fair and clear rules on data access and use, which comply with European values and rights such as personal data protection, consumer protection and the competition rules. It also means making public sector data more widely available.
• Systems and infrastructure: support the development of technological systems and next generation infrastructures; and
• Sectoral specific actions: launch sectoral specific actions to build European data spaces in, for example, industrial manufacturing, environmental sustainability, mobility, and health.

In terms of regulatory and policy framework considerations, the Commission notes the following in relation to competition policy in particular:

• Guidance: The Commission will provide more guidance to stakeholders on the compliance of data sharing and pooling arrangements with EU competition law by means of an update to the Horizontal Co-operation Guidelines. If needed, it is also prepared to provide "additional individual project-related guidance" on the compatibility of arrangements with the EU competition rules.
• Merger control: When exercising its merger control powers, it will look closely at the possible effects on competition of large-scale data accumulation through acquisitions and at the utility of data-access or data-sharing remedies to resolve any concerns.
• State aid: The Commission will examine the relationship between public support for undertakings (for example for digital transformation) and the minimisation of competitive distortions through data-sharing requirements for beneficiaries as part of its ongoing review of a number of state aid guidelines.
• Ex ante regulation: The Commission will consider ex ante regulation as part of its review of how best to address systemic issues relating to platforms and data, to ensure that markets stay open and fair.

AI White Paper

What: The paper sets out the Commission's vision to build a framework to enable the "trustworthy and secure" development of AI in Europe. The main building blocks involve the creation of:

• An "Ecosystem of excellence", through the adoption of measures to align efforts at European, national and regional level; and
• An "Ecosystem of trust", by ensuring compliance with EU rules, including the rules protecting fundamental rights and consumers’ rights, in particular for AI systems operated in the EU that pose a high risk.

How: In relation to building an "ecosystem of excellence", the AI White Paper sets out the following 6-point Action Plan:

• Working with Member States: The Commission, taking into account the results of the public consultation on the White Paper, will propose to Member States a revision of the Coordinated Plan to be adopted by end 2020.
• Focusing the efforts of the research and innovation community: The Commission will facilitate the creation of "excellence and testing centres" that can combine European, national and private investments, possibly including a new legal instrument.
• Skills: Establish and support networks of leading universities and higher education institutes to attract the best academics and experts and offer world-leading masters programmes in AI.
• Focus on SMEs: Working with Member States to ensure that at least one digital innovation hub per Member State has a high degree of specialisation on AI. 
• Partnership with the private sector: Set up a new public private partnership in AI, data and robotics to combine efforts, ensure coordination of research and innovation in AI, collaborate with other public-private partnerships in Horizon Europe and work together with the testing facilities and the Digital Innovation Hubs mentioned above.
• Promoting the adoption of AI by the public sector: Initiate open and transparent sector dialogues giving priority to healthcare, rural administrations and public service operators in order to present an action plan to facilitate development, experimentation and adoption. The sector dialogues will be used to prepare a specific ‘Adopt AI programme’ that will support public procurement of AI systems, and help to transform public procurement processes themselves.

As part of building an "ecosystem of trust", legislative reforms are being considered, including consideration of the following issues:

• Effective application and enforcement of existing EU and national legislation
• Limitations of scope of existing EU legislation
• The changing functionality of AI systems
• Uncertainty regarding the allocation of responsibilities between different economic operators
• Changes to the concept of safety
• The types of mandatory legal requirements to be imposed on the relevant actors
• The addressees of the legal requirements

For high-risk cases, such as in health, policing, or transport, AI systems should be "transparent, traceable and guarantee human oversight". The Commission states that authorities should be able to test and certify the data used by algorithms.

For lower risk AI applications, the Commission envisages a voluntary labelling scheme if they apply higher standards.