EU Commission says European tech development too slow

EU’s tech development is too slow! It is not on track to achieve the digital objectives and targets for 2030 set in the Digital Policy Programme (DDPP), according to EU Commission analyses. Additional European investments are needed especially for digital skills, high-quality connectivity, uptake of AI, semiconductor production and start-up ecosystems. Parallel to this, the Commission is using new tools to control American big tech companies.

Recent developments indicate how the Commission plans to use the new Digital Markets and Services Acts to control big tech companies. The European control of big tech is in the US often criticized for limiting tech development in a negative way. US lobbyists want revision of the EU rules and say they should be less focused on American companies. 

Of the first six big tech companies that the Commission said they must live of to the rules in the Acts, five are American: Alphabet, Amazon, Apple, Meta and Microsoft plus Chinese ByteDance owner of TikTok.

“Adopting and developing innovative technologies is crucial for Europe’s competitiveness, particularly in the current geopolitical landscape and due to increasing cybersecurity threats, demanding enhanced resilience and robust security measures”, the Commission says in its analysis.

It shows that the collective efforts of member states will fall short of the EU’s level of ambition. 

The Commission executive vice-president, Margrethe Vestager, says the analysis “clearly shows that we are not on track to reach our targets on the digital transformation in Europe. But it also indicates a clear way forward: we need additional investments in digital skills, high-quality connectivity, and uptake of Artificial Intelligence”.

From the Commission’s report:

• Fibre networks, critical for delivering gigabit connectivity and take-up of AI, cloud, and the Internet of Things (IoT), only reach 64% of households. 
• High-quality 5G networks today only reach 50% of the EU’s territory and their performance is still insufficient to deliver advanced 5G services. 
• In 2023, the uptake of AI, cloud and/or big data by European companies was well below the target of 75%. Under current trends, only 64% of businesses will use cloud, 50% big data and only 17% AI by 2030. 
• Only 55.6% of the EU population have at least basic digital skills.
• According to the current trend, the number of ICT specialists in the EU will be around 12 million in 2030, with a persisting gender imbalance. To reach the targets, member states should follow a multi-faceted approach to foster digital skills at all levels of education, and incentivise young people, particularly girls, to take interest in Science, Technology, Engineering, and Mathematic (STEM) disciplines.

The Commission says that member states are progressing towards the target of making all key public services and electronic health records accessible to citizens and businesses online, as well as providing them with a secure electronic identification (eID). 

“Despite uneven take-up across member states, eID is currently available to 93% of the EU population and the  EU Digital Identity Wallet is expected to incentivise its use. However, in a business-as-usual scenario, achieving 100% of digital public services for citizens and business by 2030 remains challenging.”

Member states will before 2 December have to review and adjust their national roadmaps to align with the ambition of the Digital Decade Policy Programme. 

CONTROLLING BIG TECH 

The EU’s Digital Services (DSA) and Digital Markets Acts (DMA) have formally been in force since last autumn but a step-by-step implementation means that it is from now that stricter rules for big tech are in place.  They are meant as tools to control big tech to secure fair competition,

“With the DSA, the time of big online platforms behaving like they are “too big to care” is coming to an end, EU Commissioner Thierry Breton said. 

Markets have been waiting to see if that really is true and how the implementation of stricter rules for big tech will work. 

During the first half of 2024, the Commissions has, with reference to the Acts, taken several actions against big tech companies. Most recently, it added Meta Platforms to the list of companies that it thinks are not complying with the new Digital Markets Act. 

TARGETED ADVERTISING

In Europe, Meta is giving users the choice of either paying a subscription fee for Facebook and Instagram or paying nothing but agreeing to the use of their personal data in targeted advertising.

The Commission objects saying anyone who says no to targeted ads should have the option of an “equivalent” version with less-personalized ads. 

Apple recently said it would delay rolling out its new artificial intelligence–powered software features to Europe because of concerns about the impact of Digital Markets Act.

Commenting on these cases, US-based tech news service, The Information’s columnist Martin Peers, wrote that “when it comes to the role of regulation, the industry and regulators are not even reading from the same book, let alone the same page”.

The Commission is also taking a number of other investigatory steps to gather facts checking if big tech companies live up to the rules on DMA and DSA.: It says it intends to conclude the proceedings opened within 12 months. 

In case of an infringement, the Commission can impose fines up to 10% of the company’s total worldwide turnover. Such fines can go up to 20% in case of repeated infringement. 

In case of systematic infringements, the Commission can force a big tech company to sell a business or parts of it, or banning it from acquisitions of additional services related to the systemic non-compliance. 

Researchers have warned that the EU is leaving too much control and development of AI is in the hands of the US. In an effort to counter that criticism, the EU commission announced that it is  stepping up its support to European start-ups and small and medium enterprises to “develop trustworthy artificial intelligence that respects EU values and rules.”

An open letter coordinated by the German non-profit research group Laion (Large-scale AI Open Network) says that Europe cannot afford to lose AI sovereignty.

Eliminating open-source R&D will leave the European scientific community and economy critically dependent on a handful of foreign and proprietary firms for essential AI infrastructure.

The EU commission has announced it is stepping up support to European start-ups and small and medium enterprises (SMEs) so they can develop trustworthy artificial intelligence (AI) that respects EU values and rules.

“The new AI package includes a broad range of measures to support these start-ups and innovation, along with a proposal to provide privileged access to supercomputers to AI start-ups and the broader innovation community.”

Other measures include:

• setting up AI Factories and making sure AI supercomputer infrastructure available for start-ups can be purchased and upgraded
• a decision to establish an AI Office in the Commission which can develop and coordinate AI policy at European level and supervise the implementation and enforcement of the AI Act
• an EU AI Start-Up and Innovation Communication which outlines key activities such as financial and equity support, Common European Data Spaces and other initiatives.
• The establishment of two European Digital Infrastructure Consortiums, together with several Member States. The Commission says these groups will develop common European infrastructure in language technologies and state-of-the-art AI-tools to help cities optimise processes, from traffic to waste management.