Divided Digital Europe: The Continent Connects at Different Speeds

Photo: A visitor uses her mobile phone in front of an electronic board in the atrium of the European Council building in Brussels, Belgium, February 2, 2016. Credit: REUTERS/Francois Lenoir
Photo: A visitor uses her mobile phone in front of an electronic board in the atrium of the European Council building in Brussels, Belgium, February 2, 2016. Credit: REUTERS/Francois Lenoir


The European Union (EU) aims to become the global leader in regulating tech. It has moved at laser speed to enact landmark legislation designed to transform the digital domain and set the rules governing the Internet’s future.

An initial goal was to leverage Europe’s 500 million consumers. In May 2015, the European Commission launched an ambitious Digital Single Market program designed to break down barriers across the EU’s 27 member states.1  Through 16 initiatives — including an end to unjustified blocking of content at national borders, a revamp of copyright rules, and an overhaul of telecommunication rules — the commission aimed to unite the EU’s fragmented digital economies.

In 2016, the commission changed gears and pressed ahead with ambitious plans to curb what it perceived as the Internet’s excesses, in particular, privacy-invading personal data collection. The continent’s General Data Protection Regulation (GDPR), which went into force in 2018, attempted to set a gold standard for privacy protection, insisting that consumers give consent to any data collection.2  Companies and countries around the world rushed to adopt similar privacy rules.

A new European Commission took office in December 2019 and launched a debate on what it dubbed “digital sovereignty.”3  The term signaled a determination to “catch up” to Asian and US tech leaders and ensure that the EU retained strategic autonomy in the digital world.

At the same time, the new commission redoubled its regulatory offensive. Antitrust cases against Google, Apple, and others had dragged on for years, producing multibillion-euro fines, without any perceptible change in their business models.4  Then, in December 2020, the commission proposed two major pieces of legislation, the Digital Services Act (DSA) and the Digital Markets Act (DMA).5 6  

The DMA targets large tech companies, dubbed “gatekeepers,” to spur new industry entrants and increase competition. It prohibits them from favoring their own services and collecting data from different services. Violators risk huge fines — up to 20% of their global revenues. European parliamentarians narrowed the DMA’s scope to a handful of US giants. Negotiations concluded in March 2022 and the new rules will go into effect at the beginning of 2024.

The DSA impacts almost all Internet platforms. It obliges them to combat illegal content, including hate speech and physical products.7  E-commerce marketplaces must vet their sellers and speed up the removal of counterfeit and dangerous listings. Social media platforms must allow flagging of dangerous posts and publish new transparency reports about their algorithms, among other obligations. Additional responsibilities are assigned to very large online platforms.8  The final DSA was approved in April 2022 and will also go into effect at the beginning of 2024.

Both bills moved through the complex EU legislative process at record speed, in a little over a year. The speed demonstrates a broad political consensus on the need to increase the regulation of technology companies. By contrast, the European Commission first proposed the GDPR in 2012 and took six years of negotiations and preparations before the regulation came into effect.

Yet, like all EU legislation, both the DSA and DMA reflect compromises between positions taken by the EU’s member states. The four countries investigated in this report — France, Italy, Denmark, and Poland —offer a good picture of where Europe enjoys a consensus on tech policy and where compromises are required. Each profile examines how the country is coping with the challenge of going digital, from its Internet infrastructure to its success in building online businesses. It then analyzes each country’s position on key tech policy questions.

A surprising picture emerges. Among the four national profiles in this report, most did not conform to widely held expectations and stereotypes of regulatory approaches.

Photo: People, wearing protective face masks, walk past a 5G data network sign at a mobile phone store in Paris, France, April 22, 2021. Credit: REUTERS/Gonzalo Fuentes

Photo: People, wearing protective face masks, walk past a 5G data network sign at a mobile phone store in Paris, France, April 22, 2021. Credit: REUTERS/Gonzalo Fuentes

Start with France. One could expect France to be dirigiste. It is. It is also surprising to learn how the country has become the incubator of many of Europe’s digital success stories and is a strong supporter of modernizing its labor market by leveraging the gig economy. France boasts cutting-edge infrastructure, booming e-commerce, and 25 tech unicorns, companies with at least €1 billion in market valuation. As Aurelien Portuese notes, this success represents true “grandeur.”

But Portuese warns that France is jeopardizing its achievements with a misguided pursuit of “digital sovereignty.” Paris is tempted to pursue data protectionism, crusade against US tech superiority, and remains “naïve” about the Chinese tech threat. “France should exploit its formidable potential with a more coherent digital strategy,” Portuese writes. “Otherwise, its dreams of digital grandeur could very well drift away to digital decadence.”

One would expect Denmark to be a free-trading and export-minded country. It is. The country is a digital pioneer, the birthplace of Google’s engine for its Chrome browser, and home to some of the world’s largest data centers. It also advocates for broad freedoms of expression.

Yet, as Jan Høst Schmidt describes it, digital Denmark is also pro-regulation. It is leading the charge to rein in online marketplaces, proposing to make them liable for products posted on their sites in the name of consumer protection. Danes support spending billions of public European funds subsidizing semiconductor, cloud computing, and other European tech ventures. “Denmark should continue to insist to build a true digital single market,” Schmidt writes. “On issues such as digital taxation, Denmark wants to find a transatlantic agreement. If this is impossible, however, it will side with European solutions.

Poland sees tech as a driver of economic growth. It is home to one of Europe’s most dynamic homegrown e-commerce marketplaces and aims to improve broadband connections. US tech enjoys widespread acceptance and Warsaw is uncomfortable with the EU’s push to clamp down on the digital economy. Instead, as Annabelle Chapman writes, Poland “favors a light-touch regulation to big digital platforms, placing it among the minority free-market minnows such as Estonia."

The main clash concerns efforts to limit illegal speech. The right-leaning Polish government fears Internet platforms will be forced to use a heavy hand to moderate content. Warsaw is also uncomfortable with placing limits on the use of spyware to gather intelligence.  At the same time, the country’s Law and Justice government, in power since 2015, takes stands on cultural issues that “often puts Warsaw at odds with Brussels on content moderation, artificial intelligence, and other key digital dossiers,” Chapman writes.

Photo: Rome, 4 November 2021: President Roberto #Rustichelli hosts the European Commissioner for Justice Didier #Reynders , on the occasion of the final event of the #convienesaperlo campaign. Credit: Autorità Antitrust via Twitter.

Italy is a digital latecomer. It has lagged in Internet connectivity and resisted digitalization. Mediaset, the TV company controlled by former Prime Minister Silvio Berlusconi, for example, sought €700 million in damages from YouTube for copyright violations.9  Tech tax fines proliferated: Apple paid €318 million in back taxes in 2015 and Google was hit with a €306 million fine in 2017.10  Under pressure from taxi drivers, the government banned Uber in April 2017. 11

But Italian leaders are rethinking their reticence, pushed by lagging economic performance and the COVID-19 pandemic. Reform-minded Italian Prime Minister Mario Draghi is spending a large portion of the country’s EU COVID-19 recovery funds on digital investments. Uber now is back on the road. “Suddenly, 75-year-old CEOs who had previously refused to use a computer — and had denied employees the option to work a single day from home — were managing entire teams remotely via Zoom,” writes Janna Brancolini. “Instead of shooing away IT managers who wanted to start conversations about cybersecurity, executives began drafting digital strategies and investing in improved network protections.”

These national priorities play out in Brussels’ corridors. Traditionally, the Benelux, Baltic, and Nordic nations have viewed the digital market as an opportunity for economic growth. They take a broad view of free expression and free markets and in the debate over the DSA pushed back against attempts to make platforms liable for failing to spot illegal speech from being uploaded. In the DMA, they insisted that remedies remain proportionate.

In contrast, the EU’s Big Four — Germany, Spain, Italy, and France — tend to put strict limits on speech. They see the need for far-reaching regulation of technology companies to establish a level playing field. Their policies veer toward state intervention.  In the debate over the DSA, the Big Four pushed to increase the responsibilities of platforms to combat illegal posts. In the DMA, they demanded strong measures to limit the power of so-called digital gatekeepers.

But beyond this black-and-white analysis are surprising nuances. Should e-commerce marketplaces be liable for every product posted for sale on their marketplace? Denmark, with its strong history of consumer protection, says yes, even if Europe falls far behind in online commerce. A Danish socialist Member of the European Parliament (MEP) Christel Schaldemose pushed hard to make Amazon, AliExpress, and eBay, among others, liable for every product sold on their platform, echoing the position of consumer groups that have pressed to turn the marketplaces into “suppliers.”12

Poland, home to the local e-commerce powerhouse Allegro, says no. France and in particular Italy are ready to compromise. The marketplace liability debate first emerged during the DSA negotiations. It then reemerged in 2022 with the proposed revision of the General Product Safety Regulation, a law that defines penalties and consumer rights around the sale of dangerous products. During the negotiations, Italian diplomats signaled opposition to Nordic efforts to impose expansive liability risks on marketplaces.

The bottom line is that most Europeans agree on regulating Big Tech even if they disagree on the details. The continent came together to pass the DMA, designating a few US tech giants as gatekeepers. Poles and other Central Europeans may have more concerns about confronting the United States than Western Europeans, but they went along without much resistance. France, Italy, and Denmark fought hard for tough regulation. In Brussels, French European Commissioner Thierry Breton and Danish Commissioner Margrethe Vestager teamed up as the key digital policymakers.

Yet the crackdown contains important limits. Most European countries argue against breaking the fundamental principle against requiring online platforms to conduct general monitoring.  Reflecting this concern, the DSA requires marketplaces to improve their onboarding of merchants and to check public databases against attempts to sell dangerous products.8  It leaves the marketplaces open to consumer lawsuits but retains the prohibition against platform policing.

Caption: Video conference of the members of the European Council: Speech by President Michel to President Biden. Credit. Council of the European Union.

Photo: Video conference of the members of the European Council: Speech by President Michel to President Biden. Credit. Council of the European Union. 

When the DSA was first envisioned, policymakers planned to focus on illegal speech. They believed it represented the most poisonous type of illegal content found on digital platforms. But it proved impossible to find a common continent-wide definition of illegal speech or even illegal terrorist propaganda while free expression concerns limited how far countries could agree to crack down. France took a hard line, outlawing everything from Holocaust denial to blasphemy. In contrast, Demark opposed restrictions on freedom of expression, while both France and Italy pushed social media platforms to control propaganda and extremism. Poland pushed back against almost all restrictions on speech, fearing overreach on content control.

The resulting DSA refrained from obliging Internet platforms to remove specific forms of speech, leaving that to individual countries to define. Instead, it forces platforms to add ways for users to flag illicit content and to take actions to stop dangerous disinformation from going viral. Users gain the power to refuse recommendation algorithms. Companies will be obliged to publish transparency reports about their content moderation.

Europe’s strategy to achieve “digital sovereignty” will require similar compromises. Although most Europeans approve of the goal to improve Europe’s digital performance, they differ on tactics. Should critical industries such as electric batteries, cloud storage, and semiconductors be subsidized? If so, by how much? Should the measures contain some protectionism, or at least favor European champions? Some countries, most notably France and Germany, aim to see Europe pursue digital sovereignty by limiting data flows and subsidizing European companies. Others, led by the Nordics, see digital sovereignty as promoting European standards and values and reject most infringements on free trade. And still others, particularly in former communist Eastern Europe, fear that efforts to crack down on illegal hate speech will result in silencing legitimate conservative voices.

Upcoming digital legislation will require a balance between national positions. In December 2021, the European Commission unveiled a proposal to make most drivers for Uber, Bolt, and other gig platforms become full-time workers. The European Parliament is toughening the opt outs and a final bill is expected to be approved in 2023. Denmark, with its strong welfare state, and Italy, hobbled by strong tax unions, say yes — but crucially, France, perhaps the EU country with the most stringent labor laws, says no.

In some key policy areas, such as how to tax large tech companies, alliances within Europe are shifting. France has led a campaign to impose a levy on digital platforms requiring tech firms to declare revenues and profits and pay taxes in the countries where they sell their products, rather than routing them through low-tax European headquarters in countries such as Ireland. Initially, Denmark opposed this effort, fearing it would lose tax revenues from its tech innovations to France and Italy where they were consumed. But Denmark has now switched course out of concern that large firms were not paying their fair share.

An unresolved debate concerns state aid and protectionism. France is leading the charge. It has succeeded in lobbying Europe to launch ambitious Europe-wide programs to build electric car batteries and semiconductors.  While the battery and semiconductor projects are concrete, and receive broad Europe-wide support, fears remain over other projects, such as one to create a European cloud. Danish, Dutch, and other critics see it as a dangerous lurch into protectionism against US providers — Amazon, Microsoft, and Google —most of whom are building data centers on their territories.

Artificial intelligence (AI) remains another subject of fierce debate. Although Europeans generally agree that AI should be ethical and controlled to avoid abuses, they disagree on how to achieve this goal, arguing over the proper level of restrictions.13  Denmark, wary of slowing innovation, and wary of technology used to conduct surveillance, wants a light-touch regulation, with only a few types of high risk areas considered off-limits. In contrast, Italy and France are willing to require more restrictions. Warsaw refused to support a text on AI and human rights that included the term “gender” equality.14  The final AI act, expected to be finalized by the end of 2022, will almost certainly fall in between these positions.

Data represents a key dividing point. Europe is planning a series of new data acts, some of which could promote data localization and discriminate against US cloud computing leaders, Amazon, Microsoft, and Google.15  France is pushing hard to build a French and European cloud, limiting the role of US firms.16  But Denmark and others are skeptical and fearful that the Gallic quest for digital grandeur will end up wasting European public funds on cloud white elephants — and believe the US cloud players are indispensable.

Photo: People using their phones in the city, Denmark. Credit: Shane Rounce via Unsplash.

In some key policy areas such as privacy, a consensus prevails. All four countries that are the focus of this report supported the adoption of GDPR privacy rules. They support reinforcing individuals’ control and rights over their personal data. Little appetite — and no political pressure — exists for Europe to weaken these rules, even if they have precipitated ongoing tensions with the United States over data flows.

Where this consensus breaks down is over enforcement. At present, countries regulate companies according to where their European headquarters are based.  This system has not worked, particularly with the GDPR. Ireland and Luxembourg, home to Google, Facebook, and Amazon, have struggled to muster the resources — and perhaps the will — to investigate and impose penalties. Large countries led by Germany, Italy, and France want to put their regulators in charge. Brussels has received additional powers to enforce the new DMA and DSA, but national regulators remain able to intervene.

The lesson is clear: despite diverging national perspectives, the overall, overriding European trend is to increase tech regulation. If little Denmark agrees with big France about the need to tighten controls on giant US content platforms and e-commerce marketplaces, the EU will crack down. Google, Facebook, Amazon, eBay, and others will soon be required to up their game — or face large fines. Although Italy and Poland may be pro-digital newcomers, they will not stop the others from upping pressure and responsibilities on digital platforms.

The United States has reengaged in transatlantic cooperation on technology. After several years of impasse, the United States and Europe agreed in March 2022 to a new deal securing the transatlantic flow of data.17  Both signed up in April to a new declaration in support of a “democratic” Internet, fighting Russian disinformation and cyber threats.18  Both also are working well to coordinate sweeping technology sanctions, creating an “information mechanism” to check that no one is cheating.19  The new US-EU Trade and Technology Council (TTC), which has met twice, is becoming a powerful forum for long-neglected discussions.20

Significant as these achievements are, the United States and Europe disagree on serious issues about regulating the Internet, such as: how to pay for Internet infrastructure, whether to promote data localization, and perhaps most importantly, how much to isolate China. The United States perceives Europe’s approach as discrimination against US tech giants, even if the Biden administration’s reaction has been muted.21  In part, Washington is silent because it shares many European goals on ensuring fair competition in digital markets and in forcing Internet platforms to do more to combat illegal content. In part, too, US officials acknowledge that they can do nothing to stop the new European laws from going into effect.

Whatever the temptation, the United States should refrain from trying to divide and conquer Europe on digital policy. As this report shows, the continent’s diverse players, large and small, east, west, south and north, agree on the need for increasing tech regulation and are moving ahead, leaving the United States on the sidelines.

Europe’s divisions temper the most extreme proposals. The continent will have to answer crucial questions, both about how the DSA and DMA will be implemented and enforced, and about future regulations on issues ranging from data transfers to AI. Compromises will be required. This report attempts to illustrate how a diverse bloc of 27 nations manages to forge a consensus.

Digital Denmark: The Little Mermaid Wakes Up to Big Tech’s Risks

By Jan Høst Schmidt

Denmark is a digital pioneer. At the same time, Copenhagen has joined with France and Germany to insist on tough EU-wide tech regulation.


La France Numérique: Grandeur and Decadence

By Aurelien Portuese

French digital policy can point to undeniable tech success stories, but the French quest for digital independence creates tension within the EU.


Italy: La Dolce Vita Goes Digital

By Janna Brancolini

If Italian Prime Minister Mario Draghi cannot close Italy’s digital divide in the next five years, it will not be for a lack of effort — or money.


Proud Poland: A Pro-Digital Power Haunted by Nationalist Nightmares

By Annabelle Chapman

Often at odds with Brussels, Poland is uncomfortable with the European Union’s regulatory push to clamp down on the digital economy.


Conclusion: Bridging the Digital Divide

By Bill Echikson

The European Union is pressing ahead with sweeping technology regulations, a process that requires compromises among its 27 member states.



This report is the result of research contributed over the course of 6 months by Janna Brancolini, Annabelle Chapman, Jan Høst Schmidt, and Aurelien Portuese. All opinions are those of the author(s) and do not necessarily represent the position or views of the institutions they represent or the Center for European Policy Analysis (CEPA). A special thanks to Tyson Barker for his thoughtful feedback.

This report is part of the Center for European Policy Analysis’ Digital Innovation Initiative, which explores trends in tech policy in Europe and the United States to advocate for transatlantic unity on digital regulation. CEPA would like to thank Craig Newmark Philanthropies, Google LLC, and Microsoft for their support of this project on the importance of a common transatlantic approach to digital policy.


Photo: A visitor uses her mobile phone in front of an electronic board in the atrium of the European Council building in Brussels, Belgium, February 2, 2016. Credit: REUTERS/Francois Lenoir.

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