The year 2022 is the year of digital regulations. What does it mean for the economy within the EU?

February 7, 2022 Bratislava. In 2022, the European Union (EU) will face key decisions that will have a significant impact on the progress of the digital transformation, but also on the overall development of the economy. In particular, it should focus on the substance within the digital space. One of the main activities in the field of data regulation is the European Data Strategy and the Data Act as part of the initiative of this strategy, (A European Strategy for Data and Data Act), data transfer between the EU and the US. Data transfer, key European legislation, namely the Digital Markets Act (DMA) and the Digital Services Act (DSA), the Artificial Intelligence Regulatory Framework and the European Cyber ​​Resilience Act .

The effects of the Covid-19 pandemic have significantly strengthened the EU's ambitions in completing the digital single market. The main trigger is the significant increase in digital transformation in many areas in the corporate sector, in the functioning of processes in public administration, but also the need to kick-start economic growth in the region and implement these impacts in the legislative framework.

Growth may be slowed by some legislative gaps that may jeopardize the functioning of international flows in the economy. One of them is the missing act defining the terms of cooperation on data flows between the EU and the US data transfer.

The European Commission has confirmed that it intends to develop a new data transmission model (which would replace the original shield). This proposal should be discussed as early as the first quarter of 2022. The rise of the digital agenda requires the creation of clear and well-founded positions on the part of interest groups who can defend the position of both consumers and businesses in this area.

One of the main pillars for achieving and securing a single data market that will allow it to move freely within the EU and across sectors is the creation of a European Data Strategy that leverages business conditions, supports research and the functioning of public administrations. In order to strengthen the individual mechanisms supporting data sharing, the so-called The Data Act, which should establish mechanisms to facilitate certain categories of protected public sector data and increase confidence in data mediation and promote data altruism across the EU.

The next step in increasing confidence in the digital economy, which needs to be strengthened, is the current Digital Markets Act (DSA) and the Digital Services Act (DMA). DSA and DMA together create new rules and obligations for online marketplaces, applications, social networks and other platforms.

Although these measures are targeted at large corporations, they would negatively affect small businesses, individuals and platforms based on targeted advertising revenue.

The rate of development of digital technologies also means that there are a number of key areas that European regulators will be interested in. An important milestone is also the draft law on the regulation of technological innovations in the form of the Regulatory Framework for Artificial Intelligence, which is perceived as crucial, especially for the financial implications for smaller companies in connection with a significant degree of security regulation. According to the American think tank Center for Data Innovation 2 million euros and ultimately reduce the rate of investment in this segment.

At the end of last year, the EU also adopted a set of measures aimed at improving the working conditions of people working on digital platforms, resp. within the shared economy, unify the conditions of workers as well as the self-employed in order to avoid unfair competition. There are currently more than 28 million people working in the EU in this area, and this trend is growing. In reality, however, this action does not reflect technological progress and creates new barriers to the digital economy. The new EU approach will mean that these providers will have to act as employees, which would significantly reduce the attractiveness and availability of these services. For Slovakia, this would mean closing thousands of jobs and worsening the availability of critical services moved to the online space, which we are used to during the pandemic.

The security issue is a necessary issue in the field of digitization. Some experts have even classified Covid-19 and its impacts as the biggest threat to cyber security ever.

According to the European Union Cyber ​​Security Agency ENISA, attacks in 2021 have quadrupled compared to last year and attacks on cloud infrastructure have quadrupled. The sectors most affected are the transport, government and industry sectors. In the words of EU Internal Market Commissioner Thierry Breton: "The more data is connected, the more it can be hacked". This is also stated in the European Cyber ​​Resilience Act issued by the Commission last autumn, which proves that cyber security is one of the EU's priorities in the field of digitization.

The EU's long-term direction reflects the digital transformation

In March 2021, the EU unveiled plans for a digital decade by 2030, which include harmonization efforts and the definition of digital rights for citizens. According to these plans, the EU plans to focus on four directions of its so-called The digital compass: infrastructure, business, government and skills. These EU plans are proof of the need to be even more progressive and proactive in this area. These areas are intended to support a Europe-wide guarantee of the quality of digital public services through a reliable and secure infrastructure and to prepare businesses and populations for its further development in the field of digitization and innovation. Digital rights and principles should be among the main pillars of this digital society.

Thus, 2022 will probably be a year of transformation in the field of legislation and regulations in the field of digital economy. It is essential that these regulations do not stifle the potential that the digital economy represents for the growth of the EU and for the growth of Slovakia. That is why SAPIE has the ambition to be the main partner of companies in the field of digital economy in their efforts to ensure fair and free business in the digital space.

"The successful transformation of our economy into digital is one of the basic preconditions for maintaining jobs and economic growth in our country," said Ivan Štefanec, Member of the European Parliament and Ambassador of the League for Digital Growth, an initiative led by SAPIE.