In the past two years, leading EU officials promoted European Digital Sovereignty. The initiative aims at strengthening the position of the bloc within the networked world. Besides the public discourse, various actions are implemented to boost the digital sovereignty. The measures are located in five areas: Data Governance, Platform Regulation, Digital Infrastructures, Emerging Technologies, and Cybersecurity [1]. Since digital sovereignty contributes to value creation, prosperity, and the defense of norms, the initiative is essential for the sake of European citizens and organizations.
Digital Sovereignty within the Network Society
The relevance of digital sovereignty builds on the network character of current societies operating in the digital sphere. Digital networks are constituted by information flows (such as financial, operational, or social) between nodes [2]. The nature of these nodes can be either physical or transcendent. For instance, when joining a social network, ICT infrastructure is a physical requirement for the transcendent character of the visited platform. Thus, network societies rely on physical infrastructure and create a meta sphere. Secondly, added value within networks also demands physicality. Capital, for example, might be transferred electronically, overcoming nation-state boundaries. Nevertheless, it needs to settle somewhere to generate profit, creating a physical industry, thus demanding territory [3]. Thirdly, platform owners, such as corporations or physical beings that obey rules, are in charge of these platforms [4].
In all these cases, it is usually the nation-state or a community of states, for instance, the European Union (EU), shaping and depending on the digital sphere. Foremost, by arranging the physical requirement of networks (territory); second, by organizing the value co-creation of networks. Furthermore, by administering justice (law-making) and determining the operational processes of networks. This reliance on the organizational nature and state-boundness implies that whoever controls ICT-Infrastructure, access and law-making can dictate digital ongoings to a certain extent. Digital sovereignty must therefore mean staying in charge of all these processes.
Value Capture and Economic stability
In the context of sovereignty, value creation needs to be looked at more closely, as infrastructure and digital artefacts serve as the foundation for creating profits. Dependence on third parties implies that, firstly, the creation of value and, thus, the monetization of goods and services takes place outside the European Union. This means that transactions and innovations in the digital space always imply a drain of value. Turnover and profits are therefore transferred to foreign companies and states. If, for example, a European citizen buys a product from the EU on a US platform, the sale is “taxed” based on transaction fees. The company behind the marketplace thus receives a service fee by offering the intermediation – a fee that could also stay in the European Union.
Secondly, economic stability is linked to digital sovereignty. In other words, a lack of sovereignty indicates that individuals or organizations suffer a loss of control. In the worst scenario, the EU’s economic performance would deteriorate. The US cloud computing providers can exemplify this. Amazon Web Service, Microsoft Azure, and Google Cloud have a global market share of almost 70% by the end of 2022 [5]. Also European companies with digitalization aspirations are using the services of the ICT enterprises. For example, large car manufacturers: Volkswagen is using Microsoft Azure as the foundation for developing new vehicles as part of its €3.5 billion digitalization strategy [6]. The contract award can be understood as a drain of monetary value. More importantly, Volkswagen is handing over control of the digital infrastructure (e.g., in the form of servers). Thus, future business is partly conveyed to US-American companies, because there is no comparable infrastructure provider in Europe.
Enforcing European Norms
By strengthening the sovereignty of European individuals and companies within the realm of the digital, dependencies on external norms can be abandoned. The EU defines itself as a political system based on shared values. Therefore, it launched a counter-offensive concerning digital sovereignty against competing systems such as China and the US [7,8]. Furthermore, by being digitally sovereign, the EU can ensure its understanding of human rights and democracy. Take, for instance, the individual law-making of platform owners: Elon Musk serves as a prime example as, on the one hand, following his understanding of democracy by organizing Twitter Poll Votings; on the other hand, banning people based on this very understanding. If the EU controls server infrastructure and competing software, its enforcement power against such actors increases. Although, it is questionable if a European understanding of social norms and laws applies to the rest of the world. It’s admirable that the European Union strengthens its citizens by becoming a digital sovereign. However, employing this power to change other regions of the world “for the better” must include the affected actors to avoid relapsing into old colonial patterns.
Two Sides of the Same Coin
In conclusion digital sovereignty is essential for ensuring the economic prosperity and maintaining democratic values within the European Union. Yet, the implementation of independence in the digital requires careful assessment. As countries outside the EU demonstrate, digital autonomy is possible but not without consequences: In early 2022, Russia was excluded from the SWIFT system. By now the newly built national payment system set foot and is already used by one third of the population [9]. Although the country has increased its digital sovereignty, its economy is suffering serious consequences. The missing possibility to perform financial transactions globally influences the export of Russian goods like gas or agricultural goods. Therefore, digital autonomy without any form of cooperation might not be sufficient to sustain a single nation-state. In terms of the EU, a balanced form of semi-dependence is needed. Ensuring the operability of critical areas and taking into consideration the potential drop-out of other actors. Eventually, the bloc must react and strengthen its position in the digital realm, if it intends to hold the role as a global player.
[1] Roberts, H., Cowls, J., Casolari, F., Morley, J., Taddeo, M., & Floridi, L. (2021). Safeguarding European values with digital sovereignty: An analysis of statements and policies. Internet Policy Review.
[2] Castells, M. (1999). Information technology, globalization and social development (Vol. 114). Geneva: UNRISD.
[3] Brenner, N. (1999). Globalisation as reterritorialisation: the re-scaling of urban governance in the European Union. Urban studies, 36(3), 431-451.
[4] Dolata, U. (2019). Privatization, curation, commodification. Österreichische Zeitschrift für Soziologie, 44(1), 181-197.
[5] https://www.statista.com/chart/18819/worldwide-market-share-of-leading-cloud-infrastructure-service-providers/
[6] https://www.ft.com/content/778bdc50-c304-11e8-8d55-54197280d3f7
[7] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A52020PC0767
[8] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52020DC0066
[9] https://www.reuters.com/business/finance/russias-swift-alternative-expanding-quickly-this-year-says-cbank-2022-09-23/
