Who's setting the pace for the entire planet when it comes to the digital economy? The United States and its tech giants? China and its amazing capacity for production? Not at all!
When it comes to protecting citizens, the European Union leads the way. "Europe is in the driving seat, generating the 'Brussels effect'," claims Professor of Law Anu Bradford from Columbia University in New York.
Invited to the Solvay Brussels School of Economics and Management (ULB) by Wallonie-Bruxelles International, the researcher explained her point of view, which was the subject of a book published in 2020 (The Brussels Effect: How the European Union Rules the World).
The European Union sets the rules
"The Brussels effect refers to the formal and informal power of the European Union when it regulates the digital economy, as it did with the GDPR (the General Data Protection Regulation)," she says.
"Not only does this obviously concern the European market, but also global markets. Suppliers of digital goods and services around the world need to take European regulations into account if they want to develop their business in Europe. I have noticed that the big American high-tech companies are now using the GDPR as one of their ground rules, even though they don't have to. Why is this? It's the Brussels effect. Very few companies can manage without the European market."
"The European Union thus influences legal systems far beyond the EU member states," she insisted during her visit to the Solvay Business School, which is celebrating its 120th anniversary this year
It was in 1903 that the Business School was founded, thanks to funding from Ernest Solvay," recalled Prof. Bruno Van Pottelsberghe, Dean of the Solvay Brussels School of Economics and Management, during Professor Bradford's visit.
The digital planet is concerned
But why isn't the Brussels Effect counterbalanced by a Washington Effect in terms of regulations? "It's not the size of the market that counts," says Anu Bradford, "but rather the expertise of the institutions. In Washington, I don't see the same political will to regulate the digital economy. The European Union has taken its place in this context. It filled a void, a free space. This makes it a major player in this dimension, with all that this implies in terms of collateral effects on third-party markets. Europe has gained a clear economic advantage here, which also protects its competitiveness."
The GDPR is not the only European regulation involved in the Brussels Effect. With the digital transformation underway, the European Union is also evolving its regulatory framework in many other digital-related areas. Examples include artificial intelligence, data governance and digital services.
This year is no exception. In May 2023, the European Digital Market Act and the Digital Service Act both came into force.
Democratic guarantees
"These texts will have an impact on the activities of major digital players such as Google, Apple, Facebook, Amazon and Microsoft, as well as on video and music sharing platforms, tourist booking sites, app stores, social networks and marketplaces. The aim is to facilitate the advent of new players and make them responsible for what they distribute," notes the European Consumer Centre.
"These platforms will no longer be allowed to prioritise access to their own products and services. They also have to make the algorithms they use to influence consumer behaviour more transparent. They will also have to filter online sellers better and ban dishonest companies," reported the newspaper l'Echo on this subject.
In the end, who comes out on top in this Europe-US-China triangle? Prof. Bradford has her own idea about this. She will explain it in her next book, devoted to these three digital empires.
"There is now a growing awareness of the value of the European model," she says. "It provides better guarantees in a democratic world. But I would also point out two weaknesses in this context. Europe can regulate the global digital technology market, but it doesn't have any tech giants. This raises questions."
Source: Article by Christian Du Brulle for Daily Science, with the support of Wallonia-Bruxelles International.
