Why the EU leads in digital regulation, but lags in digital innovation

It is often forgotten that, even though Facebook is a US-based company, its largest market is not the United States. The site has more users in the European Union. That is why the EU has been able to force its regulations on Facebook and other companies like it.

The power of the EU’s regulatory might in the digital sphere has been proven through the new General Data Protection Regulation (GDPR) provisions, which companies across the world have adopted. Because of the EU’s size, and because of inaction in the United States, Brussels has become the world’s digital regulator.

But Andrus Ansip, who was until recently the EU’s digital Commissioner and is now a member of the European Parliament, says the EU ended up in this position by accident.

“In the EU we weren’t trying to regulate everything, during these last five years we were aiming to deregulate, to harmonise 28 sets of rules into one,” he said at an event last week in Brussels.

“We weren’t trying to set global standards, even when talking about GDPR, but somehow it happened so,” he added. “In the United States they don’t have federal data protection rules, the only available set was our GDPR.

And we’re of course happy that our GDPR became a global standard. Ask those global service providers, they are really happy that now those rules are harmonized across the world”.

Ansip made his comments at the recent Euractiv event ‘Smart and Open Europe’, supported by the Confederation of Finnish Industries and the Technology Industries of Finland.

The event brought together stakeholders from the political, business and civil society worlds – while many complain that while the EU has been busy regulating, it hasn’t been innovating.

“Europe has been quite heavy on privacy and integrity, which we value very highly, but that needs to stand in relation to innovation capabilities,” said Christian Guttmann, head of artificial intelligence and data science at the Tieto Corporation. “From my point of view, and that of many in the industry, we need to speed that up.”