European digital market: sustaining competition

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European digital transition has an important social component: i.e. it should work for all, putting people first and opening new opportunities for business. Digital solutions are also vital in combating climate change and achieving the green transition. However, competition in virtual worlds, generative artificial intelligence, GenAI and other large and small digital “players” is increasing.  

Virtual worlds and generative AI are rapidly developing; but these presently quite disruptive technologies are having although still great potential. It is fundamental that the digital new markets stay competitive, and that nothing stands in the way of businesses growing and providing the best and most innovative products to consumers.
On the EU-wide discussion of the digital transition in: https://ec.europa.eu/commission/presscorner/detail/en/IP_24_85

For the EU-wide digital perspective to flourish, the European Commission is working on a digital transformation that will benefit everyone in the member states. The European approach will be based on three main pillars to ensure that the states seize opening opportunities and give the public, businesses and national governance full control over the digital transformation: a) technology that “works for people”, b) fair and competitive digital economy, and c) open, democratic and sustainable society.
Digital solutions are having some priorities and opportunities: e.g. to open up new opportunities for businesses, encourage the development of trustworthy technologies, foster achieving an open and democratic society, enable a vibrant and sustainable economy, as well as assisting combating climate change and achieving the green transition.
Source: https://competition-policy.ec.europa.eu/about/europes-digital-future_en

Actions to support digitalisation
As is mentioned above, the European approach will be based on three main pillars to ensure that EU member states seize the opening opportunities and provide citizens, businesses and governments control over the digital transformation.
The EU’s digital strategy is aimed at the following goals: – facilitate investment in digital skills, – protect people from cyber threats (hacking, ransom ware, identity theft, etc.; – ensure that AI is developed in ways that respect people’s rights and earn their trust; – accelerate the EU-wide roll-out of ultra-fast broadband for homes, schools and hospitals; and – expand Europe’s super-computing capacity to develop innovative solutions for medicine, transport and the environment.

Thus, in the sphere of fair and competitive digital market, the EU will: – enable a vibrant community of innovative and fast growing start-ups and small businesses to access finance and to expand; – strengthen the responsibility of online platforms by proposing a Digital Services Act; – clarifying rules for online services; – make sure that EU rules are fit for the digital economy; – ensure fair competition of all companies in Europe; and – increase access to high-quality data while ensuring that personal and sensitive data is safeguarded.
More in: https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/europe-fit-digital-age/shaping-europes-digital-future_en

As to the sustainable development, the EU’s digital strategy will: – use technology to help Europe become climate-neutral by 2050; – reduce the digital sector’s carbon emissions; – give citizens more control and protection of their data; – create a “European health data space” to foster targeted research, diagnosis and treatment; and – combat disinformation online and foster diverse and reliable media content.
The EU State of the Digital Decade Report reveals the Union’s progress towards a successful digital transformation as sets out in the Digital Decade Policy Programme 2030. The report highlights the need to accelerate and deepen the collective efforts, including through policy measures and investment in digital technologies, skills and infrastructures. E.g. the report includes concrete recommendations to the states ahead in adoption of their national strategic roadmaps and for their future adjustments; the report also includes the monitoring of the European Declaration on Digital Rights and Principles for the Digital Decade, which translates the EU’s vision of digital transformation into principles and commitments.
Source: https://digital-strategy.ec.europa.eu/en/library/2023-report-state-digital-decade

EU’s optimal digitalisation
In addition to the enforcement of competition rules, the EU is already active in addressing the challenges posed by these new technologies: in July 2023, a Communication on Web 4.0 and virtual worlds was published, while in December 2023, the European Parliament and the Council reached a political agreement on the Commission’s proposal for an AI Act: the first-ever comprehensive framework on Artificial Intelligence was intended to ensure that AI was safe and respect fundamental rights, while fostering innovation.
Virtual worlds are persistent, immersive environments, based on technologies including 3D and extended reality, which make it possible to blend physical and digital worlds in real-time, for a variety of purposes such as designing, making simulations, collaborating, learning, socializing, carrying out transactions or providing entertainment.
Generative AI are systems that generate, in response to a user prompt, synthetic audio, image, video or text content, for a wide range of possible uses; they can be applied to many different tasks in various fields.
Venture capital investment in AI in the EU already reached more than €7.2 billion in 2023; the size of the virtual digital market in the EU-wide is estimated at over €11 billion. These technologies are expected to grow exponentially in the next years and are likely to have a major impact on corporate business structures.

Effective enforcement of EU competition rules is essential to maintain competition in the EU’s Single Market, which is Europe’s best asset in terms of creating jobs and economic growth. These calls for contributions follow other calls carried out in recent years regarding the application of EU competition rules in various contexts. In addition, the European Commission is looking into some of the agreements that have been concluded between large digital market players and generative AI developers and providers. The European Commission is investigating the impact of these partnerships on market dynamics. Finally, the European Commission is checking whether Microsoft’s investment in OpenAI might be reviewable under the EU Merger Regulation.
Source: https://digital-markets-act.ec.europa.eu/index_en

Digital market act
European digital markets act, DMA establishes a set of clearly defined objective criteria to identify “gatekeepers”. Gatekeepers are large digital platforms providing so called core platform services, such as for example online search engines, app stores, messenger services. Gatekeepers will have to comply with the do’s (i.e. obligations) and don’ts (i.e. prohibitions) listed in the DMA. The main DMA’s legislative text is the Regulation 2022/1925 of September 2022 on contestable and fair markets in the digital sector supplemented by the Procedural Implementing Regulation.
The DMA contains the main rules for the designation of gatekeepers and the implementation of the obligations and prohibitions imposed on them; it is one of the first regulatory tools to comprehensively regulate the gatekeeper power of the largest digital companies. The DMA complements, but does not change EU competition rules, which continue to apply fully.
More in: https://digital-markets-act.ec.europa.eu/legislation_en

Following the initial proposal of the European Commission in December 2020, the Regulation was adopted by the European Parliament and the Council in September 2022; it entered into force in November 2022 and become applicable in May 2023. Within two months of that date, companies providing core platform services were obliged to notify the Commission on the “quantitative thresholds” and provide all relevant information, so that Commission would adopt a decision designating a specific gatekeeper. The designated gatekeepers will have a maximum of six months after the Commission decision to ensure compliance with the obligations and prohibitions laid down in the DMA.
In September 2023 the European Commission designated first six “gatekeepers”: Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft; besides, totally 22 core platform services provided by those gatekeepers have been designated too.
On gatekeepers in: https://digital-markets-act.ec.europa.eu/gatekeepers_en; on designated decisions in: https://digital-markets-act.ec.europa.eu/gatekeepers_en

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