Internet service providers, clouds, operating systems and online platforms are all digital services that have become indispensable. The vast majority of these services are offered by American players who have acquired a virtual monopoly on the digital market
In our "Digital Resilience" thematic dossier, we offer you 6 articles to define the framework of our Digital Resilience as well as its challenges and components.This is the last article in our Digital Resilience dossier, dedicated to the resilience of our digital networks. the presentation of the six key challenges of Digital Resilience.
Technological advances over the last few decades have led to a proliferation of online services and an increase in the volume of data available. Internet service providers, clouds, operating systems and online platforms (search engines, marketplaces, social networks, etc.) are all digital services that have become indispensable. The vast majority are offered by American players - the most powerful of which are known as GAFAM - who have acquired a virtual monopoly on the digital market.
European regulations to protect user data
In response to the growing power of these foreign players, the European Union has launched a regulatory initiative aimed at limiting abuse and protecting user data.
- The Digital Markets Act (DMA), for example, aims to combat the anti-competitive practices of digital giants and stimulate innovation to encourage the emergence of small and medium-sized businesses and European start-ups. The DMA will oblige companies to make the basic functionalities of their services, notably messaging (Messenger, Whatsapp...), interoperable with their competitors.
- Visit Digital Services Act (DSA) aims to make illegal online what is illegal offline. It will require platforms to be more transparent about their moderation policies and the way their algorithms work. Failure to comply with these two regulations will be punishable by penalties ranging from 6 to 10% of a company's total sales.
- The General Data Protection Regulation (RGPD) strengthens the rights of individuals to their personal data and defines a legal framework for the collection and use of this data.
- Finally, the Digital Operational Resilience Act (DORA) aims to strengthen digital operational resilience in the financial sector.
The risks associated with these European regulations
The EU's firm commitment to digital regulation in Europe comes with certain risks.
- First of all, the European Union could encounter difficulties in enforcing its regulations. The American giants could then continue to operate with their own standards and maintain their anti-competitive practices, bypassing or ignoring European regulations with impunity. As a result, it would be difficult for European players to emerge, and the draft regulation would be a failure.
- On the other hand, the American giants could comply with the new European regulations, but at the risk of losing quality of service and security for users. Indeed, regulations could force companies to deteriorate their algorithms to make them more transparent and less powerful, or to alter data confidentiality to ensure interoperability.
- Last but not least, American online intermediaries could become overly cautious in the face of overly restrictive European rules that would be detrimental to their sales. They would then decide to withdraw completely from the European market, thus depriving European users of digital services of a quality currently unrivalled in Europe.
Actions at European level can encourage the emergence and development of independent players by strengthening the tools limiting abuses of dominant positions.
National actions require a careful balance to avoid crowding out and contributing to the already high fragmentation of the European market.
- Actions at European level have the advantage of being able to shape a more fluid market. By aligning customer requirements through the development of benchmarks and regulations, which make it compulsory to develop localized, resilient offers to tackle the European market, and which could be extended to other sectors.
- Actions at European level can encourage the emergence and development of independent players by strengthening the tools limiting abuses of dominant positions and raising the bar on interoperability and reversibility.
We can expect resistance from market leaders, for whom vertical and horizontal integration, network effects and lock-in are an integral part of their solutions and business model. Europe can also support the development of European -scale financing markets (IPOs, VCs) to enable its champions to grow while remaining on its soil, and encourage the proliferation and emergence of research talent through "Fast Grant" type schemes.
All articles in the "Digital resilience" section
Digital resilience: Cloud, data and AI
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Digital resilience: training and retaining digital talent
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Digital resilience: Web3, the future of the Internet
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Digital resilience: cybersecurity and supply
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Digital resilience: definition, key components and challenges
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