Your GDPR Is No Good Here
Digital sovereignty as more than a buzzword.
American innovation - smartphones, social media and large language models – has led to unprecedented commercial growth around the world, but also introduced genuinely strange second-order effects on society. We can’t scientifically quantify many of these effects, but they intuitively make sense. For example, the mass adoption of smartphones correlates strongly with declining birth rates across different countries. Relatedly, one of the main ideas I explore in my book Death To Algorithms is how dating apps ruin dating and relationships.
There is at least one effect of the digital transformation which is really easy to quantify and understand, yet most businesses and countries ignored it until recently. When a country decides to import practically all of its digital infrastructure from overseas, it runs the risk of becoming a digital colony of the exporting country.
Henry Farrell and Abraham Newman coined the term ‘weaponized interdependence’ to describe a situation where one country asserts coercive leverage over other countries by controlling chokepoints in global financial and informational networks. For example, the US can significantly influence the global financial system because of the dollar’s reserve-currency status. China has a strategic advantage over the supply chain for technologies due to its control of rare earth materials. Another prime example is how US Big Tech companies (and by extension the government) can leverage power over the internet, through its majority control of fiberoptic cables, digital platforms, cloud infrastructure, operating systems, GPUs, and more.
Cory Doctorow describes the anti-circumvention law in the Digital Millennium Copyright Act (DMCA) signed by Bill Clinton in October 1998 as a key reason why the US has managed to nationalize and protect its dominance over the global (read: Western) internet. The anticircumvention law, Section 1201 of the DMCA, makes it a crime to bypass DRM-restrictions (DRM: Digital Rights Management) to gain access to copyrighted works. Effectively, the provision makes it illegal or inherently risky to reverse-engineer, achieve interoperability with, adopt new features to, or otherwise change proprietary technologies from the US.
After the DMCA was adopted, US trade representatives demanded that its trading allies adopt similar provisions, and they did. In the EU, the corresponding rule on anticircumvention is Article 6 of the 2001 EU Copyright Directive (the “InfoSoc” Directive). Doctorow assumes that the threat of tariffs explains why the EU, and countries such as Australia, Canada, Mexico and Chile, caved to the American demands. But guess what? The countries were tariffed anyway and the anticircumvention laws stand. Doctorow thinks it’s finally time to repeal them:
“I mean, if someone threatens to burn your house down unless you follow their orders, and then they burn your house down anyway, you don’t have to keep following their orders.
(..)
It’s hard to convey how much money is on the table here. Take just one example: Apple’s App Store. Apple forces all app vendors into using its payment processor, and charges them a 30 percent commission on every euro spent inside of an app.
30 percent! That’s such a profitable business that Apple makes $100 billion per year on it. If the EU repeals Article 6 of the Copyright Directive, some smart geeks in Finland could reverse-engineer Apple’s bootloaders and make a hardware dongle that jailbreaks phones so that they can use alternative app stores, and sell the dongle – along with the infrastructure to operate an app store – to anyone in the world who wants to go into business competing with Apple for users and app vendors.”
A new report produced by the EU Commission presents four recommendations to protect the EU’s digital sovereignty that are radically less confrontational and more modest in nature compared to Doctorow’s proposal. They are based on the framework of ‘weaponized interdependence’ by Farrell and Newman. My summarization of the four recommendations in the report:
Digital Governance: Invest more in ‘soft power’. Strengthen coalitions through international forums, institutions, and alliances.
Infrastructure and data: The EU should not deny its dependencies, but identify and limit them. Manage its reliance, without sacrificing control, for example by mandating the use of sovereign encryption keys for third-party cloud providers.
Markets and products: Harness access to the EU market strategically to deter retaliation and prevent hostile actors from using chokepoints as tools of extraterritorial influence.
People and value: Provide support to independent bodies such as European External Action Services (EEAS) to counter disinformation campaigns on social media. Policy interventions should target the underlying mechanisms of interference, such as the use of fake content, while mandating high standards of algorithmic transparency and user autonomy.
Beyond the EU’s push for digital sovereignty, it continues to emphasize the need for safe and democratic AI.
In mid-March, the EU Parliament approved the conclusion of the Council of Europe Framework Convention on Artificial Intelligence. It’s the first international legally binding treaty on AI which ensures “that activities within the lifecycle of artificial intelligence systems are fully consistent with human rights, democracy and the rule of law” (Article 1). Countries outside of the EU such as Iceland, the United States, Israel (!), the UK, Norway, Canada, Uruguay, Japan, and Ukraine have signed the treaty so far. The ‘AI Convention’ contains binding, but general provisions about protection of human rights, respect for the rule of law, human dignity and individual autonomy, transparency, accountability, privacy, non-discrimination, and more.
Wonderful! Why don’t we all close our eyes for a moment, hold hands, and recite some of the paragraphs together?
The problem is that a lot of the EU’s digital regulation reflects its Christian heritage and religion-like rituals, more so than any practical benefits for businesses and consumers. As long as the EU doesn’t have digital sovereignty or a meaningful AI infrastructure, all its good intentions and democratic values have nothing to stand on.
Contrast the EU Commission’s unambitious recommendations for digital sovereignty and the hopelessly naïve AI Convention with the stark projections for the EU delivered in a recent speech by Mario Draghi:
“Since 2020, one external shock has followed another, each compounding the last, each narrowing the room for hesitation. We are still absorbing tariffs from our largest trading partner at levels unseen in a century. Now war in the Middle East has returned inflation to our economies and anxiety to our households. Even when the Strait of Hormuz reopens, the fractures inflicted to supply chains could extend into months or years.
These shocks would be difficult in any circumstances. But they arrive just as Europe’s investment needs have become immense. What was already estimated at around €800 billion a year in additional strategic spending has, with the defence commitments of recent years, risen to almost €1.2 trillion a year on average.
Growth is therefore the condition for everything Europe now says it must do: finance the energy transition, defend its continent, build the industries of the digital age, and sustain societies that are growing older.And the world that once helped Europe generate prosperity is no longer there. It has become harsher, more fragmented and more mercantilist.
Across the Atlantic, we can no longer assume that the guardians of the postwar order remain committed to preserving it. Decisions with profound consequences for European economies are increasingly taken unilaterally, in disregard of the rules the United States once championed. And for the first time since 1949, Europeans must face the possibility that the United States may no longer guarantee our security on the terms we once assumed.
Nor does China offer an alternative anchor. It is generating industrial surpluses on a scale the world cannot absorb without hollowing out our own productive base. And it is directly supporting our adversary, Russia.
In a world of changing partnerships, every strategic dependence must now be re-examined. For the first time in living memory, we are truly alone together. Europe is responding to this new reality. But it is responding within a system that was never designed for challenges of this magnitude.”
China, Russia, the US, and US Big Tech companies are not sharing the EU’s Christian, democratic outlook on life. China is indifferent to the EU’s values, while the US and Russia are actively attacking them and want to see the EU project dissolved. US Big Tech companies are praying to another God, and it’s not Trump. They are seeking to create a new God with AI, and in a post-AGI world, rules and democracy won’t matter.
How will the EU ensure economic growth, the energy transition, military defense, digital sovereignty, while maintaining welfare and high living standards during a time of existential crisis? We will need to take radical measures. But too much sophisticated word salad, nostalgia for the past, meaningless compliance work, and favoring romantic ideals over the cold reality, will ensure that the EU falls right into the arms of fascist leaders; the one thing it was designed not to do.
