In the global fight for tech supremacy, Europe is taking its gloves off.

The EU’s executive arm on Wednesday unveiled a series of proposals laying out the bloc’s approach to data, artificial intelligence and platform regulation over the next five years and beyond.

The flurry of policy initiatives aims to wean Europe off its dependence on foreign-owned tech companies while bolstering the bloc’s own tech sector, with the aim of becoming more competitive against rivals in China and the United States.

Presenting the package, which is made up of three documents, European Commission President Ursula von der Leyen underscored that technology should comply with people’s rights.

“We want the digital transformation to power our economy and we want to find European solutions for the digital age,” she said.

The White Paper on artificial intelligence originates with von der Leyen’s promise to introduce legislation within her first 100 days in office.

The digital plan is a key priority for the current Commission, which came into office late last year in the midst of intensifying tensions over trade and tech security with both Washington and Beijing.

Before starting her term, von der Leyen cited climate and tech policy as being central to her mandate and pledged to come up with legislation on artificial intelligence within her first 100 days in office.

The former German defense minister has had to backtrack on that promise, as none of the documents presented are legally binding. Instead her presentation offered an over-arching roadmap for how the EU intends to develop a single market for digital services, foster access to data and move toward hard rules for AI technology.

In a briefing to reporters ahead of the unveiling, Margrethe Vestager, the bloc’s digital czar, described the digital package as Europe’s second chance at becoming a world leader on tech. She says it can do so by leveraging industrial data for business-to-business applications.

The Commission is deploying its most high-profile officials to present the strategy, which is the first major policy orientation of this term.

As well as Vestager, Vice President for Values and Transparency Věra Jourová, Internal Market Commissioner Thierry Breton and Justice Commissioner Didier Reynders all worked on the strategies and will oversee different aspects of their implementation.

In the coming three months, the Commission will collect feedback from industry, civil society and national governments on its proposals before deciding how to move forward on issues like the use of facial recognition technology. “Everyone will be able to discuss [the package], including non-European companies,” Thierry Breton told reporters ahead of the presentation.

Here’s what you need to know about Europe’s big digital push:

Why are there three documents instead of one?

The answer is a combination of policy and politics, with top EU officials all keen to oversee different aspects of the plan.

“If you have an accident with a self-driving car, who’s responsible? We’ll have to define rules on such issue” — Didier Reynders, Justice Commissioner

The White Paper on artificial intelligence originates with von der Leyen’s promise to introduce legislation within her first 100 days in office. Officials quickly agreed that it would be premature to pass hard laws within that timeframe and instead settled on the idea of releasing a White Paper setting out the path forward.

Thierry Breton, a Frenchman and former CEO of tech company Atos, is behind the second document, which focuses on how the bloc will better exploit data to support innovation and entrepreneurship while also bolstering protections.

Breton convinced von der Leyen that he should be tasked with developing a standalone data strategy at the outset of his Commission term. “We cannot talk about artificial intelligence without talking about data," he told reporters Wednesday.

Finally, in order to link the two papers together into a broader narrative that would expand on other issues including competition rules and the Green Deal, the Commission ordered up a third document entitled “Shaping Europe’s digital future” that aims to act as a 5-year policy roadmap.

Will the EU draft hard law on artificial intelligence?

Yes. Expect follow-up to the White Paper on Artificial Intelligence, including on safety, liability, fundamental rights and data in the last quarter of the year.

Much of the fine print for legislation will depend on feedback the Commission is set to receive in the coming months from industry, civil society and national governments. The EU’s executive arm could decide for example to update the product liability directive, which creates a legal responsibility regime for defective products.

“If you have an accident with a self-driving car, who’s responsible? We’ll have to define rules on such issues,” Reynders told reporters ahead of the White Paper’s release.

At the same time, the Commission argued in its White Paper that high-risk AI technology should undergo rigorous testing before it can be deployed or sold within the EU's vast internal market, pitching the introduction of so-called “conformity assessments” for AI systems that pose significant risks in areas including recruitment, health care, transport and law enforcement.

“So-called high-risk AI — this is AI that potentially interferes with people’s rights — have to be tested and certified before they reach our single market,” von der Leyen said Wednesday.

Will there be a ban on facial recognition?

No, although a ban was never really the Commission’s plan.

The short-lived proposal to impose a moratorium on facial recognition made headlines when it was mentioned in an early draft of the White Paper. But such a moratorium, which had been listed as one out of several potential policy measures, had never seriously been considered by European decision-makers, not least because Brussels has limited means to tell national governments what to do in law enforcement, according to officials involved in drafting the document.

The ambition is to make Europe the go-to place for high-quality industrial data that can be used, for instance, to create AI tools.

“There are already very strict rules [on facial recognition]: There is the GDPR, which allows some exceptions,” Reynders told reporters ahead of the White Paper’s publication. The Commission's White Paper will kick off a debate on which exceptions are acceptable.

The final document now calls for “specific requirements” for “remote biometric identification systems” — a broader term describing technology that analyzes information about your body such as your face or voice, and compares that with stored data to identify individuals. Such biometric systems should adhere to strict transparency requirements as well as tough criteria when it comes to the algorithms underlying them and the data they use to be trained.

How is the EU planning to build a single market for data?

By convincing industrial players to share their data with startups, the public sector or other enterprises that want to use it to develop new applications. The ambition is to make Europe the go-to place for high-quality industrial data that can be used, for instance, to create AI tools.

The first concrete policy deliverable in the data strategy is a framework for “common European data spaces" to be published by the end of 2020. These “spaces” would be designed to encourage companies to pool data, according to a senior EU official. If all goes according to plan, the project could be implemented as early as 2022.

In 2021, the Commission will roll out its new “Data Act,” which will remove barriers and introduce rules for business-to-business and business-to-government (B2G) data sharing, and potentially give people an "enhanced portability right," or the ability to bring their data from one company to another.

While business-to-government data sharing has so far received little attention in the broader digital strategy, it represents a core part of the Commission’s philosophy. Such rules would allow the public sector to tap into the wealth of data from private companies to benefit society. The Commission plans to create a legal foundation for a data market that already exists — for example when private companies share their data to improve disaster relief or traffic congestion in major cities.

“The European Union will be the first jurisdiction in the world to provide a framework that will try to stimulate and incentivize privately held data to be shared and reused for the public interest,” said Alberto Alemanno, the B2G data sharing expert group’s rapporteur.

An idea that was adopted from the expert group into the the Commission’s final data strategy is the creation of “data stewards,” meaning people who would be in charge of facilitating and coordinating data sharing.

What sectors will be affected?

While the digital strategy is nominally tech-focused, it will have a major impact on agriculture, energy, health, financial services and transport. The Commission’s vision for “data spaces” refers to large pools of data that can be shared per sector. How data gets shared will vary by sector.

In the health sector, for example, public health authorities could be compelled to share patient data in European “health data spaces.” The pooled data would be made accessible to researchers who could use it to develop new treatments for diseases, while also helping to check the impact of treatments on patients across the Continent.

Firm proposals on platform regulation will only be known toward the end of the year.

With electronic health monitors like smart watches becoming more commonplace, insurers will also be paying close attention. Data culled from such applications could also be pooled and used for large-scale studies or health programs.

In the financial sector, asset managers and bankers will be scouring the Commission’s plans for any move to force financial firms to create digital portals that provide client data to fintech companies.

When it comes to AI, the Commission believes that particularly strict rules should apply to “high-risk” sectors such as health care, transport or public administrations — for instance when doctors use an AI system to help them diagnose cancer and make potential life-or-death decisions.

Will the Commission further regulate platforms such as Google and Facebook?

Firm proposals on platform regulation will only be known toward the end of the year, when the Commission unveils its so-called Digital Services Act package.

But the digital strategy, which binds the proposals together, does refer to so-called “gatekeeper” platforms as needing to remain “fair” — a category that could include Google and Amazon. Some rules may apply to the big platforms "without consideration of illegal behavior, but just because they’re a dominant player in the digital world," Vestager told reporters.

“The Commission will further explore … ex ante rules to ensure that markets characterised by large platforms with significant network effects acting as gate-keepers, remain fair and contestable for innovators, businesses, and new market entrants,” reads the digital strategy.

Under the previous Commission, Brussels launched a formal probe into U.S. e-commerce giant Amazon over its "dual role" as a marketplace and seller of products.

Later this year, the Commission will launch a sector inquiry focusing on “new and emerging markets that are shaping our economy and society.”

Also to be expected is legislation setting rules on how platforms such as Google, Facebook and Twitter police content online. Whether platforms will be held legally responsible for the illegal material they host remains an open question, Vestager and Breton said. A public consultation will be launched in March.

Earlier this week, proposals on content moderation made by Facebook CEO Mark Zuckerberg got a cold reception from the Commission.

Data centers have an impact on how the electricity market works and could boost renewable energies if they decide to use clean electricity.

On disinformation, the Commission plans a European Democracy Action Plan to ensure election integrity.

How will the digital strategy work with the Green Deal?

The Commission wants the bloc to become carbon neutral by 2050 under the Green Deal, which means the tech sector will be forced to reduce its carbon footprint. According to the Commission, the ICT sector accounts for more than 2 percent of global greenhouse emissions.

To reconcile Europe’s climate objectives with its tech ambitions, Brussels will push for data centers to become carbon neutral by 2030.

“We need to press certain sectors where they can be better — one of those is data centers, which are major power consumers,” a senior Commission official said.

In Ireland, home to U.S. tech giants such as Google and Facebook, electricity demand is expected to increase by 50 percent by 2030 — 30 percent of that rise is due to the country’s data centers.

Data centers have an impact on how the electricity market works and could boost renewable energies if they decide to use clean electricity, the Commission official said. Another “positive contribution” could be the reuse of the heat generated by the servers, he added.

In 2021, the Commission is also planning to float a “circular electronics initiative” to make devices such as smartphones last longer while being easier to repair and recycle.

What about the €€€?

One of the main challenges is where to find the money to bridge the investment gap that the Commission estimates at €65 billion per year.

“Every time we promise something, there is a caveat, as it’s subject to the final decision of the Multi-Annual Financial Framework,” said a senior Commission official, referring to the long-term budget of the EU currently under discussion by national governments.

The Commission wants to invest up to €6 billion to create the infrastructure for a single market for data. About €2 billion would come from the Commission itself, while the rest would be raised from member countries and industry.

The Commission’s proposal for the total EU budget for the next seven years is about €1.135 trillion. Only around 3 percent of that is devoted to tech, according to tech lobby DigitalEurope, which urges capitals to raise the share devoted to the digital transformation to 10 percent.

However, the final budget relies on unanimous agreement from all 27 EU countries. The European Council President Charles Michel has suggested a total budget of €1.095 trillion to member countries.

A special summit of heads of states and governments will take place later this week to talk about how much money is spent.

“[Digital] is a priority for us,” said the senior Commission official. “Let’s hope it’s also a priority for the member states.”

Bjarke Smith-Meyer, Simon Van Dorpe and Carmen Paun contributed to this report.

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