High-Level Conference on ‘Shaping our digital future: the challenge of the digital revolution’ 

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Introduction: a regulatory framework to guarantee freedom, accountability and trust

I am delighted to welcome you to Parliament’s Chamber for today’s conference, which I have organised jointly with Commissioner Gabriel, on a topic which is taking on ever greater significance for our fellow citizens.

Since the late 1990s, digital technologies and their applications have become an integral part of our daily lives.

Like the industrial and technological revolutions which came before it, the digital revolution is changing the way we manufacture goods, provide services, work and consume; it is changing the world of work and the skills needed to thrive in that world.

As with the advent of steam, electricity or telecommunications, change as radical as this calls for rules; without rules, the market may turn into a jungle in which the only law is the survival of the fittest.

The Cambridge Analytica scandal involving the illegal use of personal data harvested from Facebook to influence the outcome of elections is only the latest in a long line of affairs which have highlighted the urgent need for measures to regulate digital platforms.

If it is to develop its full potential, in generating growth and jobs and stimulating technological development, the digital revolution needs freedom. At the same time, however, we should not forget that in our liberal democracies freedom must always go hand in hand with accountability.

Until now, however, freedom has generally come before accountability. One reason lies in the dizzyingly fast pace at which digital applications develop. Another, however, can be found in the misguided ideology which regards all regulation as a brake on development. It is as if, at the beginning of the last century, a decision had been taken not to introduce a highway code, or traffic lights and fines for bad driving, in order not to slow down the emergence of the car as a form of transport.

In reality, effective rules are the basis for balanced development: protecting individuals and the market generates trust and boosts investment, technology and growth.

Web giants cannot be allowed to operate above the law. They must be subject to the same rules on the protection of workers, privacy and consumers, and on transparency, taxation and intellectual property, as all other firms. This is also essential to guarantee fair competition with traditional operators. Effective competition rules should make for a properly functioning internal market, with no barriers and no misuse of dominant positions which is so damaging to businesses and consumers.

In Europe, some 250 million people use the internet every day. We have a duty to protect them and all those who are affected by their actions, even if they do not actually use the internet themselves.

Ninety-nine per cent of EU citizens have come across totally fake news items disseminated by platforms. Eighty-three per cent of people in Europe regard fake news as a threat to democracy.

Given that the platforms behave like publishers, lining their pockets with the revenue from advertising, they must also be held accountable for the content they publish. They cannot be allowed to turn a blind eye to the dissemination of child pornography, the illegal sale of weapons, messages preaching radicalisation and racial hatred, terrorist propaganda, the selling of counterfeit goods or blatantly fake news items.

They need to invest more in human resources and technological development, to ensure that freedom does not degenerate into a dangerous free for all.

Introducing effective rules also means striking the right balance between users’ freedom and their privacy. It is unacceptable that waiving the right to privacy should be the price we have to pay for accessing online applications.

The Facebook-Cambridge Analytica scandal is a wake-up call, a reminder that politicians have a duty to prevent abuses; but it also offers an opportunity to point out that the EU is in the forefront of the struggle to protect privacy.

On 25 May, new EU rules will enter into force which will, for example, guarantee the right to be forgotten, the right to be protected against unsolicited advertising emails and the right to know when a personal data breach has occurred and how the data in question is being used.

 

Fairer taxation

The platforms cannot be allowed to usurp the powers of the State, levying fees and duties without paying taxes themselves.

Our citizens are calling for tax justice. Today, instead, they are confronted with the appalling spectacle of what can only be described as tax dumping, which impoverishes everybody and forces the countries which lose out to impose punitive taxes on businesses and labour.

When States which enjoy all the benefits of the internal market offer ludicrously generous, manifestly unfair terms to multinationals or internet giants in order to persuade them to locate their headquarters on their territory, they are effectively harming the entire Union, by providing a haven for the profits generated by the firms concerned throughout Europe and by forcing other States to offset the lost revenue by increasing taxes or cutting social services.

It is estimated that this predatory behaviour shrinks the tax base by at least EUR 600 billion, depriving the EU Member States of more than EUR 100 billion in tax revenue every year.

Under the own resources system called for by Parliament, that revenue would substantially increase the volume of the EU budget without imposing an additional burden on ordinary people.

As proposed by Parliament and the Commission, platforms should be taxed where they create value; that is to say where they win advertising contracts, sell data or perform transactions, where their content is viewed and they conduct business dealings.

 

More investment in the digital economy to boost competitiveness and jobs

An effective regulatory framework is essential to create trust and attract investment. But it is not enough to bridge the divide between those who succeed in grasping the opportunities offered by the digital economy and those who risk being left behind.

It is unacceptable that a high-speed internet connection should be available to 90% of the inhabitants of our major cities, but to only 40% of those living in rural areas.

At the Tallinn Summit last September, the EU institutions and the Heads of State and Government gave an undertaking to invest more in the digital economy. The first litmus test of their resolve is the current debate on the new Multiannual Financial Framework; a significant increase in investment in research, innovation, industrial development and training is essential.

The European Union is our strength. To help start-ups and innovative business models flourish, we need economies of scale and resources. Only by working together, in an integrated digital market with 500 million users, can we hope to be successful. No Member State acting alone can develop 5G connectivity, guarantee cybersecurity and manage big data.

We must become leaders in the technological sectors which underpin our ability to compete and create jobs: the internet of things, artificial intelligence, robotics, industry 4.0.

In February, we approved the new regulation on geo-blocking, which will ensure that everyone can access online content, goods and services available in the Union.

Between now and the summer, Parliament will draw up new rules on the free movement of non-personal data, which will guarantee that they can be used, subject to public order considerations, even if they are stored in other Member States.

In a few hours’ time, the sixth trilogue meeting on the Electronic Communications Code, which will clear the way for the development of new services, will start. As it did for roaming, the management of frequencies and local connectivity, Parliament is prepared to play its part.

 

More investment in education and training to ensure that no one is left behind

Training is another key area in which more investment is needed. How many professions have changed out of all recognition in the last 25 years? With the emergence of the internet, data analysts, software programmers, algorithm designers and managers and bloggers have become key figures. Robotic surgery and online consulting are now nothing out of the ordinary.

According to the World Economic Forum, 65% of the children starting school now will work in jobs which do not yet exist. This calls for a complete overhaul of the European education system.

We cannot accept a situation in which young people are unemployed even as firms are leaving Europe in search of the skilled workers they need.

Conclusions

In their joint declaration on the legislative priorities for 2018 and 2019, Parliament, the Commission and the Council gave an undertaking to complete the digital single market. This also means adopting, before the end of this parliamentary term, rules to guarantee a high level of protection of personal data and of the digital rights of individuals and firms.

No one doubts that the digital revolution will bring many benefits. Quite apart from improving industrial productivity, connectivity, transport and power grids, it will also give ordinary people a better quality of life.

Digital technologies are ushering in major advances in many areas of surgery and medicine and are making remote treatment possible.

They are also making our lives safer. For example, the e-Call emergency call system, which since 31 March has been mandatory on all new models of cars and light utility vehicles, will reduce the number of road deaths by some 10% every year.

Digital technologies are helping us to step up border checks and make progress in the fight against terrorism and organised crime.

Consumers enjoy wider choice and price and charge transparency and can buy products and services without leaving their homes.

The cultural and creative industries are being given a powerful shot in the arm and the benefits are spilling over into tourism. I am thinking, for example, of virtual journeys, augmented reality displays at archaeological sites and the digitalisation of museums.

The advent of digital technologies also offers us an unmissable opportunity to revolutionise relations between citizens and the public authorities, improving efficiency and the quality of the services provided and reducing the cost to the taxpayer.

But, as with many other new technologies in the past, there are serious dangers and challenges which politicians have a duty to address.

And that is precisely what we are doing here today.

I should like to thank all the European Parliament’s committees for their vital contribution to the work of regulating the digital economy.

I should also like to thank the European Commission, and in particular Commissioner Gabriel, for its excellent work. Earlier today, the EU executive adopted a package of measures to combat fake news, improve data management, boost the development of artificial intelligence and guarantee the lawfulness and transparency of online services. 

The Cambridge Analytica affair is a reminder that we must remain vigilant, however. We must investigate to the fullest possible extent the claims that EU citizens’ personal data has been used to manipulate elections and other votes, starting with the Brexit referendum.

For that reason, I have invited Mark Zuckerberg to appear in person before the European Parliament to address the concerns of 500 million EU citizens. I hope that he will do everything he can to help us win back our citizens’ trust.

I wish you every success in your work.