Recognizing the differences in the value chain and prioritizing cooperation over protectionism
Legislation proposed and enacted during the 2019-2024 European Commission mandate aimed to regulate digital technologies within the Digital Single Market. While some proposals targeted specific challenges with tailored approaches, others took a more general and broad-sweeping approach. Additionally, the closing mandate of the European Commission has increasingly included language referring to “digital sovereignty” and “EU strategic autonomy.”
This has led to varying interpretations, with some advocating for more robust rules for the EU Digital Single Market, while others worry these measures could potentially lead to protectionism. Amidst these discussions, it is imperative to prioritize the safeguarding of European economic growth.
We propose several key recommendations for the European Commission to ensure the prosperity and competitiveness of the European economy:
Recommendation #1: Adapt Legislation for the Digital Value Chain
EU legislation on digital technologies primarily focuses on consumer protection, resulting in a robust body of laws and a vibrant Digital Single Market. However, this approach inadvertently applies rules drafted for consumer protection to industrial settings, known as B2B, which have distinct characteristics and challenges from B2C settings.
A clear distinction must be made between business users and consumers, as business users possess greater technological expertise, experience, and resources. This can be achieved by tailoring legal requirements to the customer. For instance, regulations like the EU Cyber Resilience Act impose automatic security updates for consumer protection. In B2B contexts, however, businesses prefer to retain control over their systems to meet specific operational and security needs.
Additionally, contractual relations along the B2B value chain should not be impacted by rules aimed at consumer protection. Cloud services, for example, vary greatly from infrastructure-as-a-service to software-as-a-service, as each has distinct obligations and legal considerations.
Recent legislation has successfully recognized these differences and maintained tailored approaches. For example, differentiating responsibilities between data processors and controllers (originally found in the General Data Protection Regulation) has been helpfully introduced in the e-Evidence Regulation and the Data Act to allocate responsibilities better.
By continuing to leverage established legislative principles, the EU can support compliance while ensuring consumer protection and enhancing legal certainty across the Digital Single Market.
Recommendation #2: Prioritize Cooperation Over Protectionism
The concept of “EU strategic autonomy” has evolved significantly since its inception in 2013, gaining prominence during the COVID-19 crisis and subsequent geopolitical shifts. While crucial for the EU’s independence and resilience, it must not lead to isolation from international partners.
In the technology sector — particularly cybersecurity — strategic autonomy has at times been misinterpreted, resulting in protectionist policies. This includes data localization mandates and ownership requirements in legislation like the EU Cyber Certification Scheme and the EU Health Data Space. These measures risk excluding non-EU companies from public tenders and research programs across several different technologies, such as cloud, cyber, and quantum, which would significantly slow Europe’s digital transformation.
According to the European Commission’s leadership, strategic autonomy should empower Europe’s global leadership and propel digital transformation, rather than create divisions with long-standing partners. Recent geopolitical shifts highlight the opportunity for autonomy through alliances and partnerships with like-minded countries in security, defense, and the digital sector.
Recognizing this, Member States recently called for digital sovereignty to be understood “in an open manner (…) in line with the Union’s commitment to a fair, open, and rules-based global digital market and in strong cooperation with its international partners.”
BSA urges the EU to embrace collaboration with other countries for digital transformation, such as leveraging non-EU cloud systems in public administration. This collaborative approach not only ensures EU companies’ access to global markets and builds stronger relationships, but also positions the EU as a leader in the digital age, driving innovation and growth.
