On January 24th the EU Commission published its second Staff Working Document on the development of common European data spaces, reporting on the progress towards fulfilling their unifying purpose: guaranteeing an EU-values-compliant single market for data.[1] This short article reports what news it brings.
The European strategy for data and its descendants
In February 2020, the European Commission issued a Communication “A European strategy for data”[2] (the Strategy), identifying access to data as a crucial pillar for the future of the EU economy and society: “Data should be available to all (…) [and that this] will help society to get the most out of innovation and competition and ensure that everyone benefits from a digital dividend”. The EU vision as described in this Communication differs both from that of the US, where “the organisation of the data space is left to the private sector, with considerable concentration effects”, and from China’s, where “a combination of government surveillance with a strong control of Big Tech companies (…) [hold] massive amounts of data without sufficient safeguards for individuals”. Since 2020, the EU has stepped forward with several crucial pieces of legislation to form a coherent framework for a data-driven economy consistent with EU values, such as the Open Data Directive[3], the Data Governance Act[4], the Data Act[5], the Digital Markets Act[6], the Digital Services Act[7], the Implementing Act on High-Value Datasets[8], and the AI Act[9] (currently in an advanced stage of discussion). Along with the Strategy, these documents not only set the groundwork for a single market for data, but they also protect it from threats from the outside, guaranteeing the application of EU values and principles in how market actors deal with data.
The Common European data spaces
One specific initiative foreseen in the Communication is the creation of common European data spaces. The Strategy mentioned 9 strategic sectors where real-time data will be accessible. The Staff Working Document (SWD) of January 2024 adds 5 to the previous 9 and now identifies 14 areas: agriculture, cultural heritage, energy, finance, green deal, health, industry, language, media, mobility, public administrations, research and innovation, skills, and tourism. The EU seeks to create a common data space for each of these areas with similar infrastructure and governance frameworks to promote interoperability across sectors and borders. According to the Strategy, the goal is to interlink the data spaces to form a single market for data in the EU, in which data flows in a secure and trustworthy manner. The idea of a single market for data provides the groundwork for other EU digital policy priorities, such as AI: “[t]here are limits to the ability of machines to predict (…). [T]he limits relate to lack of data.” (Agrawal, Gans & Goldfarb, Prediction Machines). Through the Digital Europe and Horizon Europe programmes, the EU has been funding coordination, support, and deployment actions, as well as innovation and research initiatives related to the EU data spaces. The Digital Europe 2021-2022 work programme also proposed the creation of the Data Spaces Support Centre, to “coordinate all relevant actions on sectorial data spaces and make available (blueprint) architectures and data infrastructure requirements for the data spaces”[10], and of “a large-scale modular and interoperable open-source smart European cloud-to-edge middleware platform”[11], which is now being developed under the name of Simpl.[12] Both through regulation and funding, the EU is proposing to create solid, permanent, and open-access data for all actors, and common data spaces are an essential part of this collaborative environment.
The SWD reports that the data spaces are in different stages of development, and many require different approaches. For instance, the Commission presented a draft Regulation for the European Health data space in May 2022. [13] In December 2023, the EU Council agreed to begin negotiations with the European Parliament, which had issued its first amendments to the proposed regulation, the trilogue being the next step. The development of other data spaces is underway, though each area requires different approaches. Take the example of the energy data space: A necessary Implementing Act for access to electricity metering and consumption data was adopted in June 2023, and expert groups are now being established to advise the Commission. The SWD mentions other milestones for 2024 on the energy data space, and support from DIGITAL Europe Work Programme 2023-2024 to actions for the deployment of the first operational version of the energy data space is envisioned.
Potential problems
However, not all the difficulties reside in differences between data spaces. Two of the problems the SWD identifies are internal to the EU: the engagement of the participants with the data spaces, and their de facto use. The first problem is free riding. This is not new – we have previously identified it: In the July 2023 PromethEUs publication “The EU’s Data Strategy from a multifaceted perspective: Views from Southern Europe”, we noted that “[v]oluntary contributions to sectoral data spaces, in the expectation that the other companies will also contribute, are an invitation to free riding” (p. 23). As is well-known, the expectation of free riding reduces the incentives to contribute in the first place.
The second challenge that the SWD identifies is the promotion of the use of the data spaces. Although data might be available, it will not be unconditionally open to everyone. Data holders will remain in control over to whom grant access. Except in the cases of publicly held data (ODD), high-value datasets, and data altruism (DGA), data reuse is granted against remuneration. At first glance, this control by data holders may limit free riding if, for example, data altruists decide only to concede access to their data to other data altruistic organisations. Still, the de facto use of the data spaces relies ultimately on the assumption that businesses expect more revenue to arise from the commercial value of their data than the potential costs of sharing the data and of engaging with the data spaces. The commercial value depends on data quality and accuracy, which are meant to be guaranteed by governance and data treatment standards defined for all data spaces. However, it is not clear whether SMEs (99% of the businesses in the EU), even if willing to share data, will see enough commercial value in these data spaces to justify installing the capacity to treat their data or to process others’ data (or to pay for data processing services).
A long bet by the EU?
The fact is that both China and the US are developing a clear vision and strong strategic frameworks to deal with data. Their companies will certainly benefit, at their citizens’ expense, both from high levels of data concentration and from the lack of privacy and personal data protection measures enshrined in the EU legal framework. Additionally, regardless of the EU vision to create a single market for data, due to international competition, it is highly likely that major data holders in the EU will not go along with data altruism and instead protect their data as much as they can.
Still, the EU has managed to prevent and solve many of the issues described above by involving key sectoral stakeholders in the development of each data space. The project of the data spaces is no doubt fundamental to the creation of a single market for data in the EU and (more importantly) according to EU values, as was envisioned in the Commission’s Communication of 2020. The common European data spaces are designed to act as the groundwork not only for other EU policy priorities, such as AI, but also for all economic, political, and social sectors, as they promote data usage (through their mediating function between data holders, data services providers, businesses, public authorities, and all the other data actors). Counterintuitively, the mere act of defining clear rules, trustworthy standards, and safe procedures may serve as a wake-up call to avoid data absenteeism among EU businesses and governments. Common European data spaces may not be such a long bet, after all.
[1] https://digital-strategy.ec.europa.eu/en/library/second-staff-working-document-data-spaces
[2] https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52020DC0066
[3] https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32019L1024
[4] https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52020PC0767
[5] https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L_202302854
[6] https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32022R1925
[7] https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32022R2065
[8] https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32023R0138
[9] https://eur-lex.europa.eu/resource.html?uri=cellar:e0649735-a372-11eb-9585-01aa75ed71a1.0001.02/DOC_1&format=PDF
[10] https://ec.europa.eu/newsroom/repository/document/2021-46/C_2021_7914_1_EN_annexe_acte_autonome_cp_part1_v3_x3qnsqH6g4B4JabSGBy9UatCRc8_81099.pdf
[11] https://ec.europa.eu/newsroom/repository/document/2021-46/C_2021_7914_1_EN_annexe_acte_autonome_cp_part1_v3_x3qnsqH6g4B4JabSGBy9UatCRc8_81099.pdf
[12] https://digital-strategy.ec.europa.eu/en/policies/simpl
[13] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52022PC0197