Proposal: On the 24th of January 2024, the European Commission published a Proposal⁴ for a Regulation amending Regulation (EU) 2021/1173 as regards an EuroHPC initiative for start-ups to boost European leadership in trustworthy Artificial Intelligence (press release⁵).

Problem: The significant computing power required by artificial intelligence (AI) models, cannot be accessed independently by European start-ups. Consequently, there is a need for a robust infrastructure to support the training and fine-tuning of advanced AI models. Furthermore, ensuring the EU's competitiveness in AI and addressing the strategic importance of high-performance computing are critical.

Objective: Correspondingly, the regulation aims to facilitate the use of the Union’s supercomputing capabilities by innovative start-ups to unlock AI’s full potential, ensuring the continuous enhancement of these supercomputers. The Proposal addresses this by amending the existing framework to include an additional objective for the European High Performance Computing Joint Undertaking. This involves deploying AI-dedicated supercomputers to support the AI ecosystem, providing extensive computational resources for start-ups and researchers.

Subject Matter: Supercomputers are specifically designed to handle the training of large-scale, general-purpose AI models and emerging AI applications. By incorporating these specialised supercomputers, the Regulation aims to provide a robust infrastructure that can support the high computational demands of modern AI research and development. Moreover, these AI-dedicated supercomputers will be co-located with large data centres or connected via very high-speed networks, thereby enhancing their performance and accessibility. Furthermore, the Regulation establishes the concept of AI Factories. These are centralised or distributed entities that provide an infrastructure composed of AI-dedicated supercomputers, data centres, dedicated access, and AI-oriented supercomputing services. The AI Factories will play a pivotal role in nurturing talent by attracting, pooling, and training individuals with the necessary skills to utilise these supercomputers effectively. Additionally, they will support the development, training, testing, evaluation, and validation of AI training models and systems. For example, they will assist in the development of AI applications in strategic areas such as health and care, climate change, robotics, and automated driving. Moreover, the Regulation addresses the need for enhanced collaboration and synergy between different AI initiatives within the Union. The AI Factories will interact and cooperate with other relevant Union AI initiatives, such as the Artificial Intelligence On-Demand platform, the AI Testing and Experimentation Facilities, the EuroHPC Competence Centres, and the EuroHPC Centres of Excellence. This collaboration is intended to ensure a coherent and integrated approach to AI development across the Union, thereby maximising the impact and efficiency of these initiatives. Correspondingly, the Regulation includes measures to facilitate the efficient use of existing EuroHPC supercomputers. It allows for the timely upgrading of these supercomputers to enhance their AI capabilities, ensuring that they remain at the cutting edge of technology and continue to meet the evolving needs of AI research and development. This includes provisions for upgrading the capabilities of existing supercomputers rather than acquiring new ones, thereby maximising the return on investment and ensuring cost-effectiveness. Additionally, the regulation proposes specific access conditions for AI-dedicated supercomputers and EuroHPC supercomputers upgraded for AI capabilities. These conditions are designed to cater to the specific needs of the AI start-up and research ecosystem. For instance, there will be dedicated access for start-ups and a focus on supporting the development of trustworthy and ethical AI models, systems, and applications that align with EU values.

Legislative procedure completed: On the 13th of November 2023, the proposal for a Regulation establishing a framework for ensuring a secure and sustainable supply of critical raw materials and amending Regulations (EU) 168/2013, (EU) 2018/858, 2018/1724 and (EU) 2019/1020 was adopted. (press release⁶). The agreed benchmarks state that the EU should be able to extract 10 per cent of its annual consumption of strategic raw materials, process 40 per cent and recycle 25 per cent by 2030.

Proposal: On the 16th of March 2023, the European Commission published a Proposa⁷l for establishing a framework on ensuring a secure and sustainable supply of critical raw materials and amending Regulations (EU) 168/2013, (EU) 2018/858, 2018/1724 and (EU) 2019/1020 (press release⁸).

Problem: The EU relies almost exclusively on large concentrations of imports for critical raw materials (CRMs) from a few third countries. These imported CRMs are necessary for sectors like renewable energy, digital industry, space and defence as well as health, therefore, making them essential for EU strategic targets. A disruption in the supply of CRMs would mean jeopardising the single market and EU global-competitiveness.

Objective: With a focus on non-energy and non-agricultural raw, this proposal has four main objectives. Firstly, it should strengthen different stages of the European CRM supply and value chain from extraction to recycling. Secondly, it should diversify the EU’s imports of CRMs and reduce strategic dependencies on imports. Thirdly, the proposal should improve the EU capacity to monitor and mitigate risks in CRM supply disruptions. Lastly, through the improvement of circularity and sustainability, the free movement of CRMs on the single market should ensure a high level of environmental protection. This proposal is consistent with the European Green Deal strategy and the European Climate law.

Subject Matter: To begin with, the proposal endorses the creation of a periodically updated list of strategic raw materials and CRMs of high importance for the EU economy. The Commission has suggested a list of benchmarks that aim to: (1) increase the capabilities of the Union at different levels, (2) increase the recycling of strategic raw materials, and (3) reduce dependencies of the EU on a single country for some raw materials. To diversify the supply chain the Commission proposes mutually beneficial Strategic Projects in third countries with emerging markets and developing economies. The EU will also establish a Critical Commodities Club for all like-minded countries willing to develop global supply chains, strengthen the World Trade Organisation (WTO) and expand its network of sustainable investment promotion and free trade agreements. Regarding sustainability, all new projects concerning raw materials should include objectives that ensure environmental protection and socially responsible practices. For recycling, the proposal lays a focus on metals as CRMs that are endlessly reusable. This offers the potential to move to a circular economy within the green transition, since recycling diminishes the need for primary extraction. Cooperation and communication among member states is encouraged by this proposal. Member states are asked to develop a national authority responsible for the aforementioned projects to reduce complexity and increase EU-wide efficiency. This competent national authority should be provided with sufficient personnel and resources. Both member states and the Commission is to assist in providing access to financial and administrative support. Lastly, the proposal focuses on how member states should promote the recovery of CRMs from extractive waste. In addition to Union cooperation, the proposal advises coordination and collaboration with industry and key private stakeholders. Large companies should aid the objectives of this proposal by auditing their supply chains and reporting accordingly to their board of directors. This can enable the development of mitigation strategies for supply risks.

Non-legislative Act: On 12th of September 2023 the European Commission published a Communication⁹ on a SME Relief Package (press release¹⁰).

Problem: Small and medium-sized enterprises (SMEs) face significant uncertainties, supply constraints, labour shortages and not always fair competition. Volatility and the unpredictability in the current economic context make it difficult for SMEs to do business. In 2021, they faced steep difficulties in hiring new staff to meet a strong rebound in demand. In addition they were faced higher energy costs brought about by the Russian war of aggression against Ukraine, while rapidly increasing raw material prices have put even more pressure on small businesses. Rising interest rates also made it more difficult for SMEs’ access finance more onerous.

Objective: With the SME Relief Package, the European Commission aims to provide short-term relief, boost long-term competitiveness and resilience of SMEs, and foster a fair and SME-friendly business environment. The package aims to help consolidate the recovery of SMEs and tap their full potential so that they can continue to contribute to Europe's long-term prosperity. The package is intended to help reduce reporting requirements, simplify taxes and promote liquidity and the internationalization of SMEs.

Subject Matter: According to a Eurobarometer survey, administrative burdens or regulatory obstacles are among the biggest problems for 55 percent of SMEs, which is why the Commission is seeking to significantly reduce administrative costs. The aim is to fully exploit the potential of the "one in, one out" approach, which ensures that administrative costs are offset in a given policy area. In addition, member states have a key role to play in ensuring that national legislation, including measures to implement EU law, supports the "Think Small First" principle and reduces the administrative burden on SMEs. Furthermore, the Commission is working with member states to ensure that online procedures and the "Once Only Technical System (OOTS)" are introduced. This should enable the cross-border exchange of important documents between public administrations and prevent SMEs from having to resubmit documents in different member states. In general, further digitization measures, such as the pilot project on the European Social Security Pass (ESSPASS), are to be introduced to facilitate interaction between mobile citizens and businesses operating abroad, in particular SMEs, with national social security authorities. Also, the creation of an electronic format (e-Declaration) for the declaration of posting of workers should significantly reduce the administrative burden and compliance costs for employers. Overall, the use of digital tools and procedures in EU company law is also to be expanded. An EU company certificate and the application of the single entry principle when setting up branches and subsidiaries in other member states are expected to reduce administrative burdens for companies by an estimated 437 million Euros annually. Overall, 90 percent of SMEs are expected to achieve a basic digital identity by 2030, with the Digital Decade Policy Programme. SMEs are also expected to have access to a wide range of financial support through SME support under EU funding programmes, which is expected to reach more than 200 billion Euros by 2027. All in all the Relief Package includes a proposal for a late payment Regulation, a proposal for a Directive on tax simplification for SMEs, and a set of measures to make it easier for SMEs to operate, improve their access to finance and skilled workforce, and to support them throughout their lifecycle.

Proposal: On the 12th of September 2023, the European Commission published a Proposal¹¹ for a Regulation on combating late payment in commercial transactions (press release¹⁰).

Problem: Due to asymmetries in bargaining power between a large client (debtor) and a smaller supplier (creditor) and because of inadequacy of the current EU legal framework, the Directive 2011/7/EU, there is a practice of late payment that particularly affects the cash flow of small and medium-sized enterprises (SMEs) and weakens the competitiveness and resilience of supply chains in the EU. This problem not only affects the liquidity and financial stability of companies, but also inhibits growth and innovation. Furthermore, current mechanisms to address this problem have proven to be insufficient, resulting in a fragmented and inconsistent approach across Member States.

Objective: The proposed Payment Directive aims to address the shortcomings by improving the payment discipline of all stakeholders (public authorities, large companies and SMEs) and protecting businesses from the negative effects of late payments in commercial transactions. This is to be achieved by introducing a comprehensive and harmonized set of rules. SMEs in particular account for 99 percent of European businesses and are therefore a key driver of environmental and digital transformation in Europe. The aim is to ensure that all Member States have minimum rules to prevent late payment, effective enforcement and deterrence measures, and appropriate remedies.

Subject Matter: Every year, around 18 billion invoices are issued in the EU. Reliable payment flows are therefore necessary to strengthen the competitiveness of the EU economy and SMEs in particular. The new regulation aims to replace the current inadequate EU legal framework, the Late Payments Directive from 2011. The new regulation aims to introduce a stricter 30-day payment cap for B2B transactions, thereby removing existing ambiguities and exceptions. A maximum period of 30 days (with no exceptions) is also to apply to review or acceptance procedures. If this is not complied with, then interest on arrears is to be charged automatically, thus abolishing the concept of "entitlement". In addition, there is to be a flat fee compensation owed for each late transaction. The compensation is to be 50 Euros to reflect inflation. To enforce the law, EU member states are to designate bodies empowered to impose administrative sanctions and publish the names of violators. In addition, EU member states are to commit to establishing a national system of mediation to solve payment disputes in commercial transactions and to address the question of unfair contract terms and practices through their national law. In addition, EU member states should promote the availability of credit management and financial literacy training, including digital payment tools for SMEs. In addition, the proposal emphasizes the importance of using digital tools for effective enforcement and ensuring that credit management tools and financial literacy training are available and accessible to SMEs.

Non-legislative Act: On the 11th of July 2023, the European Commission published a Communication¹³ on an EU initiative on Web 4.0 and virtual worlds: a head start in the next technological transition (press release¹⁴).

Problem: The transition to Web 4.0, marked by a seamless interconnection of everything, poses significant challenges and opportunities for the European Union. Virtual worlds, as a crucial element of this transition, have become technically and economically viable due to rapid technological advancements and improved connectivity infrastructure. However, this transition also brings risks that need addressing, highlighting the need for a comprehensive approach to manage the impact of virtual worlds on Europe's Digital Decade.

Objective: Web 4.0 and virtual worlds should be shaped in a way to reflect EU values, principles, and fundamental rights. The aim is to create an environment where individuals can feel safe, confident, and empowered, with their rights as users, consumers, workers, or creators being respected. The Commission seeks to foster a Web 4.0 that leverages open, distributed technologies and standards for interoperability between platforms and networks, ensuring freedom of choice for users. Emphasis is placed on sustainability, inclusion, and accessibility as core components of technological developments. The initiative aims to harness the EU’s Single Market, cultural diversity, strong industrial base, and robust legislative framework to drive Europe’s leadership, competitiveness, and technological sovereignty in this rapidly evolving field.

Subject Matter: Economically, virtual worlds present significant opportunities for industrial ecosystems in the EU. The advancement of virtual worlds is expected to foster intelligent, resilient, and connected operations across industries. It will also provide spaces for creation and monetization of content and innovative business models, especially in sectors like automotive, advanced manufacturing, and logistics. The EU’s legislative framework, such as the Digital Services Act, Digital Markets Act, and the General Data Protection Regulation, will continue to apply and evolve to support this transition. Three key actions are proposed in the Communication. Firstly, the support of skill development for virtual world technologies focuses
on enhancing the skills and capabilities required to engage with and develop virtual world technologies. A special emphasis is placed on promoting inclusivity by targeting skill development initiatives towards women, girls, and creators of digital content. Secondly, promoting guiding principles for virtual worlds underscores the importance of developing virtual worlds that are safe and beneficial for all users, with a particular focus on the health and well-being of children. The principles cover various aspects like freedom of choice, sustainability, transparency, and inclusion. The Commission plans to support research through programs like Horizon Europe to study the impact of virtual worlds on mental and physical health, especially in children, to ensure that virtual environments are conducive to users' well-being. Thirdly, developing a 'Virtual Worlds Toolbox' aims to provide the general public with comprehensive guidelines on how to navigate virtual worlds safely and responsibly. This toolbox will include resources and information on managing virtual identities and assets, ensuring data protection and privacy, understanding consumer rights, and staying secure in the face of cybersecurity threats. It will also address the challenge of online disinformation by providing tools for content verification and empowering users to become creators of trustworthy information. The EU plans to support flagship projects like the European CitiVerse and the European Virtual Human Twin to enhance public services through virtual worlds. Finally, the governance strategy includes establishing expert groups and forums to facilitate sharing of best practices and address the challenges and opportunities of virtual worlds and Web 4.0.

Proposal: On the 27th of April 2023, the European Commission published a Proposal¹⁵ for a Regulation on compulsory licensing for crisis management and amending Regulation (EC) 816/2006 (press release¹⁶).

Problem: Patent rights are fundamental in supporting EU innovation and creating an investment-conducive environment. However, the pandemic highlighted the need to strike a balance between preserving patent rights and ensuring swift access to crucial health products and technologies during crises, even when voluntary agreements are absent. This scenario has underscored the importance of an effective mechanism like compulsory licensing, which allows governments to permit third parties to use a patent without the authorisation of the rights-holder under specific conditions. These conditions are pivotal in complementing the EU's efforts to improve its resilience to crises, ensuring access to essential products, particularly when voluntary agreements are not available or suitable.

Objective: The primary objective of this initiative is to establish an efficient compulsory licensing scheme within the Internal Market for effective crisis management. This scheme aims to enable the European Union to rely on compulsory licensing in the context of EU crisis instruments. It intends to introduce a system that provides a swift and appropriate response to crises while ensuring the free movement and supply of critical products subject to compulsory licensing within the Internal Market. The scheme is designed to complement existing EU crisis instruments and adhere to international obligations, reflecting a dual role: incentivising voluntary agreements and enabling the manufacturing of necessary products in the absence of such agreements. It emphasizes safeguarding intellectual property rights while ensuring timely access to crisis-relevant products.

Subject Matter: The procedure for initiating a Union compulsory licence includes public notification in the Official Journal of the European Union and consultations with relevant advisory bodies. The Commission, aided by these bodies, strives to identify the necessary intellectual property rights and rights-holders. In urgent cases, licences can be initially granted based on the non-proprietary name of the product, with a commitment to identify all relevant rights and holders as soon as possible. The Regulation also specifies the content of the Union compulsory licence. It must include information about the intellectual property rights involved, the rights-holder, the licensee, and the crisis-relevant product. Furthermore, the licensee is obliged to pay adequate remuneration to the rights-holder, determined by the Commission. This remuneration should consider the economic value of the exploitation, any public support received by the rights-holder, the extent of amortization of development costs, and humanitarian circumstances. Significantly, the Regulation mandates that products manufactured under a Union compulsory licence are strictly for the internal market, prohibiting their export. Customs authorities are tasked with ensuring compliance with this rule, using risk analysis to identify and control the distribution of such products. Moreover, the document stipulates a relationship of good faith between the rights-holder and licensee, expecting both parties to work towards the successful implementation of the Union compulsory licence. The Commission may intervene to facilitate this cooperation and ensure the licence fulfils its objective. The Commission is also authorized to review and adapt the conditions of the Union compulsory licence to changing circumstances. This includes the possibility of terminating the licence if the conditions that warranted its issuance no longer exist or if the licensee fails to comply with the obligations. To enforce compliance, the Commission can impose fines and periodic penalty payments on both the rights-holder and the licensee for failures in fulfilling their obligations under the regulation.

Non-legislative Act: On the 16th of March 2023, the European Commission published a Communication²¹ on the Single Market at 30 (press release²²).

Problem: The Single Market celebrates 30 years in 2023. With its achievements in the fields of freedom, opportunity, and geopolitics, the Single Market benefits European citizens beyond economic welfare. As internal and external challenges continue to grow, the Single Market requires more resilience and cooperation. These challenges should specially target long-term competitiveness and productivity.

Objective: The Single Market must meet citizens’ needs for sustainable and affordable consumer choices, while working together with digital tools to promote these alternatives. Two key areas need further action: (1) the application of current Single Market rules and the elimination state-level hurdles and (2) the sustenance of green and digital dimensions. This Communication should serve as a regulatory framework for the aforementioned areas.

Subject Matter: Working together with digital tools reduces administrative challenges and increases transparency. On one hand, the Digital Services Act will improve the operability of online businesses throughout the EU, pursuing issues of fraudulent and illegal distribution within e-commerce. On the other hand, the Digital Markets Act will tackle fairness, plurality, and equality. The Internal Market Information System improves cross-border communication and access to information. Additionally, the Once Only Technical System will ensure that businesses and people efficiently and digitally transfer paperwork through the Single Digital Gateway. The European Digital Identity Wallet should further improve the effectiveness of the Unions communication and information system. Concerning enforcing Single Market rules, the 2020 Single Market Enforcement Action Plan deals with issues of freedom of establishment, free circulation, public procurement rules, payments, and application of EU standards. The Commission is closely monitoring infringement cases and working to close them.

Proposal: On the 29th of March 2023, the European Commission published a Proposal²³ on amending Directives 2009/102/EC and (EU) 2017/1132 as regards further expanding and upgrading the use of digital tools and processes in company law (press release²⁴).

Problem: Company information required by stakeholders is not sufficiently available in neither domestic nor EU-wide registers. In this regard, acute data on central administration, representatives, principal places of business, and company groups is missing. Furthermore, EU company law is not specific enough on standards for the reliability of company information, leading to inadequate trust in the information that is accessible. Lastly, administrative barriers for the direct use of company information lead to inefficiencies in cooperation and coordination of Union objectives.

Objective: The central goal of this proposal is a more integrated and digitalised single market with enhanced transparency and trust in the business environment. It aims to increase the reliability and scope of data available in registers, such as the Business Registers Interconnection System (BRIS). Additionally, the proposal seeks to enable cross-border use of the registered information in an effort to unify the Union’s mission towards achieving its digital targets.

Subject Matter: With the help of the Directive (EU) 2017/1132 and its amendment to Directive (EU) 2019/1151 that aim to improve digital connectivity and administration of businesses, this proposal should facilitate the relationship between commercial enterprises and business registers/authorities. This relationship should be improved to ease administrative hurdles so that all stakeholders have direct access to reliable information about companies. The proposal highlights the necessity for cooperation among member states for transparency and the availability of reliable company data. This cooperation comes to light, e.g. when states are asked to carry out checks to ensure accurate and up-to-date information with the same standards. To cut costs and organisational troubles, the ‘once-only’ principle should be extended to include company law, meaning that companies should not be asked to submit information to public authorities more than once. Ideally, information should be exchanged digitally between companies and registrars. The information to be disclosed includes: the place of central administration and business, ‘commercial partners’, subsidiary companies of parent companies, legal representatives, etc. Moreover, in the single market, companies should be able to prove that their company is legally incorporated in a Member State through simple and uniform means. In this regard, the proposal suggests the development of a harmonized EU Company Certificate with essential company information to be used even in cross-border situations. Furthermore, to ease EU-wide procedures a solely digital EU power of attorney should be established. When it comes to administrative procedures, the Commission suggests that member states do away with legalisation and similar formalities are done away with when company information is retrieved through registers. Lastly, seeing as company information will be stored in machine-readable and searchable format, machine translations of the data provided will be made easier, further reducing the need for formal certified translations. The proposed measures will apply to around 16 million corporations and 2 million partnerships in the EU.

Non-legislative Act: On the 29th of November 2023, the European Commission published a Communication²⁵ on the Creation of a common European mobility data space (press release²⁶).

Problem: Despite the generation of substantial data, often driven by requirements under the EU transport acquis, this data is scattered across various ecosystems, making accessibility challenging. This fragmentation hinders the effective utilisation of data-driven innovation, which is crucial for advancing towards a sustainable, smart, and inclusive mobility and transport sector. Furthermore, this situation impedes the EU's ability to fully harness the benefits of digitalisation in the mobility and transport sector, a vital component for the development of an interconnected, climate-neutral, and competitive transport sector in the EU.

Objective: The framework will facilitate the interconnection of various data-sharing frameworks and data ecosystems in the mobility and transport sector. These include waterborne and logistics, rail, intelligent transport systems, transport networks and infrastructure, automotive, aviation, and road transport and safety. Firstly, the European Mobility Data Space (EMDS) seeks to identify crucial data and enhance its availability, thereby supporting essential and value-added services that contribute to themes like sustainability and multimodality. Secondly, it aims to assist users in discovering available data sources, providing tools to understand data quality and access conditions, particularly in relation to personal data protection. Furthermore, the EMDS intends to facilitate easier data access, sharing, and reuse through the harmonisation of sharing conditions across different transport modes, ensuring fairness, transparency, and non-discrimination. Additionally, the EMDS aims to optimise data collection processes, reduce administrative burdens by identifying and addressing gaps in current data-collection arrangements, and make necessary adjustments in sectoral legislation. Lastly, it seeks to ensure interoperability with other common European data spaces, allowing for shared access and reuse of data in alignment with emerging EU data-related legislation.

Subject Matter: The European Mobility Data Space (EMDS) is a comprehensive framework designed to improve the management and utilisation of mobility and transport data within the European Union. This initiative does not intend to create a centralised database, but rather offers a framework for federating various transport-data ecosystems, which are often heterogeneous and difficult to access. The EMDS is based on a decentralised approach where data is maintained by public or private stakeholders at various levels, from the EU to regional and local entities. It is fully compliant with the EU transport acquis and is constructed on its principles. The framework of the EMDS encompasses both technical and governance dimensions. It includes building blocks, standards, an interlinking layer, and a governance structure. The participants in the EMDS comprise data providers, data users (including data intermediaries and data-altruism organisations), relevant marketplaces, and service providers. These participants aim to create value by offering, discovering, accessing, and using mobility and transport data across this extensive range of ecosystems. One of the key elements of the EMDS is to enable improved, faster, and more streamlined cross-border and cross-sectoral data access and sharing. This is expected to support the provision of EU-wide added value services. The framework should make it easier and quicker for EMDS participants to aggregate data from various sources and use this data for operations, thereby delivering high-quality services to businesses, consumers, and citizens. The EMDS is also aimed at facilitating data-sharing in a peer-to-peer relationship, gradually enabling more innovative mobility services and complex transactions in the transport sector. The EMDS also focuses on sustainable alternative fuels, logistics, and urban logistics. It aims to facilitate the discovery and merging of energy, vehicle traffic, infrastructure, and geospatial data, making it easier to combine data from different sources and enhance the efficiency of logistics and freight transport. The EMDS will be built on EU’s cross-sectoral data legislation, including the Data Governance Act, which increases trust in voluntary data-sharing and strengthens mechanisms to increase data availability.

Legislative procedure completed: On the 6th of March 2024, the Proposal for a Regulation laying down measures to strengthen solidarity and capacities in the Union to detect, prepare for and respond to cybersecurity threats and incidents] was adopted (press release²⁹). The Cyber Solidarity Act aims to enhance EU cybersecurity by establishing a European Cybersecurity Alert System and a Cybersecurity Emergency Mechanism. These measures facilitate swift detection, preparedness, and response to cyber threats and incidents. Additionally, the Act creates a European Cybersecurity Incident Review Mechanism to assess significant incidents post-occurrence. An amendment to the Cybersecurity Act allows for the adoption of European certification schemes for managed security services, ensuring reliability and transparency in procurement across the Union.

Proposal: On the 18th of April 2023 the European Commission published a Proposal³⁰ for a Regulation on laying down measures to strengthen solidarity and capacities in the Union to detect, prepare for and respond to cybersecurity threats and incidents (press release³¹).

Problem: In recent years, the use of information and communication technologies have become fundamental aspects of all economic sectors. At the same time, the number of cyberattacks has increased dramatically, and the threat of a possible large-scale attacks on critical infrastructure requires increased preparedness at all levels of the Union’s cybersecurity environment. Because these significant incidents could possibly exceed the capacities of a single affected member state, strengthened solidarity at Union level is demanded to better detect and respond to cybersecurity threats.

Objective: Building on first steps of collaboration at Union level through the Digital Europe Programme (DEP) and short-term additional funding allocated to the European Union Agency for Cybersecurity (ENISA), the regulation addresses shortcomings and insights from these actions to further increase solidarity between member states on cybersecurity. In line with the commitments of the Joint Cyber Defence Communication of 2022, the proposal aims to strengthen common EU detection, situational awareness and response capabilities.

Subject Matter: The objective of the regulation shall be implemented through three key actions. Firstly, a pan-European infrastructure of European Cyber Shields (SOC) shall be deployed. They are intended to advance the Union’s capabilities to detect, analyse and process data on cyber threats. The SOC infrastructure is formed by one designated National Security Operations Centre from each member state respectively, and Cross-border Security Operations Centres, designated by at least three member states. The national and cross-border SOCs shall exchange relevant information related to cyber threats with each other and relevant EU authorities. To this end, cross-border SOCs shall ensure a high level of interoperability between themselves. The European Cyber Shield shall be implemented and funded in accordance with the DEP regulation. Secondly, a Cyber Emergency Mechanism shall be created to improve the Union’s resilience to major cybersecurity threats. The Mechanism shall support member states in preparing, responding and recovering from significant cybersecurity incidents and shall be supported by funding under DEP as well. With regards to preparedness, actions under the Mechanism envisages the coordinated preparedness testing of entities operating in highly critical sectors. In the area of response actions, the regulation establishes an EU Cybersecurity Reserve, constituted by incident response services from trusted providers. Thirdly, a European Cybersecurity Incident Review Mechanism shall be established. To this end, ENISA shall review and assess threats, vulnerabilities, and mitigation actions on specific cybersecurity incidents at request. Finally, the Commission shall regularly evaluate the implementation and impacts of the regulation and report to the European Parliament and the Council.

Non-legislative Act: On the 4th of May 2023 the European Commission published a Recommendation³² on combating online piracy of sports and other live events (press release³³).

Problem: Live events, including sport matches, concerts, theater performances, game shows etc. nurture cultural creativity and breed a sense of community. For these reasons, they are a lucrative source of income for organizers and broadcasters. Through television and online media platforms, they have also become easily accessible to a digital audience. Piracy, i.e. in the form of unauthorized streams, of live events undermines their economic potential in contributing to economic growth and job creation within the Union. Due to a lack of comprehensive legal measures, action against the streaming of live events is either too slow or ineffective.

Objective: The objective of this Recommendation is to reduce the illegal (re)transmission or piracy of sports and other live events in an effort to protect stakeholders, especially those that hold broadcasting rights.

Subject Matter: This Recommendation tackles issues of piracy at the level of distribution and end-user consumption. Revenues deriving from illegal forms of content distribution are estimated at 522 million euros for 2019, a large proportion of the sum deriving from subscription fees to services relying on pirated media. In light of how quickly and effectively new piracy methods are developed and implemented, a monitoring strategy is needed i.e. to effectively combat the loss of revenue. While taking into consideration the online landscape, national authorities are tasked with removing and disabling unauthorized retransmissions of live events. The different technical means of tackling unauthorized streams include blocking and dynamic injunctions. Blocking injunctions can be applied through IP blocking or the Domain Name System (DNS). Dynamic injunctions have, thus far, only been used in a few member states. Due to its capacity for effectively combatting piracy by empowering administrative authorities or engaging courts, dynamic injunctions are highlighted as a key tool against the illegal retransmission of live events. A legal framework needs to be developed to enable responsible authorities to react quickly with a variety of tools for disabling unauthorized streams. In this regard, copyright infringements should be exploited. Concerning personnel dealing with illegal retransmissions, all persons should be adequately trained and educated. Furthermore, cooperation between member states as well as collaboration between organizers, rights holders, service providers, and advertisers is strongly encouraged. With regards to end-user consumption, piracy should be combatted by increasing the availability, affordability, and attractiveness of authorized transmissions of live events. By raising awareness for legal offers, end users may further be compelled to opt for legal streams.

Proposal: On the 23rd of February 2023, the European Commission published a Proposal³⁴ on measures to reduce the cost of deploying gigabit electronic communications networks and repealing Directive 2014/61/EU (Gigabit Infrastructure Act) (press release³⁵).

Problem: In 2013, the Commission proposed the Broadband Cost Reduction Directive (BCRD), the aim of which was to lower costs of implementing high-speed electronic communication networks. Since then, however, the technological landscape has been massively redefined, so substantial network investment is necessary to keep pace with increasing bandwidth demands.

Objective: This proposal aims to address BCRD deficiencies and contribute to the cost-efficient and apt rollout of very high-capacity networks (VHCNs). The proposal further supports efforts towards fixed and mobile connectivity targets, such as those outlined in the European Electronic Communications Code. In line with many other proposals, the Gigabit Infrastructure Act aims to reduce costs for access to 5G radio spectrum and facilitate access by satellite to remote areas. Notably, the current proposal carefully considers European Climate Law to ensure the twin digital and green transition.

Subject Matter: The Gigabit Infrastructure Act addresses issues of rapid technological evolution through numerous channels, such as, but not limited to, the development of physical infrastructure and the improvement of access to minimum information. The major costs for the implementation and deployment of VHCNs result from civil works. As a way to reduce these engineering work expenditures, sharing physical infrastructure has been made a central action point. Similarly, the physical infrastructure of public electronic communication networks could further be extended for accommodating elements of other networks. Along with public and private communication, such a development would build economies of scale, making the rollout of the Gigabit Infrastructure Act as smooth as possible. Additionally, reusing existing infrastructure, both public and private, would further lower expenses and have other external benefits. These benefits include the reduction of non-financial social and environmental costs (i.e. pollution, noise, traffic congestion, etc.). Furthermore, operators should have timely access to minimum information on physical infrastructure as a pre-requisite to assess its potential and coordinate plans for civil works. Moreover, single information points with access to georeferenced information on existing physical infrastructure and planned civil works should be incentivised and made digitally accessible. Lastly, member states and their relevant authorities should not make the deployment of VHCNs economically unattractive. Consequently, permits and rights should be granted in a timely manner, and member states should work on limiting the costs only to administrative fees. As it stands, measures to improve the accessibility to VHCNs vary greatly between member states. Cooperation between EU states could have the same benefits as synergies across different sectors (i.e. it could further reduce the need for civil works), and is therefore encouraged.

Legislative procedure completed: On the 2nd of March 2023 the European Commission published a Delegated Regulation³⁶ supplementing Regulation (EU) 2022/2065 of the European Parliament and of the Council with the detailed methodologies and procedures regarding the supervisory fees charged by the Commission on providers of very large online platforms and very large online search engines (press release³⁶).

Problem: The Digital Services Act Regulation entered into force in November 2022 and is intended to create a general legal framework for all intermediary services in Europe. It takes a graduated approach based on the scale of the services, so very large online platforms and very large online search engines are thus subject to the most comprehensive obligations. The Commission requires broad administrative powers for this reason, as it has primary responsibility for enforcing all obligations under the Act.

Objective: To meet oversight obligations, this supplemental regulation is intended to establish a detailed methodology and procedures related to very large online platforms and very large online search engines.

Subject Matter: The delegated regulation refers to procedures in four areas. First, it sets out the estimated costs incurred by the Commission in connection with the aforementioned supervisory tasks. Second, the regulation regulates the total amount of the annual supervision fee charged to the providers of the designated very large online platforms or search engines. Third, it fixates the maximum aggregate limit of the annual supervision fee charged by the designated providers. Fourth, details of the methodology for making the payment are determined.

Legislative procedure completed: On the 28th of November 2023, the Proposal for a Directive³⁷ (EU) 2023/2673 amending Directive 2011/83/EU as regards financial services contracts concluded at a distance and repealing Directive 2002/65/EC was adopted. The Directive amends existing EU directives to enhance consumer protection for financial services contracts concluded at a distance, including online transactions. It introduces requirements for clear pre-contractual information, establishes a right of withdrawal, and mandates transparency in marketing practices. Additionally, it aims to adapt regulatory frameworks to the digital age, ensuring legal certainty and fair market practices.

Proposal: On the 22nd of November 2023, the European Commission published a Proposal³⁸ for a Directive amending Directive 2011/83/EU as regards financial services contracts concluded at a distance and repealing Directive 2002/65/EC (press release³⁹).

Problem: The Directive addresses the impacts of digitalization and technological advancements on the financial services market. Specifically, it addresses the challenges posed by the progressive introduction of Union sector-specific legislation, which has resulted in significant overlaps with Directive 2002/65/EC. New developments also include the emergence of new financial products, particularly in the online environment, which continue to develop rapidly and unpredictably and to which it is necessary to respond.

Objective: The general aim is to establish and enforce robust regulations for the distance marketing of consumer financial services, ensuring a high degree of consumer protection in this sector. The Directives focus on harmonising the rules applicable to distance contracts for both goods and services, thereby contributing to the attainment of a high level of consumer protection as mandated by the Treaty on the Functioning of the European Union (TFEU) and the Charter of Fundamental Rights of the European Union.

Subject Matter: The Directive underscores the importance of harmonising consumer protection across the EU to ensure a high and equivalent level of protection for all consumers. This harmonisation aims to create a well-functioning internal market, with member states being restricted from maintaining or introducing national legislation that deviates from this Directive, except as provided within the Directive itself. Acknowledging the rapid technological advancements since the adoption of Directive 2002/65/EC, the document recognises the evolution and diversification of financial services, particularly online. It emphasises the relevance of this Directive in providing a harmonised set of rules that benefit both consumers and traders, thereby ensuring consumer protection and a level playing field among traders. The Directive proposes revisions to address overlaps with Union sector-specific legislation and aspects not fully addressed by previous directives, particularly concerning how and when information is provided to consumers Also, it discusses the extension of the scope of Directive 2011/83/EU to cover financial services contracts concluded at a distance, noting the need for clarity and legal certainty. It acknowledges the specific nature of consumer financial services, particularly their complexity, and suggests that not all provisions of Directive 2011/83/EU should apply to these contracts. Member states are required to establish rules on penalties for infringements of provisions in their national legislation adopted pursuant to this Directive. These penalties should be effective, proportionate, and dissuasive. The Directive specifies that where Union acts governing specific financial services provide for a right of withdrawal, only the respective provisions of those Union acts should apply and mandates that traders provide consumers with pre-contractual information in a clear, comprehensible, and timely manner, allowing consumers to make informed decisions. This information should include details about the trader, main characteristics of the service, total price, and the right of withdrawal. The Directive addresses the need for online fairness when financial services are contracted at a distance and prohibits traders from using dark patterns on their online interfaces, which could impair the autonomy and decision-making of consumers.

Legislative Act: On the 15th of September 2022, the European Commission published a Proposal⁴⁰ for a Regulation on horizontal cybersecurity requirements for products with digital elements and amending Regulation (EU) 2019/1020 (press release⁴¹).

Problem: A low level of cybersecurity provokes widespread vulnerabilities, particularly in light of the insufficient and inconsistent provision of security updates that address them. The lack of understanding, as well as of access to information by users, prevent them from choosing products with adequate cybersecurity properties or using them in a secure manner. Additionally, there are immense costs associated with an increasing number of cyberattacks on hardware and software products, particularly since a cybersecurity incident in one product can affect an entire organisation or a whole supply chain, often propagating across the borders of the internal market within a matter of minutes. Given that the current EU legal framework does not address the cybersecurity of non-embedded software, even if cybersecurity attacks increasingly target vulnerabilities in these products, causing significant societal and economic costs, an optimised EU legislation is needed.

Objective: Aiming to protect EU’s internal market, the Commission suggests the establishment of conditions that promote the development of secure products with digital elements. Hardware and software products shall be placed on the market with fewer vulnerabilities, while manufacturers shall follow a product’s security throughout its life cycle. Further conditions shall allow users to take cybersecurity into account when selecting and using products with digital elements. Specific objectives introduced by the Commission aspire to create a coherent cybersecurity framework, facilitating compliance for hardware and software producers. Moreover, the transparency of security properties of products with digital elements shall be enhanced, while businesses and consumers shall be enabled to use products with digital elements securely.

Subject Matter: The Regulation puts forward rules for the placing on the market of products with digital elements to ensure the cybersecurity of such products. It provides essential requirements for the design, development, and production of products with digital elements, and obligations for economic operators in relation to these products with respect to cybersecurity. Such requirements are to be introduced by manufacturers. Lastly, the new guidelines will address market surveillance and enforcement of the above-mentioned rules and requirements subject to this Proposal are all products with digital elements whose intended and reasonably foreseeable use includes a direct or indirect logical or physical data connection to a device or network.

Legislative procedure completed: On the 18th of April 2023 the European Parliament with the Council reached an agreement on the European Chips Act. The legislature is intended to strengthen the production of chips within the Union in order to reduce critical dependencies on third countries in the sector. Consequently, the act envisages doubling the EU's global market share to 20 per cent by 2030 (press release⁴⁴).

Proposal: On 8th of February 2022, the Commission presented a Proposal⁴⁵ for a Regulation establishing a framework for actions to strengthen the European semiconductor ecosystem (press release⁴⁶).

Problem: Digitalisation is moving into all areas of life. This increases the need for semiconductors in particular, whose demand is currently greater than the market, however, with supply bottlenecks additionally lead to a shortage of availability. The shortage of semiconductors is having a serious impact on industrial companies worldwide. Many European sectors, including automotive, energy, communications and health, and strategic sectors such as defence, security and space are threatened by such supply shortages. At the same time, counterfeit chips are appearing on the market, threatening the security of electronic devices and systems. The semiconductor shortage has exposed structural weaknesses in the European value chain and Europe's dependence on third countries. Despite its strong global position in the production of materials and equipment, the Union is heavily dependent on third country suppliers for the design, manufacture, packaging, testing and assembly of chips.

Objective: The proposal aims to achieve the strategic objective of increasing the resilience of the European semiconductor ecosystem and its global market share. The proposal also aims to facilitate the early introduction of new chips by the European industry and increase its competitiveness. To achive this, the European chip industry needs to attract investment in innovative production facilities and have a skilled workforce, but also be able to design and manufacture state-of-the-art chips. The objectives of the Regulation are summarised in three pillars: 1. "Chips for Europe Initiative", 2. "Security of supply" and 3. "Monitoring and crisis response".

Subject matter: To implement the objectives, the "Chips for Europe" initiative will support large-scale technological capacity building and innovation, in particular in the form of an innovative virtual design platform that will foster collaboration between user communities and the development sites. The initiative will also develop pilot prototyping facilities and establish a network of competence centres to support stakeholders with sufficient expertise. A chip fund will be established to increase the availability of funds to support growth and investment along the entire semiconductor value chain.
To ensure security of supply, investments will be driven and improved production capacity in semiconductor manufacturing and advanced packaging, testing and assembly will be ensured through first-of-a-kind Integrated Production Facilities and Open EU Foundries. In addition, jointly developed standards and certifications will identify sector-specific requirements for trustworthy chips to ensure cybersecurity.
The creation of a coordination mechanism between the member states and the Commission is intended in particular to monitor the semiconductor value chain and to enable rapid responses to disruptions in the supply of semiconductors by means of a crisis-stage system.

Non-legislative Act: On the 15th of February 2022, the European Commission published a Communication⁴⁷ on a roadmap on critical technologies for security and defence (press release⁴⁸).

Problem: In light of technological advances, it is imperative to remain in the forefront of technological development, ensuring that Europe's security and defence sectors remain technologically fit for purpose. Due to the fragmentation of Europe’s security and defence capabilities, economic inefficiencies, reduced operational capacity and increased strategic dependencies have been recognised. Thus, in order to accelerate innovation across domains and foster technological sovereignty in the security and defence sectors, better exchange between civilian and defence research and innovation communities are required.

Objective: The primal objective of the Communication is to develop the future European security and defence technological and innovation landscape under EU cooperative frameworks from the outset. To do so, it is necessary to identify technologies critical for EU security and defence, boosting them through European (RTD&I) programme. Moreover, in civilian European RTD&I programmes and industrial and trade policies, defence considerations shall be better taken into account, while possible civilian uses of technologies are also better considered in defence RTD&I programmes. An EU-wide strategic and coordinated approach for critical technologies for security and defence shall make the best use of EU and Member States’ RTD&I programmes, achieve synergies between civilian and defence RTD&I communities and mitigate strategic dependencies from external sources. Lastly, cooperation and coordination with strategic partners such as the United States and the North Atlantic Treaty Organization (NATO), under mutually beneficial conditions is recommended.

Subject Matter: In 2022, the Commission is planning on establishing an expert group that shall facilitate exchanges with member states on critical technologies, value, and supply chains. A study on the EU security market shall serve to better understand the specific features of the civil security market, to support the identification of critical technologies and strategic dependencies, and to underpin the new capability-driven approach for security and other RTD&I activities. Member states are encouraged to commit in the Strategic Compass to developing an EU-wide strategic coordinated approach for critical technologies relevant for security and defence from the outset. Furthermore, in 2023, the Commission will review existing EU instruments and propose further ways to encourage dual-use RTD&I at EU level. The Commission in cooperation with the member states will work on a report on the need for risk-assessing supply chains of critical infrastructure, in particular in the digital domain, to better protect the EU’s security and defence interests. All remaining member states are invited to set up a national FDI screening mechanism. Ultimately, the Commission and the High Representative will, in coordination with NATO, examine ways to promote a mutually agreeable and beneficial interactions between their respective relevant initiatives.

Legislative procedure completed: On November 18, 2022, the European Parliament and EU Member States reached an agreement on a Regulation originally proposed by the European Commission in February 2022 (press release⁴⁹). The consensus on the establishment of a new space infrastructure, the so-called EU satellite system “IRIS²” (Infrastructure for Resilience, Interconnectivity and Security by Satellite — Infrastructure for Resilience, Interconnectivity and Security by Satellite), is intended to increase cyber insecurity in the coming years.
The European Parliament and the Council of the European Union have yet to adopt the agreement. Given the current circumstances, the development of a sovereign, autonomous and secure connectivity infrastructure is vital. The EU's space-based secure communications system shall meet increased and changing government requirements, avoid dependencies on third countries, and strengthen the resilience of its value chains.

Proposal: On the 15th of February 2022, the European Commission published a Proposal⁵⁰ for a Regulation establishing the Union Secure Connectivity Programme for the period 2023-2027 (press releas⁵¹e).

Problem: In light of increasing hybrid and cyber threats in addition to current trends of natural disasters, governmental actors strive for higher security, reliability and availability of commensurate satellite communication solutions. There is a global demand for governmental services to provide a resilient connectivity that not only assists their security operations, but further connects critical infrastructures, manages crises as well as supports border and maritime surveillance. Although there are existing committed satellite communication capacities providing governmental services at the disposal of the member states, they are all based on a reduced number of GEO assets, covering mainly Europe. Moreover, the satellites in place are dedicated to military missions, thus, they are tailored to meet specific military needs and cannot be used in most civilian governmental applications. The lack of an operational or in-the-making EU assets in low Earth orbit (LEO) or medium Earth orbit (MEO) that meets the evolving governmental user needs requires an EU space-based secure connectivity system that covers the capacity and capability gaps for governmental satellite communication services.

Objective: Primarily, the Regulation peruses to inaugurate a Union secure satellite communication system to stimulate worldwide secure, flexible and resilient satellite communication services to the Union and member states governmental entities. On the long-term, the worldwide uninterrupted access to secure and cost-effective satellite communication services to governmental users shall be ensured. Developing a multi-orbital connectivity infrastructure shall continuously be adapted to evolution of demand for satellite communications. The satellite communication system will contribute to cyber resilience by proactive and reactive defence against cyber and electromagnetic threats and operational cybersecurity, as well as integrate the space and related ground segment of the European Quantum Communication Infrastructure. Additionally, current capabilities and services of other components of the Union Space Programme shall be improved, while the development of innovative and disruptive technologies shall be incentivised. Lastly, the Commission encourages further development of high-speed broadband and seamless connectivity throughout the Union, removing communication dead zones and increasing cohesion across member state territories.

Subject Matter: It is up to the Commission to ensure the implementation of the system, including in the field of security, without prejudice to Member States’ prerogatives in the area of national security. The European Union Agency for the Space Programme shall ensure the operational security of the governmental infrastructure, including through risk and threat analysis, security monitoring. It will be responsible for the provision of governmental services, the management of the concession or mixed contract as well as the overarching coordination of user-related aspects of the governmental services in close collaboration with member states, relevant Union agencies, EEAS and other entities. The European Space Agency (ESA) shall develop and validate activities within the frame of implementation contracts, and be responsible for the provision of technical expertise to the Commission as well as the evaluation of the implementation contracts.

Non-legislative Act: On the 15th of February 2022, the European Commission published a Joint Communication⁵² on an EU Approach for Space Traffic Management and an EU contribution addressing a global challenge (press release⁵¹).

Problem: Given the growing volume of space debris and the exponential, there is an increase of space traffic overcrowding the space. Thus, the viability and security of space infrastructure and operations are progressively threatened. Routine operations in orbit are at risk every single day, posing a direct threat to the safety and security for orbital traffic and space sustainability. Potential repercussions from incidents can destabilize certain orbits for decades to come; and as a direct corollary, severely compromise or lead to failure of space operations. Key infrastructures such as communications, civil protection and emergency response are, therefore, at risk of disruption. Such developments can directly impact the security, safety, economy, and well-being of European citizens. The lack of an international regulatory framework prompts public and private initiatives to address safety of space operations. Accordingly, the Commission appeals to EU’s agencies to act now, swiftly, collectively and resolutely.

Objective: In the Joint Communication a concrete EU approach on STM for a safe, sustainable and secure use of space is introduced. One that preserves EU interests in full compliance with the respective competences of the EU and its member states. The Space Traffic Management (STM) shall contribute to the security and defence dimensions of the EU in space. In order to enhance the resilience of space infrastructure, including those satellites supporting defence and security applications, the risk of in-orbit collision shall be decreased. Promoting a global STM approach shall contribute to transparency and confidence building in general, as well as help avoid misunderstandings and deescalate tensions in case of incidents.

Subject Matter: Presenting ten specific fields of action, the Communication allows a guideline for future operations. Such include the promotion of a regional approach on STM with third countries and relevant regional fora partners, as well as further engagement with the US to promote closer cooperation and mutual interoperability on STM related matters. In 2022, a consultation mechanism with all relevant EU stakeholders will be inaugurated by the Commission and the High Representative. The mechanism shall allow a regular dialogue on STM-related developments covering both civilian and military needs. An architecture analysis of the future STM needs including identification of the necessary resources for a more efficient and performant EU SST system is planned for 2023. By 2025 start the deployment of additional assets will begin. The Commission, in coordination with the EU SST Partnership, will, by 2023, make parts of the data sharing platform more attainable and, by 2025, parts of the future EU SST catalogue. In cooperation with the member states, the Commission and the High Representative will establish the necessary forum to ensure that effective information and coordination regarding the standards and guidelines developed at the international level is in place in the EU. Finally, the Commission and the High Representative, in collaboration with the member states shall engage with the UN to identify or help create specific bodies for STM with a view to implementing concrete STM solutions at global level.

Non-legislative Act: On the 23rd of November 2023, the European Council published a Recommendation on the key enabling factors for successful digital education and training (press release⁵³).

Problem: There is a need for more ambitious action to develop the skills necessary for the green and digital transitions through education, training, upskilling, and reskilling. This need arises in response to the challenges of labour shortages and job transformation, exacerbated by demographic changes. The COVID-19 pandemic further highlighted the urgency to improve the digital readiness of education and training systems in terms of resilience, justice, equality, quality, inclusiveness, accessibility, and security. Rapid technological change demands a people-centred digital transformation in education and training systems, making them fit for the digital age. This transformation is essential to ensure a cohesive, equal, inclusive, sustainable, competitive, innovative, and resilient Europe, where citizens are well-equipped for personal development, well-being, active citizenship, and adaptability in a changing labour market.

Objective: The Recommendation aims to foster the development of a high-performing digital education ecosystem. The system is designed to promote personal, social, and professional fulfilment of citizens while upholding democratic values, equality, social cohesion, active citizenship, intercultural dialogue, sustainable economic prosperity, and employability. This involves strengthening digital capacity and resilience in education and training systems in a coherent and sustainable manner. Key enabling factors, such as relevant infrastructure, connectivity, and digital capacity, have been identified and are crucial for achieving this goal.

Subject Matter: The Recommendation calls for enabling factors such as relevant infrastructure, connectivity, and digital capacity, and stresses the importance of a whole-of-government approach and the involvement of various departments responsible for different aspects of digital education, training, and skills. The Recommendation emphasizes the importance of digital education for every European citizen to develop the knowledge, skills, and competences needed for active participation in increasingly digital societies. It aligns with the Digital Decade Policy Programme 2030, aiming for inclusive human-centred digital transformation of the EU’s society and economy by 2030. This includes achieving universal connectivity and promoting efforts to equip all education and training institutions with digital connectivity infrastructure and tools. It is essential to support education and training institutions, teachers, trainers, and other education staff in understanding and safely using tools like artificial intelligence, and to be aware of the implications of relevant Union legislation in the digital domain. Suggestions include promoting capacity building, using self-assessment tools like SELFIE, supporting leaders in implementing digital transformation, recognizing early-adopter institutions, encouraging dialogue between education and training institutions and industry, and addressing cybersecurity in all education and training institutions. The Council recommends that member states take coherent and consistent approaches to digital education and skills, building on strategic priorities of the Commission’s Digital Education Action Plan 2021–2027 and conducting regular evaluations of the impact of digital education policies and practices. Member states are encouraged to promote equitable and impact-focused investment in digital education and training, including coordinating procurement processes, supporting responsible and sustainable provisioning of digital products and services, considering alternative approaches to investment, and promoting the use of open source, open content, or open data solutions.

Non-legislative Act: On the 23rd of November 2023, the Council published a Communication⁵⁴ on improving the provision of digital skills and competences in education and training (press release⁵³).

Problem: Digital skills and competences have become essential across nearly every aspect of society and the economy, underpinning social inclusion, well-being, active citizenship, employability, productivity, security, and growth. In today's interconnected world, all citizens require digital skills and competences to engage in everyday activities such as living, learning, working, exercising rights, staying informed, accessing online services, communicating, consuming, and creating and disseminating digital content. The ubiquity of digital technology in modern life has made these skills not just advantageous but necessary for participation in the digital age. This need is part of a broader European effort, including the 'European Year of Skills', to foster a culture of continuous learning and skill development.

Objective: The Recommendation comprehensively addresses the necessity, strategies, and actions related to the development and enhancement of digital skills and competences across the European Union. The ‘European Year of Skills’ aims to promote a mindset of reskilling and upskilling. It also highlights the first principle of the European Pillar of Social Rights, which advocates for quality and inclusive education and lifelong learning for skill acquisition. The document acknowledges the pivotal role of quality and inclusive education in advancing equality, with special attention to vulnerable and socio-economically disadvantaged groups, persons with disabilities, and people in rural and remote areas. It also identifies the need for action to achieve equal participation in the digital sector, especially for women and girls.

Subject Matter: The Recommendation sets targets for attainment levels in digital skills, acknowledging the current gap in achievement and the need for further support in skill development. It points out the disparity in basic digital skills among the population, the difficulty in filling ICT specialist vacancies, and the gender imbalance in ICT-related professions. Efforts are being made to develop basic and advanced digital skills, with initiatives like the Deep Tech Talent initiative and the Cybersecurity Skills Academy. The Council conclusions on digital education call for comprehensive digital education covering media literacy, critical thinking, and cyberbullying. I emphasizes the importance of digitally competent teachers in early childhood education and the need to safely navigate the digital environment. The Recommendation also calls for the expansion of cross-curricular approaches to digital skills education and the improvement of teacher training. Member states are encouraged to develop coherent strategies for digital education and skills, taking into account diverse groups and ensuring a comprehensive approach from early childhood to adult learning. Member states are also recommended to use national and Union funds to implement various aspects of digital skills development and encourage private investment in this area. The High Level Group on Education and Training is entrusted with providing guidance on strategic topics related to digital education and training.

Proposal: On the 19th of September 2022 the Commission published a Proposal⁵⁵ for a Regulation of the European Parliament and of the Council establishing a Single Market emergency instrument and repealing Council Regulation No (EC) 2679/98 (Press Release⁵⁶).

Problem: Recent crises have revealed some vulnerability of the Single Market and its supply chains in case of unforeseen disruptions and, at the same time, how much the European economy relies on a well-functioning Single Market. New emergency situations due to climate change and geopolitical instabilities are very like to arise in the future, therefore the functioning of the Single Market needs to be guaranteed in times of emergency. In future, unilateral measures by individual member states must be prevented, as these lead to a fragmentation of the internal market and crises are further exacerbated as a result.

Objective: The Proposal of a Single Market Emergency Instrument (SMEI) aims to provide a strong agile governance structure as well as a targeted toolbox to ensure the functioning of the Single Market in any type of future crisis.

Subject Matter: This Regulation looks to establish a framework of measures to anticipate, prepare for and respond to impacts of crises on the Single Market. Therefore, an advisory group composed of one representative from each member state shall be established to advise the Commission on the appropriate measures for anticipating, preventing or responding to the impact of a crisis on the Single Market. Additionally, the Proposal puts emphasis on obtaining, sharing and exchanging the relevant information. For this purpose, detailed administrative arrangements are to be put in effect to ensure timely cooperation and exchange of information between the Commission, relevant Union-level bodies and the member states. To ensure the smooth functioning of these arrangements, the Commission is empowered to conduct stress tests, simulations, and in- and after-action reviews with member states. Moreover, through the proposed Regulation the Commission may propose to the Council to activate a Single Market vigilance or emergency mode. Vigilance measures, on the one hand, mostly concern setting up and managing national strategic reserves. The Commission is therefore tasked to identify goods of strategic importance which may be necessary to build a reserve of, as well as to coordinate, support and communicate efforts of the respective member states in building up these national strategic reserves. Emergency measures, on the other hand, focus on ensuring free movement rights during a Single Market emergency and the transparency of actions that may compromise these rights. Furthermore, Single Market emergency measures contain the implementation of information requests to economic operators, targeted amendments to harmonised product legislation and the establishment of “priority related orders” which instruct relevant economic operators to prioritise orders for the production or supply of crisis-relevant goods. A coordinated distribution of strategic reserves between member states may also be recommended by the Commission. Lastly, the Proposal aims to regulate procurements of goods and services of strategic importance and crisis-relevant goods by the Commission on behalf of member states during vigilance and emergency modes. For this purpose, a negotiating mandate for the Commission to act as a central purchasing body for relevant goods and services shall be established, and member states shall coordinate efforts of procurement with the Commission.

Proposal: On the 29th of November 2023, the European Commission published a Proposal⁵⁹ for a Regulation on passenger rights in the context of multimodal journeys (press release²⁶).

Problem: Passengers have inadequate protection during multimodal journeys, where multiple modes of transport are combined. Currently, passengers who travel using only one mode of transport enjoy rights during travel disruptions, but these rights do not extend when they switch to another mode as part of their journey. This lack of a clear framework for determining obligations and liabilities of different travel service providers in multimodal journeys leaves passengers without adequate information or assistance, especially in case of disruptions when switching between modes. Furthermore, there is no uniformity in contract conditions and tariffs for multimodal journeys, potentially leading to discrimination based on nationality or the place of establishment of the carrier or intermediary.

Objective: The Proposal aims to establish a framework to ensure non-discrimination between passengers in terms of transport conditions and ticket provision, and to provide accurate, accessible information to passengers in a timely manner. It focuses on safeguarding passengers' rights during disruptions, particularly in the context of missed connections between different transport modes. Additionally, it seeks to provide specific assistance and non-discrimination for persons with disabilities and persons with reduced mobility (PRM), define and monitor service quality standards, handle complaints effectively, and establish general rules for enforcement. This initiative is designed to enhance the protection of passengers in multimodal journeys and address the challenges identified in the current regulatory framework.

Subject Matter: One of the primary focus areas is the establishment of a framework that encompasses non-discrimination in transport conditions and ticket provision. This framework will ensure that passengers are treated fairly, regardless of their nationality or the location of the carrier or intermediary. It will also enable passengers to access minimum and accurate travel information in a timely and accessible manner, significantly enhancing the travel experience and decision-making process. Another major aspect of the Proposal is to ensure passengers' rights during travel disruptions, particularly when there are missed connections between different transport modes. The Proposal suggests that passengers should be entitled to assistance such as reimbursement, re-routing, accommodation, meals, and refreshments during their journey, especially in the event of a travel disruption occurring while switching between transport modes. For persons with disabilities and persons with reduced mobility (PRM), the Proposal aims to provide specific assistance and ensure non-discrimination. This includes the establishment of Single Points of Contact at multimodal passenger hubs, which would facilitate the coordination of information and assistance for PRMs. The Proposal also seeks to define and monitor service quality standards across all modes of transport to ensure consistency and reliability in service provision. Furthermore, the Proposal outlines the process for handling complaints from passengers, ensuring that they have a clear and effective avenue to address their concerns. This will include the establishment of national enforcement bodies responsible for monitoring compliance with passenger rights and enforcing appropriate sanctions when necessary.

Legislative procedure completed: The Parliament adopted the text on 29 February 2024, and the Council followed suit on 18 March 2024. The final act was signed on 11 April 2024. The Proposal for a Regulation on data collection and sharing relating to short-term accommodation rental services and amending Regulation (EU) 2018/1724  was adopted (press release⁶⁰). The Regulation addresses issues of affordability and tourism distribution. It mandates harmonised registration for hosts, including a unique registration number, to streamline data requests and enhance transparency. Online platforms must verify host registrations and share rental data monthly with public authorities through single digital entry points, improving tourism statistics and consumer confidence. Amendments by the Parliament and Council include free registration, detailed data requirements, and interoperability of IT systems. The Regulation aims to balance local housing needs and tourism growth across member states.

Proposal: On the 7th of November 2022, the European Commission published a Proposal⁶¹ for a Regulation on data collection and sharing relating to short-term accommodation rental services and amending Regulation (EU) 2018/1724 (press release⁶²).

Problem: Given the growing importance of short-term accommodation rentals (SRTs), national, regional and local authorities have been increasingly regulating them themselves. The result is inefficient and divergent registration systems managed by authorities unable to efficiently obtain identification data for hosts and advertisers. There is also a lack of effective and enforceable legal frameworks, standards, and tools for data exchange between platforms and authorities, as well as a lack of a proper legal framework governing transparency and data sharing.

Objective: The proposal aims primarily to harmonise and improve the framework for generating and exchanging data on STRs across the Union and to increase transparency in the STR sector. Specific objectives include the harmonisation of organiser registration systems and the obligation for online platforms to allow organisers to display registration numbers and to exchange specific data on organisers' activities and their entries with public authorities. Specific tools and procedures are therefore needed to ensure that data exchange is secure, compliant with the General Data Protection Regulation and cost-effective for all parties involved.

Subject Matter: The provisions of this Regulation govern the collection of data by competent authorities and providers of online short-term rental platforms and the disclosure of data from online short-term rental platforms to competent authorities. It shall apply to providers of online short-term rental platforms offering services to hosts offering short-term accommodation rentals in the Union, irrespective of their place of establishment. Member states shall ensure that the registration procedures established in their territory function on the basis of the declarations made by hosts. The registration procedures shall allow for the automatic and immediate issuance of a registration number for a given accommodation unit once the host has submitted the relevant information. A unit shall not be subject to more than one registration procedure, whereas technical means will be in place to allow updating of information and documentation by the host. In addition, member states will establish technical means to check the validity of registration numbers and to allow a host to remove a unit from the register. Hosts will be required to indicate whether the accommodation unit offered is located in an area for which a registration procedure has been established or is valid and, if so, to provide the registration number.

Non-legislative Act: On the 18th of November 2022, the European Commission published a Communication⁶³ on a strengthened public sector interoperability policy Linking public services, supporting public policies and delivering public benefits Towards an ‘Interoperable Europe’ (press release⁶⁴).

Problem: The current policy framework for non-binding interoperability cooperation is not able to ensure access to real-time information across sectors and levels of government. Although a wide-ranging common EU interoperability acquis has been developed by digital government and data experts with cooperation practices, approaches, reusable solutions, open specifications and tools that support national reform efforts and established EU policies, recent assessments have revealed significant limitations to this fully voluntary cooperation approach. Data access and sharing aspects are often addressed too late in the policy-making process, as interoperability aspects are not integrated into public services. This leads to high implementation risks and costs, missed opportunities and, in the worst case, undermining large-scale digitisation-dependent policies. If the EU does not act to improve interoperability, it could miss the opportunity to significantly reduce administrative burdens. This would reduce the resilience of public administrations, limit their capacity to innovate and, in the worst case, render them unable to act in times of crisis.

Objective: Cooperation on interoperability in Europe needs to be strengthened. Therefore, this Communication primarily paves the way for the proposed legal act "Interoperable Europe Act", which aims to establish a stable organisational structure, generalise the use of the EIF and develop widely accepted and open specifications and reusable solutions. A so-called "interoperability through technology" approach will lead to better coordination of public sector experimentation and innovation, including cooperation with the private sector ("GovTech"). Establishing a structured, transparent and inclusive cooperation framework will help ensure the adaptive and innovative capacity that the public sector needs in a dynamic technical, societal and political framework. In this context, effective cooperation between policy makers and implementers at all levels of government and in all sectors is crucial. Strengthening EU interoperability governance, shared by member states and the EU, will enable a much needed improved policy and support framework for EU public sector reform objectives. Moreover, to guide investment and assess progress, the maturity of interoperability shall be measured. Finally, the introduction of a systemic approach to interoperability policy design is planned.

Subject Matter: The Commission has proposed the adoption of a renewed EIF based on a proposal from the future Interoperable Europe Board, which will focus on concrete implementation recommendations, including for EU data spaces. The development of sectoral interoperability specialisations aligned with the EIF, such as the EIF for Smart Cities and Communities (EIF4SCC), which is published together with this Communication, is supported by the Commission. The interoperability reporting and monitoring is to fully align with and, where necessary, be integrated into relevant EU policy monitoring activities. As set out in the Digital Strategy, digital aspects will be integrated into the different stages of policy definition, development, adoption, and implementation. It will also ensure that the EIF is applied in its operational and policy practice. The Commission will seek timely feedback from member states on the potential challenges in implementing policy proposals with significant digital and interoperability aspects. The co-legislators will be encouraged to support the principles for digitally oriented policy making. Finally, it is crucial that interoperability resources (tools, specifications, solutions) are shared and referenced in funding instruments, in particular for public sector transformation.

Legislative procedure completed: On the 14th of November 2023, a political agreement was reached between the European Parliament and the Council on the Interoperable Europe Act (press release⁶⁵). The regulation aims to strengthen cross-border interoperability and cooperation in the public sector across the EU. In addition, the exchange of information in the public sector across the EU is to be raised to a next level and the digital transformation of Europe’s public sector is to be accelerated. This should result in a reduction in administrative burdens, including legal, organisational, semantic and technical obstacles to administrative cooperation. The regulation is intended to ensure seamless access to cross-border public services for people in the EU, improving the quality of life of all those wishing to work, study or retire in another member state. To enter into force the legal text now needs to be approved and adopted.

Proposal: On the 18th of November 2022, the European Commission published a Proposal⁶⁶ for a Regulation, laying down measures for a high level of public sector interoperability across the Union (Interoperable Europe Act) (press release⁶⁴).

Problem: In recent years, more and more public sector services in the EU have been digitised. Yet, their level of interoperability remains insufficient, limiting the ability to communicate between public administrations. Technical means alone are not able to address this problem. Therefore, agreements and established processes between different organisations, agreed data descriptions, laws enabling this data exchange and structured long-term cooperation are needed. Furthermore, the experience with the COVID-19 pandemic has shown that interoperable solutions help Union citizens to exercise their right to free movement. Interoperability within the public sector also has important implications for the right to free movement of goods and services, as burdensome administrative procedures can be significant barriers, especially for small and medium-sized enterprises (SMEs). Lastly, the danger of interoperability can be crucial for the mitigation of the increasing cybersecurity risks faced by the Union and the member states.

Objective: The proposal aims primarily to ensure legal, organisational and semantic interoperability. Thus, the Commission underlines the need to ensure that the introduction of legal frameworks in which different organisations operate does not hinder the delivery of seamless public services between and within Member States. Coordination between different public bodies at all levels of government in the delivery of public services needs to become more effective. Specific objectives highlighted in the proposal include a coherent EU people-centred approach to interoperability from policy design to policy implementation and an interoperability governance structure to enable public administrations at all levels and sectors, as well as private actors, to work together. In addition, the joint creation of an ecosystem of interoperability solutions for the EU public sector is needed so that public administrations at all levels in the EU and other stakeholders can contribute to and reuse such solutions, innovate together and create public value.

Subject Matter: The addresseesof this Regulation shall be public sector bodies of the member states and Union institutions, bodies and agencies providing or managing network or information systems capable of delivering or managing public services by electronic means. The Commission will publish the Interoperable Europe solutions and the European Interoperability Framework on the Interoperable Europe Portal electronically in open, machine-readable, accessible, discoverable and reusable formats, together with their metadata where appropriate. The Interoperable Europe Board shall monitor the overall coherence of the interoperability solutions developed or recommended and propose measures to ensure their compatibility with other interoperability solutions sharing a common purpose, where appropriate, and support complementarity with or transition to new technologies. Furthermore, the Interoperability Board will develop a European Interoperability Framework (EIF) and propose its adoption to the Commission, which shall in turn publish the EIF in the Official Journal of the European Union. The EIF will contain a general framework and a set of recommendations on legal, organisational, semantic and technical interoperability addressed to all entities falling within the scope of this Regulation and interacting with each other through their network and information systems. In addition, the Commission will monitor progress in the development of interoperable trans-European digital public services, giving priority to the re-use of existing international, Union, and national monitoring data and automated data collection.

Proposal: On the 28th of September 2022, the European Commission published a Proposal⁶⁷ for a Directive on liability for defective products (press release⁶⁸).

Problem: The Product Liability Directive that was initially established in 1985 provides an EU-level system for compensating people who suffer physical injury or damage to property due to defective products. Given the green and digital transitions, however, there have been significant changes in the way products are produced, distributed and operated. The 2018 evaluation of the PLD highlighted the instrument’s shortcomings. There is a lack of legal clarity on how to apply the PLD’s decades-old definitions and concepts to products in the modern digital economy and circular economy. Additionally, the burden of proof on the defects of a product that caused the damage suffered, has been challenging for injured persons in complex cases. Lastly, current rules excessively limit the possibility of making compensation claims.

Objective: With the PLD revision, liability rules will reflect the nature and risks of products in the digital age and circular economy. There shall always be a business based in the EU that can be held liable for defective products bought directly from manufacturers outside the EU, in light of the increasing trend for consumers to purchase products directly from non-EU countries. The burden of proof in complex cases and restrictions on making claims are to be eased, ensuring a fair balance between the legitimate interests of manufacturers, injured persons and consumers in general. It is further crucial to better align the PLD with the new legislative framework created by Decision 768/2008/EC7 and with product safety rules, as well codifying PLD-related case law.

Subject Matter: The Directive established uniform rules on the liability of economic operators for damage suffered by natural persons caused by defective products. This Directive only applies products placed on the market or put into service after the entry into force of the document. It does not apply to damage arising from nuclear accidents in so far as liability for such damage is covered by international conventions ratified by member states. Member states will not be allowed to maintain or introduce, in their national law, provisions diverging from those laid down in this Directive, including more, or less, stringent provisions to achieve a different level of consumer protection, unless otherwise provided for in this Directive.

Proposal: On the 28th of September 2022, the European Commission published a Proposal⁶⁹ for a Directive on adapting non-contractual civil liability rules to artificial intelligence (AI Liability Directive) (press release)⁶⁸.

Problem: Liability has been identified as the most relevant external obstacle for companies that are planning to, but have not yet adopted AI. National liability rules are not suited to handling liability claims for damage caused by AI-enabled products and services. This is due to the “black box” characteristics of AI, making it difficult or prohibitively expensive for victims to identify the liable person and prove the requirements for a successful liability claim. As a consequence, victims incur very high up-front costs and face significantly longer legal proceedings, deterring claim compensation altogether. Additionally, businesses are confronted with the difficulty to predict how the existing liability rules will be applied. Given the lack of action on EU-level, member states will be compelled to adapt their national liability rules to the challenges of AI, which in turn will result in further fragmentation and increased costs for businesses active throughout the EU.

Objective: The following proposal aims to promote the rollout of trustworthy AI in order to harvest its full benefits for the internal market. Victims of damage caused by AI are to obtain equivalent protection to victims of damage caused by products in general. Thus, legal uncertainty of businesses developing or using AI regarding their possible exposure to liability will be reduced, while the emergence of fragmented AI-specific adaptations of national civil liability rules will be avoided.

Subject Matter: The directive introduces common rules on the disclosure of evidence on high-risk artificial intelligence (AI) systems to enable a claimant to substantiate a non-contractual fault-based civil law claim for damages. The burden of proof in the case of non-contractual fault-based civil law claims brought before national courts for damages caused by an AI system is also covered by the directive. As long as such rules are compatible with Union law, member states may adopt or maintain national rules that are more favourable for claimants to substantiate a non-contractual civil law claim for damages caused by an AI system.

Non-legislative Act: On the 9th of March 2021, the European Commission published a Communication⁷⁰ on 2030 Digital Compass: the European Way for the Digital Decade (press release⁷¹).

Problem: The COVID-19 pandemic has not only accelerated the pace of digitalisation in societies and economies, but further exposed the vulnerabilities of the digital space, its dependencies on non-European technologies, and the impact of disinformation on democratic societies.

Objective: In the Digital Compass 2030, the Commission formulates four concrete objectives to achieve its digitisation efforts: promoting a digitally skilled population with highly skilled digital professionals, advancing the digital education system and securing sustainable digital infrastructures, enforcing the digital transformation of businesses, and lastly digitalizing public services.

Subject Matter: All European households shall be equipped with a gigabit network and all populated areas shall equipped with 5G networks. The production of advanced and sustainable semiconductors in Europe is to be optimised in addition to the cross-Europe deployment of 10,000 carbon-neutral, high-security edge nodes to ensure low-latency (a few milliseconds) access to data services wherever businesses are located. By 2025, Europe should have a first computer with quantum acceleration, paving the way for Europe to be at the forefront of quantum capabilities by 2030. By 2030, 75 per cent of European companies are expected to use cloud computing services, Big Data, and artificial intelligence. In addition, more than 90 per-cent of European SMEs should have achieved at least a basic level of digital intensity Digitisation of public services. By 2030, EU citizens should be able to view an electronic version of their medical records. Online provision of key public services shall be available to European citizens and businesses by 2030. 80 per cent of EU citizens shall use a digital ID solution by 2030. To achieve the Digital Compass goals, the European Commission is pursuing the implementation of a governance structure with annual reporting and tracking. The Commission intends to propose the Digital Compass objectives in the form of a digital policy program to be adopted in an ordinary legislative procedure, focusing on implementation and ongoing commitment to the common digital objectives.

Legislative procedure completed: On the 27th of June 2024, the Data Act was adopted (press release⁷²). The Regulation introduces new guidelines for accessing and utilizing data produced within the EU across various sectors, aiming to ensure equitable distribution of data value, foster competition, promote innovation, and enhance data accessibility. Key provisions include facilitating data portability, enabling individuals and businesses to transfer data easily between services, empowering consumers and companies to have control over their data, clarifying the scope of the legislation to include data generated by connected devices, establishing measures to prevent contractual imbalances in data sharing contracts, safeguarding trade secrets and intellectual property rights, providing mechanisms for public sector access to private sector data in emergencies, facilitating customer switching between data-processing service providers, and aligning with existing legislation such as the data governance act and GDPR.

Proposal: On the 23rd of February 2022, the Commission proposed a Regulation⁷³ on harmonised rules on fair access to and use of data, also known as Data Act (press release⁷⁴).

Problem: The volume of data is constantly growing, from 33 zettabytes generated in 2018 to 175 zettabytes expected in 2025. It is an untapped potential but, 80 per cent of industrial data is never being used.

Objective: The aim of the Data Act is ensuring fairness in the allocation of value from data among actors in the data economy and to foster access to and use of data. Therefore, it addresses legal, economic and technical issues that lead to data being under-used in the past. The new rules shall make more data available for reuse and are expected to create 270 billion euros of additional GDP by 2028. The proposal’s specific objectives are (1) Facilitating access to and the use of data by consumers and businesses, while preserving incentives to invest in ways of generating value through data; (2) Providing for the use of data by public sector bodies and Union institutions, agencies or bodies of data held by enterprises in exceptional situations; (3) Facilitating switching between cloud and edge services; (4) Putting in place safeguards against unlawful data transfer without notification by cloud service providers; (5) Providing for the development of interoperability standards for data to be reused between sectors.

Subject matter: With the help of this Regulation (1) legal certainty shall increase in order to generate a more transparent and easier access to the data for consumer and businesses. Manufacturers and designers are to be transparent on what data will be accessible and how it can be accessed. Obligations to make data available shall be fair and non-discriminatory, and any compensation will have to be reasonable. Guarantees that contractual agreements on data access and use do not take advantage of imbalances in negotiating power between the contractual parties shall be ensured by an unfairness test, including a general provision defining unfairness of a data sharing-related contractual term complemented by a list of clauses. (2) In situations where public sector bodies have an exceptional need to use certain data (i.e. public emergencies), a framework shall make data available for public sectors bodies to use for free. To ensure that the right to request data is not abused, the requests for data would need to be proportionate, clearly indicate the purpose, and respect the interests of the enterprise making the data available. (3) Minimum regulatory requirements for providers of cloud, edge and other data processing services, shall enable customers to switch between services. Therefore, this proposal shall ensure a minimum level of functionality after switching to another provider. (4) In order to prevent unlawful data transfer, providers are to be obliged to take all reasonable technical, legal and organisational measures to prevent such access. (5) For an interoperability use of data, requirements shall promote a seamless multi-vendor cloud environment by allowing interoperability between operators of data spaces and data processing services.

Legislative procedure completed: On the 15th of December 2022, the Proposal for a Directive⁷⁶ on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union was adopted. It introduces a framework based on two core mechanisms: the Income Inclusion Rule (IIR) and the Undertaxed Payments Rule (UTPR), designed to apply a minimum effective tax rate of 15 per cent on the profits of these groups. Specifically, the IIR requires the parent entity of a group to pay a top-up tax if the effective tax rate of its constituent entities in any jurisdiction is below the specified minimum, while the UTPR acts as a secondary mechanism, allocating any residual top-up tax across the group's entities in jurisdictions where the IIR does not fully apply.

Proposal: On the 22nd of December 2021, the European Commission published a Proposal⁷⁷ on ensuring a global minimum level of taxation for multinational groups in the Union (press release⁷⁸).

Problem: Ineffective corporate taxation in an increasingly pressing issue in the era of economic digitalisation and globalisation, as tax policies become progressively more saturated with international legal material. This is the case, for example, where the seat of the company is not located in its primary site of business.

Objective: The base objective of this proposal is to determine a fair level of taxation based on profit produced in the Union. Furthermore, profits produced by multinational enterprises (MNEs) need to be taxed where their economic value is generated. In realising these goals, the directive works closely with the Communication “Business Taxation for the 21st Century” and the Global Anti-Base Erosion Model Rules (GloBE Model Rules).

Subject Matter: Two pillars build up the context of this proposal: (1) aims at a partial redistribution of tax towards market jurisdictions and (2) aims to create an operative level of minimum taxation for transnational enterprises. The Single Market presupposes that all member states must coherently implement strategies in relation to fair taxation, as inadequate cooperation will not yield effective results. When an MNE is considered low-taxed, as per stipulation of the GloBE rules, then the MNE in question is subject to a top-up tax. This top-up tax is enacted when the effective tax rate (ETR) of an MNE is under 15 per cent in a given jurisdiction. The directive is applicable to all bodies conducting business and residing in a member state, as well as children entities of the ultimate parent entity (UPE) company located within the borders of the EU. Procedures must be conducted at a group rather than individual level. Smaller MNE entities with an annual threshold of less than 750 million in joint revenue escape the initiative. Beyond its international applicability, the directive is to be applied to very large-scale national groups. Exemptions from this Directive also apply to large-scale domestic companies with an average revenue of less than 10 Million and an average qualifying income or losses of less than 1 million in a taxable domain. Additionally, the ETR should be calculated through a set of guidelines laid out in this proposal, that include the establishment of a tax base (qualifying income or loss) and a calculation of the taxes paid (covered taxes). As member states should benefit from the proposal at a national level, specifically regarding the collection of top-up tax, they are free to choose to apply a national system. In terms of increasing taxation transparency, more information will be exchanged between tax authorities in all participating jurisdictions. To note, for maximum efficiency, a global effort is necessary in implementing a tax reform.

Legislative procedure completed: On June 7th 2022, the European Parliament and the EU member states reached an agreement on the Directive⁷⁹ in relation to a common charging solution. The Directive, adopted in September 2021, is expected to enter into force in summer 2023.  (press release⁸⁰).
Following the agreement, all charging connectors will have to be harmonised by 2024, except for those of laptops (not until 2026), with the USB-C charging connector introduced as a single charging connector. Furthermore, in view of the rapid technological development, the Commission will, in addition to its initial proposal, evaluate the different contactless charging technologies available and invite the European standardisation organisations to translate the most appropriate solution into a harmonised standard, thus paving the way for harmonised wireless charging of terminals.

Proposal: On the 23rd of September 2021, the European Commission published a Proposal⁸¹ for a Directive to harmonize the laws of the member states relating to the making available on the market of radio equipment (press release⁸²).

Problem: Consumers often have the problem that they do not have a suitable charger to land their electronic device. As a result, consumers spend an average of 2.4 billion euros on separate chargers that are not supplied with electronic devices. Consequently, disposed and unused charging devices are estimated to generate up to 11,000 tons of e-waste per year.

Objective: With this proposal for a Directive, the Commission aims to ensure standardization of charging interfaces for wired rechargeable cell phones and similar categories of radio equipment for all relevant devices. This should lead to greater consumer convenience and at the same time ensure a reduction of e-waste. Therefore, the sale of chargers and electronic devices will be unbundled. Thus, consumers will not be forced to purchase a new charger when buying a new electronic device.

Subject Matter: To harmonize charging ports and fast charging technology, the USB Type-C port is to become the standard port for all smartphones, tablets, cameras, headphones, portable speakers and portable video consoles. As soon as these require a voltage of more than 5 volts, a current of more than 3 amps or a power of more than 15 watts, they must support the USB Power Delivery (USB PD) charging protocol, as it is then a fast charge function. Therefore, for better consumer convenience, information about the charging power characteristics as well as the power supply of the chargers should be provided. A transitional period of 24 months after entry into force should make it easier for companies to implement the revised requirements. To review the Directive, the Commission is to submit a report to the European Parliament and the Council by two years after the Directive becomes applicable and report on the progress every five years thereafter.

Legislative Procedure Completed: In April 2022, the European Parliament and the Council agreed to extend the roaming rules set out in the Proposal⁸³ for a Regulation on roaming on public mobile communications networks within the Union. These will allow EU consumers to continue making calls and transferring data across Union borders at the same cost as at home. In addition, new rules will ensure that users can call emergency services, text or use an app for free when abroad and enjoy the same mobile network quality and speed as at home. If there is an increase in marginal costs, operators must inform users. As of now, the framework is extended for another ten years (press release⁸⁴).

Proposal: On the 24th of February 2021, the European Commission published a Proposal⁸³ for a Regulation on roaming on public mobile communications networks within the Union (recast) (press release⁸⁵).

Problem: The Regulation (EU) No 531/2012, which has been amended several times, expires on 30 June 2022. This calls for a new Regulation that not only will replace its former, but additionally improve clarity and replace the multiple amending acts it contains. Although Regulation (EU) No 531/2012 lowered roaming prices for calls and SMS and set a boundary for roaming prices for data across the EU, price differences between calls made within one’s own member state and those made while roaming discourage the use of cross-border services and continue to impede the free movement of goods, services and capital in EU’s internal market.

Objective: The Proposal intents to extend the rules regulating the EU-wide roaming market beyond 2022, while amending the maximum wholesale charges, bringing in new measures to ensure a genuine ’roam-like-at-home’ (RLAH) experience while roaming and repealing other redundant measures. Specific objectives introduced are increased transparency at retail level regarding (a) quality of service, (b) communications on value-added and (c) access to emergency. The service quality shall resemble the RLAH experience, thus ensuring that the roaming services are provided under the same conditions as if they were consumed domestically. A centralised EU database for value-added-service numbering ranges shall improve the level of transparency at wholesale level. Lastly, the access to emergency services to customers while roaming shall be free-of-charge.

Subject Matter: Given that the previous Regulation (EU) No 531/2012 expires on 30 June 2022, the new Regulation will enter into force on 1 July 2022. As a binding document, it will apply automatically and uniformly to all EU member states as soon as it enters into force, without needing to be transposed into national law. The centralised database shall, as a transparency tool, enable NRAs and operators to have direct access to information on which numbering ranges can generate higher costs (termination rates) in all member states. In cooperation with the Body of European Regulators for Electronic Communications (BEREC) and national regulatory authorities (NRAs), the Commission will monitor and report on the functioning of the roaming market and the implementation of the measures included in the Roaming Regulation. BEREC has been entrusted to perform the data collection and reporting activities and will also establish and maintain an EU-wide database for value added services numbering ranges by 31 December 2023.

Legislative procedure completed: On the 8th of November 2023, a political agreement was reached between the European Parliament and the Council on the Regulation introducing European Digital Identity Wallets (press release⁸⁶). All EU citizens will be offered the possibility to have an EU Digital Identity Wallet to access public and private online services. The wallet will not only securely store the digital identity of users, but will also allow them to open a bank account, make payments and hold digital documents. It is intended to offer a user-friendly and practical alternative to the online identification guaranteed by EU law. At the same time, the security and protection of personal data is to be fully guaranteed throughout Europe. To enter into force the agreement now needs to be formally adopted by the Council and the Parliament.

Proposal: On the 3rd of June 2021, the European Commission published a Proposal⁸⁷ for a Regulation amending Regulation (EU) No 910/2014 as regards establishing a framework for a European Digital Identity (press release⁸⁸).

Problem: In the course of an evaluation, it was revealed the current eIDAS does not address new market demands, mostly due to its inherent limitations to the public sector, the limited possibilities and the complexity for online private providers to connect to the system, its insufficient availability of notified eID solutions in all member states and its lack of flexibility to support a variety of use cases. Additionally, privacy and date protection concerns were raised.

Objective: The Regulation shall enable EU citizens to use personal identification data to identify themselves in online and offline services across Europe. In addition, it will give EU citizens the possibility to store credentials linked to their identity, make them available to trusted parties on request as well as to sign them by using a qualified electronic signature. This would apply to documents such as university transcripts, birth certificates, or medical records. The European digital identity wallet is not a mandatory application for EU citizens; it is simply intended to facilitate identification in other EU countries and to guarantee access to a wide range of public and private services.

Subject Matter: In order to establish a pan-European infrastructure, member states must provide and accept the proof of identity from each other and establish validation mechanisms based on common technical standards. Further requirements include that users ought to have full control over their wallet. The issuer is not allowed to collect information about the use of the wallet, nor is he/she allowed to combine personal identification data and other personal data stored in the wallet – something which could allow abusers to draw conclusions on the user’s behaviour. Within six months after the entry into force of the Regulation, the Commission is required to present technical and operational specifications for the establishment of the wallet. After 12 months, all member states will be able to issue wallets. After 24 months, the Commission is obliged to conduct an implementation review and present it to the Council and European Parliament in the form of an evaluation report. The total funding required to implement the proposal over the period 2022-2027 is up to 30,825 million euro, including 8,825 million euro in administrative costs and up to 22 million euro in operational expenditure covered by the Digital Europe program.

Legislative procedure completed: On the 13th of December 2023, the Directive on improving working conditions in platform work was adopted (press release⁸⁹). With specific indicators to determin whether a platform qualifies as an employer, digital labourers can now benefit from employment status should it correspond to their actual work arrangements. With the Directive there is now legal certainty for platforms and people working through them. Platform workers will enjoy the labour and social rights associated with their ‘worker' status, such as a minimum wage (where applicable), collective bargaining, working time and health protections, paid leave, unemployment and sickness benefits, and more. The Directive also requires human oversight of the automated systems to ensure their compliance with working conditions. In addition, digital labour platforms will not be able to collect personal data while people working through platforms are not logged into their platforms.

Proposal: On the 9th of December 2021, the Commission proposed a Directive⁹⁰ on improving the working conditions in platform work. (press release⁹¹)

Problem: The digital transition, accelerated by the COVID-19 pandemic, has increased the importance of digital labour platforms. This means, even though digital labour platforms open up many opportunities, it also introduces a new form of work organization which challenge existing rights and obligations related to labour law. According to one estimate, up to five and a half million people working through digital labour platforms could be at risk of employment status misclassification. Those people are most likely to experience poor working conditions and inadequate access to social protection. Moreover, digital labour platforms use algorithmic management systems. It creates efficiencies in the matching of supply and demand but has also a significant impact on working conditions in platform work. It is so far unregulated phenomenon in the platform economy that poses challenges to both workers and the self-employed working through digital labour platforms.

Objective: With the help of this Directive, the Commission aims to improve the working conditions and social rights of people working through platforms. This means (1) to ensure that people working through platforms have the correct employment status and gain social protection rights. Moreover, (2) ensuring fairness, transparency, and accountability in algorithmic management and (3) to enhance transparency, traceability, and awareness of developments in work as well as improving enforcement of the applicable rules for all people working through platforms.

Subject matter: In order to tackle the misclassification of employment status, the Commission aims to establish a framework including an appropriate procedure to ensure correct determination. This legal presumption shall apply in all legal and administrative proceedings. To ensure transparency and fairness in algorithmic management, the Commission introduces new material rights for people performing platform work. Moreover, establishing appropriate channels for discussing and requesting review of decisions made by an algorithmic management system shall ensure fairness, accountability, and safeguarding basic workers’ rights and health and safety at work of significant decisions taken or supported by automated systems. Furthermore, clarified obligations for digital labour platforms shall be implemented to enhance transparency and traceability of platform work. The Directive shall also improve labour and social protection authorities’ knowledge of which digital labour platforms are active in their member state.
Member states shall be obligated to transpose this Directive two years after it enters into force.

Legislative procedure completed: On June 30, 2022, the European Parliament and the EU Member States reached an agreement on the Regulation⁹² on third-country subsidies that distort competition (press release⁹³). The aim of the regulation is to ensure fair conditions for all companies operating in the EU internal market. Furthermore, distortions due to third-country subsidies are to be prevented. From now on, the EU may examine financial contributions that companies operating in the EU receive from public institutions of a non-EU state in order to prevent the distorting effects of such subsidies on competition.

Proposal: On the 5th of May 2021, the European Commission published a Proposal⁹⁴ for a Regulation on foreign subsidies distorting the internal market (press release⁹⁵).

Problem: EU’s internal market has been increasingly distorted by foreign subsidies, creating an uneven playing field for competition. Facilitating the acquisition of EU undertakings, foreign subsidies have influenced investment decisions, distorted trade in services or otherwise influenced the behaviour of their beneficiaries in the EU market, to the detriment of fair competition.

Objective: The European Commission aims to eliminate distortions in the single market caused by subsidies from third countries. Therefore, it introduces several counter measures and new rules concerning companies that carry out an economic activity in the internal market. Thus, the general objective is to restore the level playing field on the internal market. Specific aims on the other hand include identifying the most distortive subsidies and remedying the distortions caused by foreign subsidies.

Subject Matter: The Commission will request necessary information on its own initiative (ex ante approach) and conduct a preliminary examination. If there is sufficient evidence of distortion of the internal market within 90 days, the Commission shall adopt a decision to open an in-depth investigation. As part of the investigation, it shall determine what measures must be implemented to address the distortion. The company concerned can avert these by making a commitment to eliminating the distortion. The Commission will have the right to impose remedies, having the power to impose interim measures if there is a serious risk of a significant and irreparable damage to competition in the internal market. If the Commission finds companies intentionally or negligently withholding or falsifying information, the Commission can impose fines and periodic penalty payments by decision. Furthermore, the draft Regulation pays particular attention to controlling the risk of distorting the market created by subsidies for mergers and public procurement procedures. The total administrative expenditure for the implementation of the proposal over the period 2021-2027 is 90,340 million euro, part of which will be funded by the Single Market Program.

Non-legislative Act: On the 5th of May 2021, the European Commission published a Communication⁹⁶ updating the 2020 New Industrial Strategy: Building a stronger Single Market for Europe’s recovery (press release⁹⁷).

Problem: The COVID-19 pandemic that led to several lockdowns and economic slowdowns took a toll on the EU communities and economies, as well as its industries and companies. Further, new vulnerabilities and old dependencies in addition to socio-economic and territorial inequalities were revealed. Due to an increased interdependence of global value chains and the value of a globally integrated Single Market, there is a need for a quicker transition towards a cleaner, more digital, and more resilient economic and industrial model. Thus, given the changed economic and social situation, the strategy has now been revised and adapted to the current situation.

Objective: EU’s industrial strategy will foster Europe’s drive towards sustainable competitiveness by strengthening the resilience of the common internal market, dealing with EU’s strategic dependencies and accelerating the twin transitions. An internal market emergency instrument shall allow a better and faster response in times of crisis. The Commission aims to strengthen internal market governance instruments and procedures, as well as enable more transparency and coordination in EU internal export and service restrictions. Despite any circumstances, it is necessary to uphold the free movement of persons, goods, services, and capital in the Single Market and the need to work together to strengthen its resistance to disruptions. Additionally, investment in deepening integration in the fields which offer the greatest opportunities within the Single Market and new strategies to accompany the twin transitions are proposed. For the businesses, the enforcement of competition rules, in particular State aid rules, will ensure that public funds for the recovery do not replace but trigger additional private investments. Lastly, investing in skills, meaning upskilling and reskilling Europe’s workforce, shall contribute to a fair recovery.

Subject Matter: Structures will be implemented to facilitate the movement of goods and services in the context of border restrictions, as well as faster product availability in times of crisis. It is necessary to identify strategic dependencies and capacities and to implement measures that reduce and prevent strategic dependencies. This includes diversifying trade chains, strengthening alternative supply chains with the closest allies, launching two industrial alliances (2nd Q 2021), the Processors and Semiconductor Technologies Alliance and the Industrial Data, Edge and Cloud Alliance and supporting the development of an Alliance on Space Launchers and a Zero Emissions Aviation Alliance. Moreover, strengthening measures against disruptions and vulnerabilities in small to medium enterprises (SMEs) supply chains (4th Q 2021), adopting a standardization strategy (3rd Q 2021) and developing guidance on identifying and addressing strategic dependencies through public procurement (1st Q 2022) is encouraged. Transformation pathways need to be created in partnership with industry, public authorities, social partners and other stakeholders starting in the areas of mobility and tourism (2Q 2021). In addition, the Commission is pursuing measures to promote renewable power purchase agreements in a proposal for a revised Renewable Energy Directive (2.Q 2021). Furthermore, it considers a European approach to carbon offset contracts in a proposal for a revised ETS Directive (2.Q 2021) and to establish an energy and industrial geography laboratory to develop information on energy infrastructures (to be released in the 4th Q 2021).

Non-legislative Act: On the 22nd of February 2021, the European Commission published a Communication⁹⁸ in which it presented an action plan for synergies between the civil, defense and space industries (press release⁹⁹).

Problem: The space, defense and security sectors have not yet extensively exploited potential synergies. This is a result of regulatory obstacles, lack of a level playing field in international markets, lack of access to costly research infrastructure, and need for skilled labor.

Objective: With the help of the Action Plan ("Three-Point Belt Plan"), the goal is to (1) create synergies between EU programs and instruments to increase the efficiency of investments and the effectiveness of results. In addition, (2) support measures (spin-offs) of research and development to achieve economic and technological progress in the areas of defense and space. In this context, (3) the use of research results from civil industry in the defense sector is to be facilitated (spin-ins).

Subject matter: To strengthen synergies between the space, defense and security sectors, the Action Plan presents eleven concrete actions. These include early identification of needs, improving access to funding, support for start-ups, SMEs and RTOs, and technology roadmaps.

Legislative procedure completed: On the 23rd of November 2022, Directive¹⁰⁰ (EU) 2022/2380 amending Directive 2014/53/EU on the harmonisation of the laws of the Member States relating to the making available on the market of radio equipment was adopted. The amended directive will require electronic devices to be equipped with a USB Type C receptacle and to incorporate the USB Power Delivery communication protocol. Consumers will have the option to buy devices with or without a charger (unbundling) and will be informed by a pictogram whether a charger is included with a device. Information on the charging capabilities and compatible charging devices will be provided on a label.

Proposal: On the 23rd of September 2021, the European Commission⁸¹ published a Proposal for a Directive to harmonize the laws of the member states relating to the making available on the market of radio equipment (press release⁸²).

Problem: Consumers often have the problem that they do not have a suitable charger to land their electronic device. As a result, consumers spend an average of 2.4 billion euros on separate chargers that are not supplied with electronic devices. Consequently, disposed and unused charging devices are estimated to generate up to 11,000 tons of e-waste per year.

Objective: With this proposal for a Directive, the Commission aims to ensure standardization of charging interfaces for wired rechargeable cell phones and similar categories of radio equipment for all relevant devices. This should lead to greater consumer convenience and at the same time ensure a reduction of e-waste. Therefore, the sale of chargers and electronic devices will be unbundled. Thus, consumers will not be forced to purchase a new charger when buying a new electronic device.

Subject Matter: To harmonize charging ports and fast charging technology, the USB Type-C port is to become the standard port for all smartphones, tablets, cameras, headphones, portable speakers and portable video consoles. As soon as these require a voltage of more than 5 volts, a current of more than 3 amps or a power of more than 15 watts, they must support the USB Power Delivery (USB PD) charging protocol, as it is then a fast charge function. Therefore, for better consumer convenience, information about the charging power characteristics as well as the power supply of the chargers should be provided. A transitional period of 24 months after entry into force should make it easier for companies to implement the revised requirements. To review the Directive, the Commission is to submit a report to the European Parliament and the Council by two years after the Directive becomes applicable and report on the progress every five years thereafter.

Legislative procedure completed: On the 18th of March 2024, the EU Parliament passed the world's first AI law. On the 9th of December 2023, Proposal for a Regulation laying down harmonized rules on Artificial Intelligence (Artificial Intelligence Act) and amending certain union legislative acts was adopted (press release¹⁰¹). The provisional agreement introduces several key elements compared to the initial Commission Proposal, including regulations on high-impact general-purpose AI models and high-risk AI systems, an updated governance structure with enforcement powers at the EU level, an expanded list of prohibitions with allowances for remote biometric identification by law enforcement, and enhanced rights protection through mandatory fundamental rights impact assessments for high-risk AI system deployers. These elements address definitions and scope, classification of AI systems, exceptions for law enforcement, regulations on general-purpose AI systems and foundation models, establishment of a new governance architecture, penalties for violations, transparency measures, and support for innovation, aiming to create a balanced framework that fosters innovation while safeguarding fundamental rights and ensuring accountability. The law must be implemented nationally within two years.

Proposal: On the 21 April 2021 , the European Commission published a Proposal¹⁰² for a Regulation laying down harmonized rules on Artificial Intelligence (Artificial Intelligence Act) and amending certain union legislative acts (press release¹⁰³).

Problem: The rapid evolution and widespread application of Artificial Intelligence (AI) technologies present both significant opportunities and risks across various sectors. While AI can enhance prediction, optimise operations, and personalise service delivery, contributing to economic and societal benefits, it also harbours potential risks and negative consequences for individuals and society. These include challenges to fundamental rights, safety, and ethical considerations. The necessity for a balanced approach is underscored by the speed of technological advancements and the emergence of new risks, prompting a need for regulatory intervention to safeguard EU values and fundamental rights.

Objective: In response to the challenges posed by AI, the proposal aims to establish a comprehensive and balanced regulatory framework that promotes the uptake of AI while addressing associated risks. The objective is to ensure that AI systems deployed in the EU market are safe and aligned with EU values, fundamental rights, and principles. Furthermore, the proposal seeks to foster legal certainty, facilitating investment and innovation in AI technologies. By establishing a risk-based regulatory approach, it aims to prevent market fragmentation, ensuring a single market for lawful, safe, and trustworthy AI applications. The regulation is designed to be both robust and adaptable, ensuring it remains relevant in the face of technological evolution and emerging risks.

Subject Matter: The Regulation adopts a risk-based approach to AI governance, differentiating between AI systems based on the level of risk they pose to society and individuals. This categorisation is pivotal in tailoring regulatory measures to the intensity and scope of potential risks, ensuring that interventions are both proportionate and effective. At the heart of this approach is the prohibition of certain AI practices deemed unacceptable due to their potential to violate fundamental rights, including manipulative practices that exploit vulnerabilities and social scoring systems implemented by public authorities. Moreover, the Regulation strictly restricts 'real-time' remote biometric identification in publicly accessible spaces for law enforcement purposes, except under specific, narrowly defined conditions, thereby safeguarding personal privacy and freedom. For AI systems identified as high-risk, the Regulation mandates compliance with a set of stringent requirements before these systems can be introduced into the market. These requirements encompass aspects such as data governance, transparency, human oversight, and robustness, designed to ensure that high-risk AI systems are developed and used in a manner that respects EU values and fundamental rights. Notably, the Regulation establishes a clear framework for the conformity assessment of high-risk AI systems, including both ex-ante and ex-post evaluations, to verify compliance with the set requirements. This is complemented by the creation of an EU-wide database for stand-alone high-risk AI systems, enhancing transparency and facilitating oversight. In addition to these regulatory measures, the Regulation introduces provisions to support innovation and the uptake of AI technologies. It encourages the establishment of regulatory sandboxes, offering a controlled environment for testing innovative AI applications under the supervision of competent authorities. This is particularly significant for small and medium-sized enterprises (SMEs) and start-ups, for whom the Regulation seeks to reduce regulatory burdens and support compliance. The governance structure envisaged by the Regulation involves both national and EU-level oversight mechanisms. At the national level, member states are required to designate competent authorities to supervise the implementation of the Regulation. At the EU level, the establishment of a European Artificial Intelligence Board is proposed, tasked with facilitating cooperation among national authorities and providing advice and expertise to the Commission on AI governance. The Regulation's approach to AI governance is characterised by its adaptability and future-proof design. By empowering the Commission to amend and update annexes and provisions in response to technological advancements, the Regulation ensures its relevance and efficacy in the face of rapid technological change. Furthermore, by setting out a framework for the development of codes of conduct for non-high-risk AI systems, the Regulation encourages voluntary compliance with best practices, extending its influence beyond the realm of high-risk applications.

Non-legislative Act: On the 19th of February 2020 the European Commission published a Communication¹⁰⁴ on Shaping Europe's digital future (press release¹⁰⁵).

Problem: The twin challenge of a green and digital transformation requires an immediate change of direction towards more sustainable solutions which are resource-efficient, circular and climate-neutral, so that every citizen, every employee, every business person has a fair chance, wherever they live, to reap the benefits of the increasingly digitised society. Furthermore, the arising of digital technologies leads to an increased uncertainty surrounding data protection as well as cybersecurity of critical infrastructure. Therefore, the Commission aspires to reflect on all levels of society as to how Europe can best meet, and continue to meet, these risks and challenges.

Objective: A European society is to be established, one that is powered by digital solutions and that enriches the lives of all by providing people the opportunity to develop personally, to choose freely and safely, to engage in society, regardless of their age, gender or professional background. Businesses shall acquire a framework that allows them to start up, scale up, pool and use data, to innovate and compete or cooperate on fair terms. Europe on the other hand needs to have a choice and pursue the digital transformation in its own way. Key objectives of the Communication include the development, deployment and uptake of technology that makes a real difference to people’s daily lives as well as of a strong and competitive economy that masters and shapes technology in a way that respects European values. A fair and competitive economy shall allow companies of all sizes and in any sector to compete on equal terms, and develop, market and use digital technologies, products and services at a scale that boosts their productivity and global competitiveness. Lastly, allowing an open, democratic and sustainable society is to create a trustworthy environment in which citizens are empowered in how they act and interact, and of the data they provide both online and offline.

Subject Matter: Initiating a White Paper on Artificial Intelligence shall help set out options for a legislative framework for trustworthy AI (adopted together with this Communication), with a follow-up on safety, liability, fundamental rights and data. A Digital Education Action Plan is to boost digital literacy and competences at all levels of education, while a reinforced Skills Agenda and a reinforced Youth Guarantee are to strengthen digital skills throughout society and put a strong focus on digital skills in early career transitions. Proposing an Industrial Strategy Package shall put forward a range of actions to facilitate the transformation towards clean, circular, digital and globally competitive EU industries, including SMEs and the reinforcement of single market rules. A European Data Strategy shall make Europe a global leader in the data-agile economy. In order to support digital transformation and competitiveness of the audiovisual and media sector as well as stimulate access to quality content and media pluralism, a media and audiovisual Action Plan is required. New and revised rules are to deepen the Internal Market for Digital Services, by increasing and harmonising the responsibilities of online platforms and information service providers and reinforce the oversight over platforms’ content policies in the EU. Finally, a Digital for Development Hub shall consolidate a whole-of-EU approach promoting EU values and mobilising EU member states and EU industry, Civil Society Organisations (CSOs), financial institutions, expertise and technologies in digitisation.

Non-legislative Act: On the 19th of February 2020 the European Commission published a White Paper¹⁰⁸ on Artificial Intelligence - A European approach to excellence and trust (press release¹⁰⁹).

Problem: While the rapid development of Artificial Intelligence (AI) will improve healthcare, increase the efficiency of farming, contribute to climate change mitigation and adaptation, promote the efficiency of production systems through predictive maintenance as well as strengthen the security of Europeans, there are a number of emerging potential risks. These include opaque decision-making, gender-based or other kinds of discrimination, intrusion in private lives or its usage for criminal purpose. In order to enable scientific breakthrough, preserve the EU’s technological leadership and ensure that new technologies are at the service of all Europeans, the Commission analyses the opportunities and challenges of AI in addition to encouraging a Union-wide approach that allows all member states to profit from the development and deployment of AI.

Objective: The White Paper primarily aims to provide a thorough evaluation of policy options on how to achieve a regulatory and investment oriented approach, with the twin objective of promoting the uptake of AI and of addressing the risks associated with certain uses of this new technology. In order to build safe, reliable and sophisticated products and services from aeronautics to energy, automotive and medical equipment in addition to becoming a global leader in innovation in the data economy and its applications, the EU needs to combine its technological and industrial strengths with a high-quality digital infrastructure and a regulatory framework based on its fundamental values. An AI ecosystem is to benefit European citizens, private businesses as well as the public interest. Improving health care, decreasing the number of breakdowns of household machinery, enabling safer and cleaner transport systems, and better public services shall benefit the citizens, while the development of a new generation of products and services in areas where Europe is particularly strong can promote business development. Lastly, services of public interest will profit from reduced costs of providing services, improved sustainability of products and equipped law enforcement authorities with appropriate tools to ensure the security of citizens.

Subject Matter: Investment in next generation technologies and infrastructures, as well as in digital competences like data literacy, shall increase Europe’s technological sovereignty in key enabling technologies and infrastructures for the data economy. Additionally, initiatives such as the European Processor Initiative, which focuses on developing low-power computing systems for both edge and next generation high-performance computing, and the work of the Key Digital Technology Joint Undertaking shall enhance the EU’s position in low-power electronics. Specific actions proposed by the Commission include the revision of the Coordinated Plan based on the analysis of the White Paper, the creation of excellence and testing centres that can combine European, national and private investments, possibly including a new legal instrument as well as the establishment and support through the advanced skills pillar of the Digital Europe Programme networks of leading universities and higher education institutes to attract the best professors and scientists and offer world-leading masters programmes in AI. The Commission will work with member states to ensure that at least one digital innovation hub per member state has a high degree of specialisation on AI. Lastly, it will, with the help of the European Investment Fund, launch a pilot scheme of €100 million in Q1 2020 to provide equity financing for innovative developments in AI.

Non-legislative Act: On the 19th of February 2020 the European Commission published a Communication¹¹⁰ on a European strategy for data (press release¹⁰⁵).

Problem: New digital technologies have transformed the economy and society, affecting all sectors of activity and the daily lives of all Europeans, putting data and data protection in the spotlight of this transformation. While data-driven innovation has the potential to bring enormous benefits for citizens, citizens will embrace data-driven innovations only if they are confident that any personal data sharing in the EU will be subject to full compliance with the EU’s strict data protection rule. Therefore, a common European date space as well as the further development of a genuine single market for data require common action between member states.

Objective: Wanting to become a leading role model for a society empowered by data, the EU needs to strengthen its legal framework in terms of data protection, fundamental rights, safety and cyber-security. Improvement in the governance structures for handling data and the increase in pools of quality data available for use and re-use are vital. Europe aims to capture the benefits of better use of data, including greater productivity and competitive markets, but also improvements in health and well-being, environment, transparent governance and convenient public services. A comprehensive approach to the data economy shall increase the use of, and demand for, data and data-enabled products and services throughout the Single Market. Common European rules and efficient enforcement mechanisms shall ensure that data flows within the EU and across sectors. European rules and values, in particular personal data protection, consumer protection legislation and competition law, are to be fully respected. Lastly, the rules for access to and use of data shall be fair, practical, and clear, as well as promote trustworthy data governance mechanisms.

Subject Matter: A legislative framework for the governance of common European data spaces as well as an implementing act on high-value data-sets shall be proposed in 2020 and adopted in 2021 respectively. The analysis of the importance of data in the digital economy and the review of the existing policy framework in the context of the Digital Services Act package has also been planned. The EU shall invest in a High-Impact project on European data spaces, encompassing data sharing architectures and governance mechanisms. In addition to an EU (self-)regulatory cloud rulebook, a European cloud services marketplace will be launched in 2022. Lastly, a framework that can measure data flows and estimate their economic value within Europe, as well as between Europe and the rest of the world, is to be established.

Legislative procedure completed: The European Parliament and EU member states agreed on the Digital Services Act on 23rd of April 2022 (press release¹¹¹).
Fifteen months or from 1 January 2024, whichever later, after entry into force, the DSA will be directly applicable across the EU. Very large online platforms and very large online search engines will be subject to the DSA four months after their designation. Providing better protection to EU’s citizens, the DSA sets out an unprecedented new standard for the accountability of online platforms regarding illegal and harmful content. It contains EU-wide due diligence obligations that will apply to all digital services that connect consumers to goods, services, or content, including new procedures for faster removal of illegal content as well as comprehensive protection for users' fundamental rights online.

Proposal: On the 15th of December 2020 the European Commission published a Proposal¹¹⁴ for a Regulation on a Single Market for Digital Services (Digital Services Act) and amending Directive 2000/31/EC (press release¹¹³).

Problem: Ever since the e-Commerce Directive was adopted, new and innovative information society (digital) services have emerged, changing the daily lives of Union citizens and shaping and transforming how they communicate, connect, consume and do business. While a number of positive developments such as societal and economic transformations in the Union and across the world have been encouraged, new risks and challenges, both for society as a whole and individuals using such services, have become more apparent. Furthermore, with the emergence of the COVID-19 pandemic has highlighted the dependency of the economy and society on digital services as well as the risks stemming from the current framework for the functioning of digital services. Therefore, the Commission committed to update the horizontal rules that define the responsibilities and obligations of providers of digital services, and online platforms in particular, by reforming the existing EU e-commerce legal framework.

Objective: Appropriate supervision of digital services and cooperation between authorities at EU level is needed in order to ensure the proper functioning of the single market as well as establish trust, innovation and growth within. Thus, ensuring the best conditions for innovative cross-border digital services to develop in the EU across national territories and at the same time maintain a safe online environment for all EU citizens, goals which can only be served at European level. A strengthened European layer of supervision shall coordinate and complement national regulators. Additionally, to ensure the proper function of the internal market for intermediation services, innovation and competitiveness within the single market is to be fostered. Establishing an accountability framework for online platforms and setting out uniform rules for a safe online environment, where fundamental rights enshrined in the Charter are effectively protected, is further highlighted.

Subject Matter: This proposed Regulation contains clear rules on the provision of intermediary services, by establishing a framework for their responsibilities. This includes to address the risks faced by their users and to protect their rights, as well as rules on specific due diligence obligations. Another focus is on the enforcement of the regulation, including the cooperation between the competent authorities. For the cross-border application of the obligations under this Regulation, a consistency mechanism, a new advisory group coordinating the activities of national authorities and of the Commission as well as direct enforcement powers for the Commission and the set-up of an information system facilitating information flows between Digital Services Coordinators is needed. Furthermore, the proposed regulation comprehends additional obligations for very large online platforms to manage systemic risks. Within five years from the entry into force of the regulation, and then every five years thereafter, the Regulation will be reviewed periodically, including by the Commission, in order to evaluate the effectiveness and efficiency of the measures, in the context of the application of the measures.

Legislative procedure completed: On May 13th 2022, the European Parliament and EU’s member states agreed on the Directive¹¹⁵ on measures for a high common level of cybersecurity across the Union (NIS 2 Directive). Once published in the Official Journal, the Directive will enter into force 20 days after publication and member states will then need to transpose the new elements of the Directive into national law (press release¹¹⁶).

Proposal: On the 16th of December 2020 the European Commission published a Proposal¹¹⁵ for a Directive on measures for a high common level of cybersecurity across the Union, repealing Directive (EU) 2016/1148 (press release¹¹⁷).

Problem: The evaluation of the NIS Directive identified specific weaknesses including the low level of cyber resilience of businesses operating in the EU, the inconsistent resilience across member states and sectors as well as the low level of joint situational awareness and lack of joint crisis response. Thus, particularly with regard to the COVID-19 pandemic that further amplified these issues, the modernization of the existing legal framework that takes account of the increased digitization of the internal market in recent years and the evolving cybersecurity threat landscape, is needed.

Objective: The goal of the Cyber Security Strategy is to create a secure defence capability against cyber threats through enhanced digital services and tools. Improving the resilience and capacity to respond to security incidents of public and private entities, competent authorities and the Union as a whole in the field of cyber security and protection of critical infrastructure is also suggested. Thus, the revision aims to increase the cyber resilience of a range of businesses operating in the European Union across all relevant sectors, to promote equally strong resilience among sectors already covered by the Directive in the internal market, and to enhance common situational awareness and collective preparedness and response capabilities. Further, it aims to increase the trust of citizens and businesses in services and ensure a global and open internet. The planned safeguards are therefore also intended to protect European values, and in particular fundamental rights.

Subject Matter: The EU is to act in three areas: Resilience, technological sovereignty and leadership; operational capabilities for prevention, deterrence, and response; and cooperation to promote a global and open cyberspace. This proposal aims to ensure that the delivery of services in the internal market can be guaranteed by strengthening the resilience of critical infrastructure operators in the Member States. This will be achieved in particular through a better understanding of the risks and means to address them.
The Commission will regularly review the functioning of the Directive and report to the European Parliament and the Council, the first time three years after the entry into force of the Directive. It will also assess the correct implementation of the Directive by Member States. The monitoring and reporting of the proposal will follow the principles set out in ENISA's standing mandate under REGULATION (EU) 2019/881 (Cybersecurity Act). The data sources used for the planned monitoring will mainly come from ENISA, the Cooperation Group, the CSIRT network and Member State authorities. In addition to the data obtained from the reports (including the annual activity reports) of ENISA, the Cooperation Group and the CSIRTs network, specific data collection tools could also be used if needed (e.g. surveys of national authorities, Eurobarometer, and reports on the Cybersecurity Month campaign and the Europe-wide exercises).

Legislative, including impact assessment, Article 114 TFEU, 3rd quarter 2020.

See 2021.

Non-legislative Act: On the 10th of March 2020 the European Commission published a Communication¹¹⁸ on a new Industrial Strategy for Europe (press release¹¹⁹).

Problem: The twin ecological and digital transitions are beginning to affect every part of Europe’s economy, society and industry, requiring new technologies, with investment and innovation to match, creating new products, services, markets and business models as well as shaping new types of jobs that do not yet exist. Accordingly, Europe’s industry must become the accelerator and enabler of change and innovation, affirming its voice, upholding its values and fighting for a level playing field in the industry.

Objective: Supporting competition within the EU as well as overseas, the EU shall continue its efforts to uphold, update and upgrade the world trading system. In particular, it shall adjust its industry in a more climate-neutral manner in line with the goal of becoming the world’s first climate-neutral continent by 2050. To become more competitive as it becomes greener and more circular, industry will need a secure supply of clean and affordable energy and raw materials. Enhancing its industrial capacity in critical digital infrastructure as well as modernising and decarbonising energy-intensive industries are a top priority. Building a more circular economy, skilling and reskilling along with investing and financing the transition are also subject of the Communication. Lastly, increasing links between different products and services across sectors is crucial in order to promote the integration of Europe’s industry, its diversity, traditions, and people across value chains and borders.

Subject Matter: Specific actions include the adaptation of the SME Strategy for a sustainable and digital Europe, the Single Market Enforcement Action Plan and the Single Market Barriers Report, the establishment of a Single Market Enforcement Task-Force. Additionally, a follow-up to the European Data Strategy to develop an EU data economy, including the launch of common European data spaces in specific sectors and value chains. An action plan on the Customs Union in 2020 to reinforce customs controls, including a legislative proposal for an EU Single Window to allow for fully digital clearance processes at the border and a White paper on an instrument on foreign subsidies by mid-2020 have also been announced. Updating the Skills Agenda for Europe in 2030, including a recommendation on Vocational Education and Training, launching a European Pact for Skills and a communication on a European Education Area Strategic Framework shall promote EU’s new industry strategy. The Commission shall strive to increase the political ownership of the strategy, suggesting a standing progress point at the Competitiveness Council and at the European Parliament, done on the basis of a regular monitoring of the strategy’s implementation and analysis of a set of key performance indicators.

Non-legislative Act: On the 10th of March 2020 the European Commission published a Communication¹²⁰ on identifying and addressing barriers to the Single Market (press release¹²¹).

Problem: Although the European Single Market is the world’s largest single market, with more than 447 million consumers and up to 56 million jobs that depend on the trade, businesses, and consumers still report many hurdles, admitting that the single market was not sufficiently integrated. Therefore, taking into account the experiences and perceptions of businesses and consumers who try to use the single market on a daily basis, the Commission identifies key barriers to EU’s Single Market.

Objective: The five main root causes for the barriers that include regulatory choices at EU and national level, transposition, implementation, and enforcement of legislation, administrative capacity and practices in the member states, general business and consumer environment and root causes not linked to public policy such as language or culture. These shall to be adequately addressed in order to promote digitalisation of the public administration and better communication to help users’ along their journey, new and improved EU legislation where necessary, better implementation and ultimately enforcement. Thus, the single market shall be adapted to today’s challenges by the help of the Commission and its support to the member states.

Subject Matter: All single market, and e-government-relevant Multiannual Financial Framework proposals are to be adopted by the member states as well as the European Parliament in order to finance new standards, IT tools (such as the Internal Market Information system (IMI)), citizen and business services (such as SOLVIT) or awareness-raising campaigns. In particular, the Digital Europe programme and the Single Market programme. They shall further adopt pending legislative proposals which aim to tackle the root causes of the barriers identified in this Communication. Additionally, the Commission will assess the need for further regulatory action to address the barriers depending on other root causes which can be addressed at EU level, as well as report the results. Member states are advised to step up efforts to comply with single market legislation, abating existing barriers and avoiding the creation of new ones, fulfilling their legal duties and taking their responsibility to address the root causes that are within their remit such as burdensome regulation and procedures.

Non-legislative Act: On the 30th of September 2020 the European Commission published a Communication¹²⁶ on a new ERA for Research and Innovation (press release¹²⁷).

Problem: In 2000, as a means to address the fragmentation of the EU’s research and innovation system, the European Research Area was established. Although the EU is still a global leader in research and innovation, its performance has stagnated since 2012. In the context of global competition and volatile geopolitical interests in addition to the COVID-19 pandemic, new vulnerabilities have been detected. Therefore, mobilising research and technological capacities, specifically in less developed regions within the EU, will be instrumental in promoting EU’s ability to autonomously source and provide crucial raw materials, technologies, and services that are safe and secure for industry and people.

Objective: The European Research Area was initially created with the aim of building a common scientific and technological area for the EU and creating a single market for research and innovation fostering free movement of researchers, scientific knowledge and innovation, and encouraging a more competitive European industry. In the light of current challenges, the new R&I ERA shall boost Europe’s recovery after the COVID-19 pandemic as well as support its green and digital transitions by supporting innovation based competitiveness. Fostering technological sovereignty in key strategic areas in addition to identifying policies and measures to improve preparedness and enhance resilience in respect of clean technologies for the next decade are crucial. Through an optimal approach, Europe’s green and digital transformation is to be accelerated and Europe’s resilience and preparedness to face future crises is to be strengthened. Lastly, Europe’s competitive edge in the global race for knowledge shall be encouraged.

Subject Matter: Member states need to re-affirm the 3 per cent EU GDP R&D investment target and update it to reflect new EU priorities. The Commission, on the other hand, is to support member states in the coordination and prioritisation of national R&I funding and reforms, between countries and with the EU, through dialogue and a dedicated ERA Forum for Transition. R&I policies shall be reformed within the member states in order to facilitate the coordination and complementarity of national and EU programmes, and contribute to the deployment of the recovery package. The Commission proposes to institute a dedicated work stream in the ERA Forum for Transition to promote and monitor access to excellence of researchers and institutions from Widening Countries. In cooperation with the member states and stakeholders, the Commission shall enforce the implementation of the New Industrial Strategy by jointly developing common industrial technology roadmaps by the end of 2022. Lastly, the Commission will built on the lessons learned from the Horizon Europe Strategic Planning process, develop with Member States an approach to set and implement strategic priorities that deliver on the ERA agenda.

Non-legislative Act: On the 29th of September 2021 the European Commission published a Communication¹²⁸ on European Missions (press release¹²⁹).

Problem: Climate and health crisis call for a new way of working across policy areas, fields of expertise and science, directly engaging with companies, local communities and the innovation community. So-called EU Missions will promote societal actors to join forces in new and innovative ways, conducting research and innovation in policy areas that have brought health and socio-economic challenges in the past several years.

Objective: The overall aim of EU Missions is to address societal challenges and reconnect citizens with the European Union by inspiring and empowering them to improve their lives and those of others. By supporting at least 150 European regions and communities to become climate resilient as well as restoring the oceans and waters by 2030, EU shall adapt to climate change. Through prevention and cure, the lives of more than 3 million people affected by cancer and their families shall be improved. 100 Climate-Neutral and Smart Cities in addition to 100 living labs and lighthouses are to be developed by 2030. Research and innovation based on each mission’s concrete targets will set the direction to achieve results. Basic and applied research, actors sectors and domains can demonstrate, scale up and replicate existing and new solutions including social innovations. By allowing tailor-made innovation approach including social innovation, solutions shall be fully adapted to fit local circumstances.

Subject Matter: Through panels, the Adaptation to Climate Change mission will support participating regions in consulting and directly involving citizens. In the Climate- Neutral and Smart Cities mission, the selected cities will involve their citizens in drawing up the objectives of “Climate City Contracts” to help reach climate neutrality by 2030. The active involvement of citizens’ locally organised approaches will continue during the implementation, building ownership and legitimacy of the actions that the local authorities launch. Young people are invited to help protect the planet through a planned Climate initiative under the European Solidarity Corps. Therefore, the Commission will mobilise the appropriate instruments and resources in pursuit of the missions’ objectives, i.a. taking 1.89 billion from the Horizon Europe programme for the period 2021-23. The implementation of EU’s five Missions are to be assessed by the Commission no later than 2023. Cooperation with member states, local authorities, researchers, innovators, the private sector, citizens, civil society and investors in addition to the input of the European Parliament will be crucial.

Non-legislative Act: On the 24th of September 2020 the European Commission published a Communication¹³⁰ on a Digital Finance Strategy for the EU (press release¹³¹).

Problem: Consumers and businesses are increasingly more prone to access financial services digitally, while innovative market participants are deploying new technologies, and existing business models are shifting towards digital finance. Particularly with regard to the COVID-19-pandemic, a growing proportion of in-store payments are now digital and contactless, and on-line purchases (e-commerce) have significantly increased. Therefore, as more people access financial services online and financial sector employees themselves work remotely, ensuring safe and reliable operation of digital infrastructures has also become more important.

Objective: Supporting EU’s digital transition as well as innovative projects across member states will contribute to the overall digital transformation of its economy and society and additionally bring significant benefits to both consumers and businesses. It is the objective to make the benefits of digital finance available to European consumers and businesses, along with promoting digital finance based on European values and a sound regulation of risks. The Commission prioritises the tackling of the fragmentation in the Digital Single Market for financial services so that European consumers can obtain a better access to cross-border services and European financial firms’ can scale up their digital operations. The EU regulatory framework shall facilitate digital innovation in the interest of consumers and market efficiency. Furthermore, creating a European financial data space can help promote data-driven innovation, while building on the European data strategy can facilitate access to data and data sharing within the financial sector. Lastly, the EU plans to adequately address new challenges and risks associated with the digital transformation.

Subject Matter: Specific measures include a proposal by the Commission as part of a broader initiative on AML/CFT addressing member state to harmonise rules on customer onboarding and to implement an interoperable cross-border framework for digital identities. Additional harmonised licensing and passporting regimes, cooperation with the ESAs to strengthen EFIF, and establishing an EU digital finance platform to foster cooperation between private and public stakeholders will further be explored. A new legislative framework for crypto-assets, including asset-referenced tokens and utility tokens, will help the Commission ensure that potential material regulatory obstacles to innovation stemming from legislation on financial services are removed. It will regularly provide interpretative guidance on how existing legislation on financial services is to be applied to new technologies. Moreover, a new strategy on supervisory data that shall be proposed in 2021 and a legislative proposal for a new open finance framework by mid-2022, building on and in full alignment with broader data access initiative have been announced. Finally, the Commission will propose by mid-2022 the necessary adaptations to the existing financial services legislative framework with respect to consumer protection and prudential rules, in order to protect end-users of digital finance, safeguard financial stability, protect the integrity of the EU financial sector and ensure a level playing field.

Legislative process completed: On July 1, 2022, the European Parliament and the Council reached a political agreement on the Regulation¹³³ on markets for crypto assets and on amending the Regulation on transfers of funds (press release¹³⁴). The regulation will protect consumers, market integrity and financial stability, as well as create a new legal framework that will enable further innovation on a safe and sound basis.

Proposal: On the 24th of September 2020 the European Commission published a Proposal¹³³ for a Regulation on Markets in Crypto-assets, and amending Directive (EU) 2019/1937 (press release¹³⁵).

Problem: In order to ensure that the EU is fit for the digital age and to build a future-ready economy that works for the people by enabling and supporting the potential of digital finance in terms of innovation and competition while mitigating the risks, the Commission undertakes one of the major applications of blockchain technology in finance, crypto-assets. Considering that as of right now most crypto-assets fall outside the scope of EU financial services legislation and therefore are not subject to provisions on consumer and investor protection and market integrity, a common approach adopted by all member states is crucial to make the most of the opportunities they create and address the new risks they may pose.

Objective: The Commission includes four main objectives that go as follows: providing legal clarity and certainty to promote the safe development of crypto-assets and use of DLT in financial services; supporting innovation and fair competition by creating an enabling framework for the issuance and provision of services related to crypto-assets; ensuring a high level of consumer and investor protection and market integrity, and lastly addressing potential financial stability and monetary policy risks that could arise from an increased use of crypto-assets and DLT. It is further highlighted the need to remove regulatory obstacles to the issuance, trading and post-trading of crypto-assets that qualify as financial instruments, while respecting the principle of technological neutrality. Additionally, the sources of funding for companies shall be expanded through increased Initial Coin Offerings and Securities Token Offerings. Limiting the risks of fraud and illicit practices in the crypto-asset markets as well as allowing EU consumers and investors to access new investment opportunities or new types of payment instruments in particular for cross-border situations are also on the agenda.

Subject Matter: For the insurance and admission to trading of crypto-assets transparency and disclosure requirements as well as the authorisation and supervision of crypto-asset service providers and issuers of asset-referenced tokens and issuers of electronic money tokens are settled. The Proposal presents uniform rules regarding the operation, organisation and governance of issuers of asset-referenced tokens, issuers of electronic money tokens and crypto-asset service providers in addition to consumer protection rules for the issuance, trading, exchange and custody of crypto-assets. Lastly, measures to prevent market abuse to ensure the integrity of crypto-asset markets are provided. The Commission shall establish a detailed programme for monitoring the outputs and impacts of this initiative, as well as monitor the effects of the new requirements.