Whether the U.S. and EU succeed in rebuilding the transatlantic relationship holds broad implications, because the alternative—strained engagement between major trading partners—would help fragment the digital economy and give a strategic gift to China.
As the Biden administration works with its EU counterparts through the new U.S.-EU Trade and Technology Council (TTC), it should hold firm in defending the superior U.S. innovation system. To that end, U.S. negotiators must first clarify their positions on at least four strategic questions.
The AIA will cost the European economy €31 billion over the next five years and reduce AI investments by almost 20 percent. A European SME that deploys a high-risk AI system will incur compliance costs of up to €400,000 which would cause profits to decline by 40 percent.
The president should seek a stronger alliance with European allies, particularly against China, but he should not “give away the store” by sacrificing U.S. economic and technology interests simply to make amends.
ITIF hosted an expert panel discussion discussing EU-US digital trade relations and what both governments should do to foster closer relations without sacrificing U.S. digital innovation.
The European Commission has set out to ensure digital markets are “fair and contestable.” But in a paradigm shift for antitrust enforcement, its proposal would impose special regulations on a narrowly defined set of “gatekeepers.” Contrary to its intent, this will deter innovation—and hold back small and medium-sized firms—to the detriment of the economy.
It would be a massive step in the right direction if policymakers in the United States and around the world could focus on the facts and weigh up the various interests and stakeholders in a similarly sober and dispassionate way as the CJEU.
Norway is pivoting toward renewable energy—including offshore wind and electric vehicle technologies—while broadening and deepening its national innovation ecosystem to encourage new firms in a range of industries to scale up and compete globally.
The new approach advocated by the European Commission for competition enforcement towards digital markets illustrates a preference for precaution.
Ursula von der Leyen, the European Commission president, called for a “new transatlantic agenda for global change.” Before such a needed partnership can be fruitful, the EU will need to make a number of changes.
Transatlantic data flows are essential to organizations of all sizes and industries—not just large technology firms. The EU and United States must establish clear, consistent legal mechanisms for data transfers so both sides can thrive in an increasingly digital global economy.
ITIF's Center for Data Innovation hosted a video webinar to discuss the transatlantic opportunities and challenges to promoting better cooperation in military use of AI.
ITIF's Center for Data Innovation hosted a discussion about what the digital sector needs to unlock the power of data while spurring competition and innovation.
The “growth tax” seems to not significantly affect patenting in firms with more than 50 employees, since larger firms are more profitable and innovative due to economies of scale and have already priced the tax into their cost structures.
Notably, the deal agreed on December 24th gives important exemptions that will allow the UK to continue to export electric vehicles without facing tariffs.
ITIF filed comments advising the Commission not to introduce such a tax. ITIF explained the many reasons why the planned digital levy is a misguided recommendation, and urged the Commission pursue a more reasonable path:
The DGA is a positive step forward in outlining a framework to enhance data sharing in the EU and promote data-driven innovation, however further clarification will be necessary to ensure data protection and competition laws do not prevent firms from sharing data, to safeguard trade with non-EU countries, and to prevent the public sector from charging excessive fees for data access.
The Center for Data Innovation welcomes the goals of the EHDS initiative and agrees that adopting measures to enable better data exchange will facilitate artificial intelligence (AI)-enabled healthcare applications in the EU and allow firms to pursue economies of scale across EU markets.
Organizational efficiencies should not be an opportunity to enforce precautionary measures in innovation markets.
The Commission’s inception impact assessment envisages the possibility of no longer enforcing competition laws with respect to independent platform workers in order to improve their working conditions. The four options identified by the European Commission are misguided and detrimental to consumers, platform workers, and innovation. ITIF articulates 10 better ways to improve the working conditions of economically vulnerable platform workers while preserving the proper enforcement of EU competition laws in a fast-changing and highly innovative digital platform economy.
WASHINGTON—Upon the European Court of Justice’s invalidation of the EU-U.S. Privacy Shield, Standard Contractual Clauses (SCCs) or “model contracts” have remained the only scalable and widely accessible legal tool available to organizations transferring personal data from the European Union to the United States and most of the rest of the world.
SCCs are a widely used legal tool to transfer personal data out of the EU, but courts and regulators are making them costlier and more complex. This is a sign of Europe’s march toward de facto data localization—a threat to transatlantic digital trade that policymakers must avoid.
The EU and the United States should come to an agreement: Both nations will agree that the EU can engage in protectionist digital industrial policies only when and if the ratio between the trade deficit in IT/services is at least 10 percent the trade deficit in goods.
The EU-U.S. Privacy Shield’s demise affects thousands of firms that relied on it to transfer data. Policymakers should realize the enormous trade and innovation stakes involved—both bilateral and global—and build an improved framework for data protection and digital trade.
ITIF’s Center for Data Innovation hosted a high-level forum to connect stakeholders working to promote AI in Europe, showcase advances in AI, and promote AI policies supporting its development to EU policymakers and thought leaders.