The Industrial, Digital and Competition Agendas of the New European Commission: What is in Store for Central and Eastern European Businesses
October 2019 – The countdown to the election of the new European Commission has begun. The College of Commissioners—each with their own agenda, approach and vision—is expected to make Europe “more like herself”, “greener”, “fit for the digital age” and maintain Europe’s position as a global regulatory powerhouse and equal trading partner to the US and China.
How the European Commission’s industrial, digital and competition agendas would facilitate achieving those (and other) objectives is summarised in the rundown below of the latest mission statements from Margret Vestager, Executive Vice President-Designate of the European Commission and the current Commissioner for Competition, before the European Parliament.
1. A European Industrial and Digital Strategy
Executive Vice President-Designate Vestager intends to streamline and roll out an EU-wide industrial strategy anchored on the following pillars:
- Transition towards a climate-neutral economy by improving energy storage, increasing the energy efficiency of products and services, and by optimising the selection of suitable sites for renewable energy production.
- New SME strategy: The European Commission will work with the Member States to upscale investment by small- and medium-sized enterprises in research and innovation (including innovative digital technologies and their application) via EU funding programmes under the available EU financial frameworks (including Horizon Europe, the Digital Europe Programme, the European Defence Fund and InvestEU) and to create incentives and programmes for training and re-skilling staff at SMEs.
- Innovation hubs in Central and Eastern Europe: The European Commission intends to cooperate with the Member States towards the creation of a network of innovation hubs, including in Central and Eastern Europe, that would facilitate technology transfers, advances in new technologies (e.g., artificial intelligence, batteries, space and defence) and the development of European solutions that can meet the demand from both businesses and consumers.
- Reciprocal global free trade: Ms Vestager intends to use access to public procurement opportunities within the EU as leverage for European companies to obtain the same access in third countries (such as China). The existing EU legal toolbox, including in the areas of public procurement, antidumping, state aide, and antitrust, would be used to ensure compliance with European rules on public subsidies and fair competition by overseas companies.
- Adoption of a new Digital Services Act: One of the priorities of the European Commission is expected to be the adoption of a new Digital Services Act to upgrade the existing rules for online platforms, services and products.
2. Review and Better Application of Antitrust Rules
In the area of competition, Executive Vice President-Designate Vestager intends to build upon the policy agenda and enforcement priorities pursued during her first tenure as a Competition Commissioner. In particular:
- Review of the rules on European Union antitrust, mergers and state aid: This is either already underway (and will stay on course) or on the calendar within the next 100 days. The purpose of such a review is to enable the Commission to “get up to speed” on the latest developments and address the dynamics of digitalisation.
- Faster enforcement via interim measures: Ms Vestager has indicated her intention to use more often the possibility, under EU antitrust regulations, to impose both structural and behavioural remedies in order to bring an antitrust infringement to an end quickly and effectively and to mitigate any imminent adverse effects on competition.
- Change in market definitions: We have witnessed a progressive trend of market definitions being narrowed during the course of antitrust investigations and merger reviews by the European Commission. Ms Vestager appears to tacitly admit that this tendency will continue and that the approach to market definitions would not be revisited solely to accommodate cases of great national importance, such as those leading to the creation of national champions (e.g. Siemens / Alstom and the likes).
3. New Digital Tax and a Level Playing Field in Taxation
- Digital taxation: The European Commission will work with other international stakeholders, such as the G20 and the Organisation for Economic Co-operation and Development, to design and introduce an effective global digital taxation regime. This appears to be the preferred option for the EU in order to align regimes worldwide and thus reduce compliance costs for global businesses. If however by 2020 no international agreement on digital taxation is reached, Ms. Vestager intends to push for the introduction of such a regime at least in the EU.
- Public country-by-country reporting, common consolidated tax base, and minimum corporate tax rates: Ms Vestager appears to sympathise with tax reform proposals concerning the introduction of public tax reporting by companies in each Member State, a common consolidated tax base and a minimum corporate tax rate, in order to avoid “forum shopping” within the EU.
4. Ethical and User-Friendly Artificial Intelligence
- Better access to and sharing of data by European AI businesses: This appears to be on Ms Vestager’s agenda as well. She recognises data availability as one of the main enablers for European AI solutions. A contemplated next step in this direction appears to be improving access to public data.
- Fundamental rights and AI: Adherence to European data protection and e-privacy regulations will remain a fundamental building block of a new European framework on AI in order to ensure user-friendly solutions and the further development and uptake of AI in daily life.
- Directive or regulation on governing AI?: At this stage of the process, Ms Vestager has not yet shared her view regarding this question.
- Better attuned liability and safety rules also for AI: This is an area that Ms Vestager is sure to pursue, either as part of new consumer protection legislative packages or via cross-sectoral and technology-neutral legislative tools.
For further questions and assistance with compliance matters, please contact Dessislava Fessenko, Of Counsel, at .