European data chief prepares bid to get UK to join EU digital single market

charles taylor – stock.adobe.com

Data initiative Gaia-X is trying to plug the UK into a planned digital European single market, as the EU seeks to extend the reach of vast and controversial data laws over global supply chains

Mark Ballard

Published: 07 Jun 2024 13:00

In an interview with Computer Weekly, Gaia-X CEO Ulrich Ahle admitted that stubborn international differences in law and technology standards have stopped foreign suppliers from joining its EU-government-funded effort to build the software infrastructure, called a dataspace, for a digital European single market. Connecting to global dataflows is vital for his scheme.

As he spoke, Gaia-X faces increasing pressure from mounting global opposition to a mass of law the EU created in recent years to govern its digital single market and cross-border (xborder) data flows with non-EU countries as well.

A gang of Pacific and Angloshpere nations, led by Japan, and including the UK, US, Australia, Canada and Singapore, last month published plans for a more liberal global regime to govern xborder dataflows. It counters EU efforts to make dataflows accord with the burgeoning statute it created under its Digital Agenda, and to impose persistent technological controls over data that leaves EU borders. Gaia-X is developing a system to do that using digital rights management technology used to prevent illegal copying of such things as music, films and software.

Gaia-X’s ambition to establish legal parity in xborder dataflows has meanwhile led to an impasse in its effort to build a modernised data ecosystem for the automotive industry that incorporates Japan, whose suppliers are some of the most vital to manufacturers in Germany, the government of which co-founded Gaia-X and has been one its main funders to date.

Ahle, newly appointed CEO at Gaia-X, told Computer Weekly that he is talking with sympathetic UK organisations about mounting a new bid to get UK government backing (and potentially hundreds of millions of pounds in public funding) for its system, which is set to become a primary component in the software foundations of a digital single European market.

It would require the UK to implement laws equivalent to the vast body of regulation the EU has enacted to govern dataflows since the UK exited the European Union and stopped implementing EU law in 2020, even as the UK is lobbying in international fora for a more liberal regime of xborder data governance.

“I’m pretty sure that for the UK, dataspaces would create value for the economy, and for public administration and people,” said Ahle.

“We have a high interest in closing a deal with the UK, to implement these technologies. But we have not reached a formal agreement to establish a hub and put it into operation, because this would require local investment either from industry or from government,” he said.

“Hubs” are government-backed organisations that lead promotion and roll out of Gaia-X technology throughout industry and the public sector. They fund digital transformation and match local laws to Europe’s vast digital statute so firms can share data in an xborder data ecosystem governed by EU rules. Ahle said he wants a UK government minister on the management board of its planned UK hub.

Ahle said it needed the UK to have legal parity with the EU to function, but it’s statute need not implement EU law. This stipulation has stopped Japanese auto suppliers joining the scheme.

“It will be similar to our discussions with Japan to identify whether there are similar regulations which enable a fair and sovereign management of data and which create dataspaces reflecting your regulations,” he said.

The hub would determine what local laws have parity, “what needs to be adapted, what needs to be changed and what needs to be added” to make the UK statute compatible with the EU digital single market, just when it has left the real-world EU single market.

“We need to see UK regulations corresponding with the EU Data Governance Act, the Data Act and the AI Act,” said Ahle.

The UK would also need to force xborder dataflows to use technical standards the European Commission is setting as the basis of a single, federated EU dataspace: a dataspace of dataspaces much like the internet is a network of networks, combining regional and sectoral dataspaces that form a single market, encompassing commercial and civil spheres.

But for Gaia-X to succeed, it must create a worldwide network of interoperable dataspaces, because the big EU industries that have been building it need their entire global supply chains to be connected to create a single market compatible with EU law.

“To be sustainable in the long run, it is important that the [dataspaces] and standards we have defined are accepted and adopted on a global scale. This is very important for our ecosystem,” said Ahle.

Rich nations are meanwhile trying to tear down the legal and technical obstacles stopping global industrial supply chains from developing more efficient digital trade flows, wanting to innovate past the existing beaurocratic legal systems and decades-old technology that most global firms use to manage their xborder business.

The task has become urgent since China became an economic and security threat and prompted an exodus of industries, dubbed decoupling, whose supply chains have become largely dependent on cheap Sino manufactures.

But international negotiations over the matter, said to have been intense, have focused widespread opposition to EU law. The OECD league of industrial nations started trying to bash out a compromise over technical standards in May after the G7 group passed it the baton for global data governance last year. It has started an attempt to get an international agreement on digital identity – the core of Gaia-X’s architecture and the issue that created its impasse with Japan.

The Anglo-Pacific group has been pushing for a more liberal regime modelled after Japan’s Data Free Flow with Trust (DFFT) initiative. It substantiated its plans last month with the long-awaited establishment of its Global Cross Border Privacy Rules, an alternative to tight EU controls.

A spokesperson for the UK Department for Science, Innovation and Technology (DSIT) said that it was watching Gaia-X and the EU dataspace initiative with interest, but the Anglo-Pacific group of countries was doing interesting things as well, and the UK had put its weight behind Japan’s DFFT initiative at the OECD and G7. DSIT sent a written statement of UK policy aims akin to the liberal xborder data regime Global CBPR scheme published last month.

Gaia-X has been trying for years to get a post-Brexit, Conservative, British government to back it. The government snubbed the plan and Gaia-X abandoned its bid. But the new CEO is under pressure to make its system global this year and to finish building the core system.

The EU administration that launched the Digital Agenda will be dissolved after elections this year and has muscled in to get its digital single market finished since numerous dataspace schemes including Gaia-X had created a babel of incompatible data silos. Software lobby group OpenUK, which spearheaded its failed bid, billed it as a “lifeline” for post-Brexit Britain.

The EU has refused to recognise UK digital identity legislation, even though it was an EU law implemented before Brexit and despite UK recognising EU identity schemes, said a spokesperson for the UK Information Commissioner’s Office.