Digital technology in Europe: regulation is no longer enough, we need to find new ways to be innovative

“Stop con­sum­ing Amer­i­can prod­ucts!” This rather blunt slo­gan seems to have been mak­ing the rounds fol­low­ing Don­ald Trump’s announce­ment of cus­toms tar­iffs of 20% on imports from Europe. The mar­kets react­ed sharply and pro­duc­ers on the Euro­pean con­ti­nent were con­cerned. The Euro­pean Union was quick to respond, bank­ing on nego­ti­a­tions that it believed were still possible.

Although the sit­u­a­tion has been on hold for a few months, it has nev­er­the­less high­light­ed a cer­tain trade imbal­ance between the two his­toric allies. Amer­i­cans buy far more Euro­pean prod­ucts than Euro­peans buy Amer­i­can prod­ucts, with a trade sur­plus of $227bn¹. Coca-Cola and McDonald’s, for exam­ple, Amer­i­can icons, have most of their pro­duc­tion in Europe. This makes it dif­fi­cult for the Unit­ed States to retal­i­ate with cus­toms tar­iffs in the negotiations.

Our depen­dence on the Amer­i­can mar­ket is more sub­tle, nes­tled in the intan­gi­ble realm of dig­i­tal tech­nol­o­gy. Now that we have seen how deeply root­ed this depen­dence has become, to the point where it influ­ences our inter­nal poli­cies, Valérie Peu­geot, an affil­i­ate pro­fes­sor at Sci­ences Po Paris whose work focus­es on dig­i­tal com­mons, offers some insights on how we might break free from this qua­si-monop­oly. “In the dig­i­tal sphere, we have left the field open to the Unit­ed States, which has made sig­nif­i­cant invest­ments in strate­gic tech­no­log­i­cal choic­es,” she explains. “This has been the case since the begin­ning of the Inter­net, as demon­strat­ed by the lit­tle-known sto­ry of Louis Pouzin².”

The dig­i­tal econ­o­my has fol­lowed a some­what unusu­al tra­jec­to­ry, ini­tial­ly arous­ing the mis­trust of investors. Ama­zon is a good exam­ple of this, with years of finan­cial loss­es that ulti­mate­ly led to the emer­gence of one of the most pow­er­ful com­pa­nies in the world. This growth mod­el does not aim for imme­di­ate prof­itabil­i­ty but is rather based on the “win­ner takes all” prin­ci­ple, which allows for long-term dom­i­nance. This could explain the reluc­tance of Euro­pean pub­lic author­i­ties to get involved: “In the dig­i­tal sec­tor, unlike what has been done with com­pa­nies such as Air­bus, there has been a lack of indus­tri­al pol­i­cy on Europe’s part,” says Valérie Peu­geot. “Even though the Unit­ed States has his­tor­i­cal­ly been con­sid­ered the cham­pi­on of eco­nom­ic lib­er­al­ism, in real­i­ty there has always been mas­sive pub­lic invest­ment in dig­i­tal tech­nol­o­gy. Behind the Inter­net, for exam­ple, there was DARPA³ and its £25 mil­lion invest­ment in ARPANET from 1966 to 1975 – the fore­run­ner of the web.”

All this leads to the wide­spread and wide­ly refut­ed idea that the Unit­ed States finances inno­va­tion while the Euro­pean Union reg­u­lates. “On the one hand, Europe also invests heav­i­ly in research through its frame­work pro­grammes. Fur­ther­more, all the Euro­pean reg­u­la­tions adopt­ed recent­ly, such as the AI Act (reg­u­la­tion of arti­fi­cial intel­li­gence), the DGA (reg­u­la­tion on data gov­er­nance), the DMA (Dig­i­tal Mar­kets Act) and the DSA (Dig­i­tal Ser­vices Act) cer­tain­ly illus­trate a Euro­pean desire to reg­u­late this mar­ket, in par­tic­u­lar to resist its ten­den­cy towards monop­o­lies, while help­ing to cre­ate legal cer­tain­ty. Because the law is also a fac­tor in busi­ness security.”

It seems that Europe has tak­en too long to recog­nise its “ultra-depen­dence” on Amer­i­can dig­i­tal tech­nol­o­gy. The exam­ple used by Valérie Peu­geot to sup­port this view is the Health Data Hub, whose mis­sion is to col­lect patient health data and make it avail­able for med­ical research, while ensur­ing its secu­ri­ty and pro­tect­ing indi­vid­u­als’ pri­va­cy. “This pub­lic health data ser­vice was pre­sent­ed to the CNIL in 2019–2020. There was imme­di­ate talk of using Microsoft’s Azure solu­tion, which prompt­ed a strong reac­tion from the Com­mis­sion: how could such sen­si­tive data be entrust­ed to a play­er sub­ject to US law?” recalls the researcher. “How­ev­er, leav­ing aside the issue of pri­va­cy, the ques­tion of indus­tri­al pol­i­cy remains: why did the gov­ern­ment, at the out­set of this ambi­tious project, not choose to allo­cate this pub­lic mon­ey to a Euro­pean solu­tion, which would cer­tain­ly have been less pow­er­ful than Microsoft’s, but would have made it pos­si­ble to grad­u­al­ly reduce this gap? Pub­lic pro­cure­ment as a lever for strate­gic auton­o­my has been underused.”

All the mon­ey invest­ed in a US com­pa­ny could have been invest­ed in a Euro­pean player.

Although Valérie Peu­geot still seems to feel bit­ter about the government’s ini­tial choice, she can only wel­come the SREN law, adopt­ed in 2024, stip­u­lat­ing that French cit­i­zens’ health data must be host­ed on a sov­er­eign Euro­pean cloud. “With this law, the Health Data Hub has decid­ed, five years lat­er, to seek Euro­pean solu­tions,” she explains. “Unfor­tu­nate­ly, this also means that time has been wast­ed. All the mon­ey invest­ed in a US com­pa­ny could have been invest­ed in a Euro­pean play­er. This loss of time has only served to widen the gap in this area, with GAFAM gen­er­at­ing rev­enues that allow them to con­tin­ue to widen the qual­i­ty gap, trap­ping us in a vicious cir­cle.” Today, the Health Data Hub will have to find a tran­si­tion­al solu­tion to begin migrat­ing to a Euro­pean player.

So how can we break out of this vicious cir­cle? How can we make up for the con­sid­er­able ground that Europe has grad­u­al­ly lost? For the lec­tur­er and researcher, the solu­tion could lie in a bold but fun­da­men­tal choice: adopt­ing a com­plete­ly dif­fer­ent par­a­digm, that of dig­i­tal com­mons. “Today, there are three ways of man­ag­ing a resource,” she argues. There is pri­vate prop­er­ty, pub­lic prop­er­ty and com­mons, which are nei­ther pri­vate nor pub­lic and organ­ise usage rights around the resource. Com­mons are still fair­ly mar­gin­al in our cur­rent soci­eties.” How­ev­er, this con­cept is not new. Com­mons were a way of man­ag­ing land, forests, wells, wash hous­es and even bread ovens that was extreme­ly wide­spread until the indus­tri­al rev­o­lu­tion. With­out com­plete­ly elim­i­nat­ing pri­vate prop­er­ty rights, there was a sep­a­ra­tion between land own­er­ship and usage rights: peas­ants, espe­cial­ly the poor­est, had the right to gath­er wood, glean crops and graze their ani­mals on land belong­ing to the king or the nobility.

“This com­mu­ni­ty man­age­ment by vil­lagers even­tu­al­ly dis­ap­peared under the influ­ence of var­i­ous lib­er­al thinkers from the 18^th Cen­tu­ry onwards, such as John Locke, Thomas Hobbes and Adam Smith,” explains Valérie Peu­geot. “These thinkers pro­mot­ed the idea that prop­er­ty is a pre­req­ui­site for a thriv­ing econ­o­my and soci­ety. This, cou­pled with the indus­tri­al rev­o­lu­tion, led to the pri­vati­sa­tion of land that had pre­vi­ous­ly been man­aged as com­mons, known as enclo­sures.” But com­mons are back in vogue, dri­ven in part by dig­i­tal tech­nolo­gies, which facil­i­tate the shared man­age­ment of dema­te­ri­alised resources and the for­ma­tion of de-ter­ri­to­ri­alised com­mu­ni­ties. The best-known exam­ple of a dig­i­tal com­mons is, of course, Wikipedia, but we could also men­tion Open­StreetMap, free soft­ware such as Nextcloud (a Ger­man alter­na­tive to Google Dri­ve, Drop­box and iCloud), Peer­Tube (a French alter­na­tive to YouTube) and Mastodon (a Ger­man alter­na­tive to X), etc. “At the very heart of the Inter­net and the Web lies the com­mons. The pro­to­cols of these infra­struc­tures (TCP/IP, HTTP, HTML, CSS, etc.) are open and non-pro­pri­etary. This is what made the rapid explo­sion of the web pos­si­ble in just a few years, she says. Any­one, any­where, could cre­ate a web­site with­out pay­ing a licence fee to anyone!”

Final­ly, they are a way of trans­form­ing the pub­lic ser­vice, mov­ing from a top-down approach to a dynam­ic of co-pro­duc­tion with users.

In France, the pub­lic sec­tor is increas­ing­ly tak­ing an inter­est in dig­i­tal com­mons. The DINUM (Inter­min­is­te­r­i­al Dig­i­tal Direc­torate) has an “open source and dig­i­tal com­mons” depart­ment; the Depart­ment of Nation­al Edu­ca­tion has opened a “dig­i­tal com­mons for edu­ca­tion” so that the teach­ing com­mu­ni­ty can share teach­ing tools and con­tent; and the ADEME is launch­ing its third “call for com­mons” to encour­age region­al resilience; the IGN sup­ports geo­com­mons, such as Panora­max (a French alter­na­tive to Google Street View), not to men­tion ini­tia­tives by local author­i­ties. “There are sev­er­al rea­sons why pub­lic author­i­ties are inter­est­ed in what are known as pub­lic-com­mons part­ner­ships (PCPs),” insists Valérie Peu­geot. “Com­mons are first and fore­most a way of gain­ing strate­gic auton­o­my and no longer hav­ing to depend on non-Euro­pean sup­pli­ers. They are also a way of ben­e­fit­ing from the col­lec­tive intel­li­gence of those who con­tribute to these com­mons, which are a source of inno­va­tion that is close­ly aligned with col­lec­tive needs. Final­ly, they are a way of trans­form­ing the very cul­ture of pub­lic ser­vice, mov­ing from a top-down approach to a dynam­ic of co-pro­duc­tion with users.”

“Com­mons there­fore rep­re­sent a form of resis­tance to infor­ma­tion cap­i­tal­ism, which is char­ac­terised by an accu­mu­la­tion and con­cen­tra­tion of cap­i­tal unprece­dent­ed in indus­tri­al his­to­ry and, more recent­ly, by an intru­sion into the polit­i­cal are­na,” she con­cludes. These alter­na­tives there­fore show that anoth­er par­a­digm is pos­si­ble: that of bot­tom-up inno­va­tion sup­port­ed by pub­lic author­i­ties, gov­erned col­lec­tive­ly, and capa­ble of grad­u­al­ly reduc­ing the gap with the dig­i­tal giants with­out imi­tat­ing them.

Pablo Andres