EU plan on AI: new rules, better taxes

However, important changes are underway.

Until now, about 80 percent of the available data is stored in non-European centralised or cloud-based locations - but most of the data that is expected to be available in 2025 will no longer be stored on platforms, but rather in smart connected objects.

As a result, the European Commission wants the share of data, both stored and processed, in Europe, as well as the European share in the data economy, to correspond to its economic weight by 2030.

To do so, the commission aims to increase access to data, create a common single market for data and support European companies to take advantage of the data generated within the EU's borders.

These are the main objectives set by the commission, according to a draft of the European Data Strategy seen by EUobserver, which is to be published on 19 February, alongside the AI White Paper.

This strategy aims to generate an adequate data ecosystem in Europe to spur innovation in artificial intelligence (AI), and other new technologies such as the Internet of Things (IoT).

The priority is to develop this year a legislative framework for the governance of common European data spaces to establish what data can be used in what situations, facilitate cross-border data use and prioritise interoperability.

"The new digital strategy of the commission will ensure that the digital transformation benefits all citizens, while boosting European technological sovereignty and leadership in global digital value chains", said the commission vice-president Maroš Šefčovič at the Munich Security Conference on Thursday.

€20bn per year, for a decade

"Europe can combine its technology and industrial strengths with world-class digital infrastructure, and a regulatory framework based on its fundamental values, to become a global leader in innovation in the data economy and its applications," states the draft of AI White Paper seen by EUobserver.

However, the EU will have to increase investment levels significantly to be able to compete with the US and China.

According to the commission, the EU wants to combine more than €20bn in public and private funding per year over the next decade to develop artificial intelligence.

The commission's approach to AI will be mainly based on establishing new binding requirements for the development and use of "high-risk" applications.

The draft indicates that "high-risk" applications will be those which may pose a threat to fundamental rights and be related to specific sectors such as health care, policing or transport.

However, some say that while the EU wants to set the global standards of 'good governance of AI', over-regulation could limit Europe's capacity to innovate, especially in comparison to the US, where more "flexible frameworks" can be expected.

OECD sidestep

Likewise, the commission is evaluating competition rules to hinder the market dominance of global tech giants and foster "technologies that work for people".

"It is important that the competition rules are fit for a world that is changing fast and increasingly digital," says the draft communication on the future EU's vision due to also be presented on Wednesday.

Although the EU's competition chief, Margrethe Vestager has previously fought against unfair practices of global tech firms, the commission is considering establishing an appropriate framework for the taxation of digital giants - which would reflect the ongoing negotiations on the matter at the OECD.

"A few companies with the largest market-share receive most of the revenues, which are often not taxed where they have been generated, distorting competition and undermining a society's tax base", the draft says.

"It is unacceptable that some companies pay their taxes and others do not," it adds.

Other initiatives currently being discussed include an action plan on 6G, making data-centres more sustainable and a revision of the regulation on online identification.

After the EU's approach to AI and data economy is unveiled on Wednesday, the commission will collect feedback from industry, civil society and national governments over the next several months. Concrete laws are not expected until the end of the year.