DIGITAL SOVEREIGNTY: GAFAM, BATX, AND … THE EUROPEAN UNION?

Covid-19 exacerbated societies’ dependency on technologies. They now are crucial to building economic, social, and health resilience in the European Union.

If digital transformation is at the top of the EU’s priorities, there is speculation whether, despite great potential, Europe will succeed in turning rulemaking competencies into digital sovereignty. With heightened tensions, the clash between American and Chinese tech giants presses the issue of political administrations’ dependency on private foreign entities. In France, the secret services are equipped by an American firm, Palantir Technologies. Alex Karp, CEO of the Big Data business is a close-minded friend of Donald Trump and endowed the CIA with his society’s technologies. Conflicts now arise from the digital world, and the economic competition between the renowned GAFAM and BATX has geopolitics ramifications.

BATX, for Baidu, Alibaba, Tencent, Xiaomi, and GAFAM, for Google, Amazon, Facebook, Apple, and Microsoft are the mastodons of the new technologies sector. Nine firms are enough to dominate and assert authority over a global market. If their upbringing contrasts them, BATX and GAFAM do share similarities of importance in respect to the EU’s digital sovereignty. In digital innovation, they take the lead, strong of unprecedented market capitalization which allows them to invest massively in R&D. They account for more than 4500 billion dollars. Yet, new technologies such as AI, the internet of things, robotics, or smart cities are fundamentally challenging our societies and affecting our behaviors. The issue may not be perceptible in the presence of private companies: they are navigating far from the contingencies of the central government. However, BATX companies, raise concern. If they are not public, they remain within the grip of the Government, evidenced by their financial ubiquity in Africa. BATX and Chinese firms follow Xi Jinping’s New Silk Roads ‘ itineraries. Even for GAFAM, recent occurrences of disinformation campaigns catch the attention of European lawmakers, leaders, civil society, and researchers. Political phenomena such as radicalization are fostered by social media like Facebook or Youtube. Radicalization became a lever to increase profit: Youtube was exposed to promote radical content. As its users were prone to stay longer watching radical videos catering to their political beliefs, Youtube couldn’t pass on the opportunity to generate ad revenue. This type of content was further recommended; Youtube nudged its users down the rabbit hole. 

Another commonality: GAFAM and BATX are of national significance to the American and Chinese Governments. Behind economical pretenses, lie geopolitical stakes. GAFAM and BATX are tightening the network of their State’s presence, particularly in Africa, Central, and Eastern Europe, and Asia. Willing to establish itself in a foreign country, GAFAM negotiates with the government and creates a subsidiary company. BATX are more discreet, surfing on their long-gone yet advertised identity of the emerging country, which miraculously clears them of imperialism or neo-colonialism suspicion. In Africa, their tip-toeing investments are followed by outcries over human rights or national sovereignty violations, for instance in Zambia’s copper mines, a metal necessary for computer chips ‘ production. In foreign lands, BATX companies buy local firms or create partnerships, hindering local growth by annexing it to the needs of the Chinese markets. Moreover, China’s newly found passion for special economic zones (SEZ) may create entire economical units under Chinese authority. Chinese firms would benefit from advantages over local actors. The GAFAM are not virtuous investors, they do not care for their social responsibility but still guided by a belief in endless profit, untempered by the recognition of their social or environmental impact. 

A new fear emerges, that of a new political dynamic: cybercolonialism, brought about by current opportunities such as that of the optic fiber.  BATX and the GAFAM are among the top firms answering to call for tenders. The risk of  Chinese or American-driven digital corridors lures on the horizon. If users are in dire need of services provided by GAFAM companies, they do not yet have the tools safeguarding their interests in regards to technologies’ production, financing strategies, or data collection and use policies. Digital and data sovereignty emerges from the gap, with the hope that it will keep private companies in check, and out of the States’ prerogative, threatened by privatization through, for instance, automation. A justifiable projection: in 2013, former Google CEO Eric Schmidt complained that States were too slow and ineffective in facing rapidly evolving technologies.

What is the EU’s room for maneuver? Can it profit from China and the US ‘ rivalry,  thus limited to a hedge-strategy? The EU could only, in such a scenario, negotiate for better terms in a contract. Can the European Union rather put its own Tech Giants into play? It is h Horizon Europe’s ambition, the latest Research, and Innovation EU Programme, to be launched in 2021. Nevertheless, there is currently no European firm capable of competing with BATX or the GAFAM, of enforcing a new equilibrium of power between tech giants. 

A European strength is its capacity to set up norms, its experience with regulation in a broad diversity of sectors. Regulation could be the interval through which the EU’s expertise could sneak into the chessboard to promote its agenda and, most importantly, protect European assets. 

When challenged, the European Union can speak out as one voice, and affirm its status as the third contributor to the world economy. European diplomacy has proven its influence during the Libra incident. In 2019, Facebook introduced Libra, a cryptocurrency that would have propelled it into a new era of digital supremacy. Libra had the potential to concurrence sovereign currency, undermining the historic, most profound legitimacy of the State as a political unit. The European Union carefully calibrated the counter-attack. Aware of their incapacity to openly confront Facebook, they set out to methodically convince, one by one, Libra’s partners, until Libra had no partners left: Visa, PayPal, MasterCard, and eBay all quit. Libra is thus aborted … for now. A much-needed lull during which the European Union must clarify and set in motion a Digital Sovereignty Agenda. In September 2020, Commissioner Thierry Breton specified the European Commission’s strategy, founded on three pillars: computing power, control over European data, and secure connectivity. Nonetheless, the European Digital Decade: digital targets for 2030 presented on the 9 of March 2021 is not centered on sovereignty but rather on competitivity and innovation as a way to protect European interests.