In early 2020 the EC published the DSA/DMA package and the European Green Deal, two fundamental regulatory agendas at the core of future EU policy. Such initiatives will most likely inspire additional measures/packages, influence international politics and contribute to a sustainable global economy.

In both cases, the changes that will result from the new regulation are staggering. With the European Green Deal, the EU aims to achieve carbon neutrality by 2050, an objective that will imply a rapid shift away from highly polluting industrial processes and technologies.

In the case of the DSA/DMA Package, what is at stake is nothing less than revamping the way e-commerce and digital markets operate. The DSA and DMA will overhaul the rules on digital services in the EU, update the existing e-commerce framework and impose new rules on gatekeeper platforms, including GAFAMs such as Google, Apple, Facebook, Amazon and others.

The Digital Services Act and the Digital Markets Act are the largest regulatory legislative initiatives in terms of scope. The two main objectives stated by the EU Commission are both ambitious and straightforward:

  1. to create a safer digital space in which the fundamental rights of all users of digital services are protected;
  2. to establish a level playing field to foster innovation, growth, and competitiveness, both in the European Single Market and globally.

The Digital Services Act (DSA) lays down rules and obligations for online intermediary services:

  1. intermediary services offering network infrastructure (Internet access providers, domain name registrars),
  2. hosting services (cloud and webhosting services),
  3. online platforms bringing together sellers and consumers (online marketplaces, app stores, collaborative economy platforms and social media platforms),
  4. very large online platforms (reaching more than 10% of 450 million consumers in Europe).

 

The Digital Markets Act (DMA) applies to large, systemic online platforms considered as "gatekeepers". Such companies:

  1. have a strong economic position and a significant impact on the internal market, and are active in multiple EU countries;
  2. have a strong intermediation position (they link a large user base to a large number of businesses);
  3. have a durable position in the market.

Importantly, like the General Data Protection Regulation (GDPR), the DSA/DMA Package applies to companies established outside the EU as long as they provide services within the Union.

Sustainability as the key connecting element between two essentially parallel regulatory pathways

Sustainability is the connecting element at the intersection of the European Green Deal and the DSA/DMA Package. However, while the European Green Deal does refer to digital solutions, mentioning the use of AI, 5G, cloud and edge computing as tools that can help to maximise the impact of greening policies, the DSA/DMA digital rulebook does not make a direct reference to the European Green Deal and its objectives.

To exist and operate, the digital sector feeds on data, energy and natural resources, a reality that remains largely invisible to users. We do not physically see the amount of data generated and aggregated. Neither do we see the amount of energy, particularly electricity, needed to operate the digital world, and the carbon emissions associated to it. According to a report on the environmental impact of digital technologies by the think-tank on energy transition, The Shift Project (2019), these are responsible for 4% of total greenhouse gas emissions, similar to the amount produced, globally, by the airline industry. Beyond energy, digital technologies rely on minerals mining, rare earths extraction, coal-driven electricity production, carbon footprints from data centres, bitcoin mining, artificial intelligence, etc. (Wonder Alorese 2019). The increased use of and reliance on technology and data-powered digital platforms will lead to more greenhouse gas emissions and an acceleration of climate change.

Relying on technological evolution to fix those environmental issues, for example by producing cleaner electricity, improving the efficiency of servers, storage devices, data centre infrastructure, as well as a shift to much greater shares of cloud and hyperscale data centres (International Energy Agency 2017), or hoping that digital actors themselves will come up with solutions is not enough. Recent scientifical research shows that cloud management is becoming more energy efficient (Masanet, et al. 2020), but data use and our online lives on digital platforms are growing and seem not to have an end. Concrete efforts should be made to connect both digital and environmental agendas, intrinsically and operationally. Drawing from the proposals in the cited publication, the proposed DSA/DMA Package needs to establish mechanisms to quantify: (a) the efficiency of data center infrastructure, (b) the efficiency of the servers, and (c) the source of their electricity. When a company like Amazon claims that “with a total of 127 solar and wind projects, Amazon is now the biggest corporate buyer of renewable energy ever”, questions should be raised: how much of this is greenwashing? What of other large or smaller actors? What of other hidden environmental impacts? More importantly, what about the indirect environmental impact of Big Tech companies, whose IT tools are used by coal, oil, gas and other extractive companies or in downright anti-green industrial projects?

Beyond the direct, or internal, environmental cost of running platforms, discussed above, the DSA and DMA should also address the external impacts, understood as the environmental consequences of people and companies using digital platforms to work, shop, interact with the world, communicate or simply buy food. There is a need to understand not only the environmental but also the social sustainability of online platforms, including for example the situation of platform or gig-workers. The Covid crisis has accelerated online consumption, which directly increases the volumes of parcel deliveries, packaging waste or e-waste. Useful research projects have been conducted to assess the impact of platforms in certain sectors, for example food delivery platforms, but the EU Commission should conduct more in-depth and transversal research on such domains.

There is a window of opportunity to address the above and the next steps are crucial. There is an opportunity for the EU Parliament and the Council to better connect both strategies, before the DSA/DMA Package becomes fully active in two years.

Another connecting element: reshaping Europe and maybe the world

Both the European Green Deal and the DSA/DMA Package will reshape the EU, through regulation: the DSA/DMA package will change the way European citizens and businesses use the internet. The EGD will transform the environment they live in. With greening strategies also on the agenda of the USA, China and others, the change to our physical environment will be global. Will there be a similar change to our  virtual environment? The answer is yes: the DSA/DMA package, applicable to 450 million individuals, will have a sizeable regional pull and, given the extra-EU territorial nature of the rules, will have an impact beyond the borders of the EU. The reshaping of both its physical and virtual environment may result from the realization by the EU that it can and should act as a world leader. The EU is opening two doors and inviting other world powers to follow its lead. Time will tell if it succeeds in reshaping the world to its image.

Photo credits durupong

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