The market economy needs new rules

Digital sovereignty – this is how the EU intends to maintain its innovation and competitiveness in the future. This is because technological know-how and economic power are increasingly concentrated in the hands of a few, large online giants from Asia and the USA, giants which (can) dominate the market as gatekeepers.

Whether it’s Alphabet, Amazon, Facebook, Alibaba, Tencent or Samsung, the imbalance in the global platform economy is obvious and steadily increasing, and leading to shifts in wealth. But this isn’t the only problem; ultimately, it’s also about upholding democratic values and our security.

Data is the core of value creation in the digital economy and at the same time a strategic production and competitive factor. By using it wisely, many sectors of the economy can become more efficient, sustainable and flexible. In addition, new, sometimes disruptive business models and service offerings regularly emerge based on data.

The challenge, especially for the EU, is that many large technology companies do not always comply with European rules and fundamental values when collecting and analysing data. But also where hate and incitement on social media are concerned, it becomes clear that using data for the benefit of society’s well-being is a delicate balancing act.

Digital sovereignty of the EU

With digital sovereignty, the EU not only wants to catch up in the global race for technological leadership, but also ensure up-to-date consumer protection. Here is an overview of some important projects that touch on infrastructure, data, and decision sovereignty:

  • Gaia-X: Right now, large American tech companies provide the IT infrastructure for many European companies. This means that their data is stored in the cloud and thus on servers that they do not control. In the digital age, this lack of data sovereignty is increasingly becoming a strategic matter. The European answer is called Gaia-X – a project that aims to establish a high-performance, competitive, secure and trustworthy data infrastructure for Europe.


  • At the end of 2021, the European Parliament set out its position on curbing the market power of online giants such as Google and Amazon in the Digital Markets Act (DMA). For the largest digital groups, this act would impose stricter requirements to prevent abuse of their market power. However, it remains to be seen how the new rules will be enforced, as this will require evidence that is legally binding. Nevertheless, it is a step in the right direction.


  • At the same time, the EU has launched the Digital Services Act (DSA), which is intended to oblige digital companies to provide greater consumer protection and transparency. It aims to deal with illegal content on the Internet, makes uniform specifications for the moderation of content, and creates a new supervisory structure that is intended to keep a close eye on large services in particular. The EU is hoping that the two legislative packages – the Digital Markets Act and the Digital Services Act – will come into force in 2023.

Avoiding protectionism

The EU is actively strengthening the digital sovereignty of Europe as a business location. This means new rules of engagement for the market economy, with these rules extended to include the dimension of digital space. The public debate has been initiated – and the interests involved naturally vary greatly.

The Federation of German Industries (BDI) sees both opportunities and risks in the target concept of digital sovereignty: “Opportunity, as it is associated with the potential to make our own society, economy and politics more resilient. Risk, as it can also lead to protectionism, misallocations and autarky.”) Digital sovereignty should not be understood as saying goodbye to globalised production, innovation and value creation processes.

The competition authorities see new tasks ahead of them. In the future, they must also be able to assess the technical development potential of company acquisitions. This is because in the digital economy, even the purchase of a small start-up can mean the long-term consolidation of a dominant position.

But despite all the challenges, the EU must not allow itself to be deprived of the power to act. After all, it is about our security, the preservation of our values in consumer protection and the control of infrastructures and market rules that are built according to our democratic understanding.

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