EU's Digital Czarina Europe Must 'Wake Up' to Tech Shortcomings

As European lawmakers vote on a landmark data protection law, European Commissioner for Digital Agenda Neelie Kroes tells SPIEGEL that both governments and private companies are disregarding the Continent's out-of-date business models and infrastructure.

While once a leader in telecommunications, much of Europe now lacks the latest infrastructure for high-speed Internet connection.
REUTERS

While once a leader in telecommunications, much of Europe now lacks the latest infrastructure for high-speed Internet connection.


The European Parliament on Monday is set to hold its first vote on a sweeping package of data protection laws, strengthened in the wake of former NSA contractor Edward Snowden's leaks on spying by American and British authorities.

The package creates a first-ever unified data protection law for all of the European Union's 500 million citizens, scrapping the previous patchwork of regulations defined by each of the bloc's 28 member states. It is supported by privacy advocates, and by European Commissioner for Digital Agenda Neelie Kroes.

SPIEGEL spoke to Ms. Kroes about how the Snowden leaks have affected Europe, and about the slow pace at which Europe is modernizing its telecommunications infrastructure.


SPIEGEL: Ms. Kroes, since 2010 you've been European commissioner for the "digital agenda" -- a portfolio that runs out next year. Europe has since fallen behind in the digital economy. That's not a great record. How did that happen?

Kroes: I can only partially agree with that. Granted, we were clearly in a better position back then, like in the 1990s when we created and implemented the GSM standards for mobile telecommunications. Back then Europe was a global leader. But we also have other branches that are envied, like nanotechnology or photonics.

SPIEGEL: The tone of the reports justifying your current reform ideas is more critical. You point out that Lagos, Nigeria, has a super-fast 4G network, but the EU capital, Brussels, does not. And sluggish networks aren't the only problem. Nokia, the last European cell phone manufacturer, just sold off this division to Microsoft. Other dominant companies like Google, Amazon and Facebook are all also American.

Kroes: I don't want to sugarcoat anything. We've partially missed the connection. When I took over the digital portfolio in Brussels, many people offered me their condolences. That was how difficult the task appeared. Our telecommunications firms have gotten comfortable, and have lost their power for innovation. They were preoccupied with defending the old business models, instead of swiftly recognizing new trends. And they lacked the courage to invest.

SPIEGEL: It sounds as if you're placing the blame solely on the companies. Is the lag not much more a result of failed policy?

Kroes: We're not in China, where the government can just decide to turn an industry upside down. We in Europe can only create incentives. But the EU member states are unanimous in thinking that we must do that. I spoke with Chancellor Angela Merkel in March at the technology trade fair CeBit. That's why I'm presenting a telecom package that will clean up the main problems. In the immensely important telecommunications sector, we haven't fully implemented the communal domestic market. Europe is split up into countless telecom principalities. There are more than 40 larger service providers -- in the United States there are three.

SPIEGEL: You've caused an outcry within the telecommunications sector. Your key proposal, in particular -- to ban higher roaming fees until 2016 -- is coming up against massive resistance among companies. If €7 billion in roaming revenue disappear next year, as many CEOs say, they would be even less capable of investing. They would have to raise even the baseline charges, including for those users who can't afford to travel abroad at all.

Kroes: Those are the kind of lazy explanations that I'm talking about when I refer to the sector's complacency. It's absurd that we in Europe have done away with passport control on our borders, yet every time we go abroad, a text message warns us that calls and data usage are sinfully more expensive. I recently downloaded a newspaper on my iPad, and later paid 10 pounds for it! That must, and will come to an end. Roaming is a dead business model. It's also much more profitable for the companies if the users use their data plans abroad without the fear of being ripped off.

SPIEGEL: These days the European Council also wants to consider your plan for Europe to open up again. That's coming extremely late, and we expect little more than cheap lip service. The member states are already slashing the funds you requested to build a faster network down to €1 billion.

Kroes: I was disappointed by that as well. With the €9.2 billion that I requested, we could have used the European Investment Bank to greatly ease the development of the broadband infrastructure. I would have gladly expended that money in rural areas, where the IT industry has an especially tough time investing. But the European Parliament is taking up the issue now, so I'm highly optimistic.

SPIEGEL: Why should Europe invest more in IT when everyone is cutting back spending because of the financial crisis?

Kroes: Because the sector is a leading employer. In the last few years, almost 800,000 jobs were created in the emerging mobile apps industry in Europe alone. When I go to conferences, I often find myself talking to 14-year-olds who have already founded two Internet companies. Fostering digital innovation among the younger generation is one of the best ways to tackle youth unemployment in Europe.

SPIEGEL: As a member of a pro-business party, you shouldn't actually approve of state intervention…

Kroes: I certainly don't believe in the interventionist industrial policy of the 20th century. But sometimes the state needs to offer assistance. Think of Airbus: a successful company that would never have got off the ground if EU member states hadn't joined forces to support it.

SPIEGEL: You would like to lift roaming barriers, but Deutsche Telekom is currently making headlines with plans that are diametrically opposed to yours, such as creating a framework for keeping German Internet traffic within national borders and introducing a German "cloud" to help guard data.

Kroes: I understand why Germany is keen to promote its high security standards. But having 28 clouds in Europe makes no sense. It would be a mistake. We cannot compete in global markets if we shield all our data behind national boundaries.

SPIEGEL: Former National Security Agency (NSA) contractor and whistleblower Edward Snowden's disclosures confirmed suspicions that EU member states have long been spying on one another -- as illustrated by the cyber attack by Britain's GCHQ intelligence service against Belgacom, a partly state-owned Belgian telecom company. What do you think of that?

Kroes: I might be a bit jaded, but to be honest, I wasn't surprised. When I was a member of the Dutch government in the 1970s and dealt with the intelligence services, they warned me against discussing sensitive matters on the telephone. I would always meet people in person to talk about critical issues.

SPIEGEL: Do you seriously recommend that the European public does the same?

Kroes: When people post everything on Facebook but then ask me to protect their privacy, I have to say: Take responsibility yourself!

SPIEGEL: But that doesn't give secret services the right to access people's private data…

Kroes: No, and that's where I also draw the line. I just want to say that people shouldn't be naive and assume that their online data is secure. They need to take measures to protect it.

SPIEGEL: But isn't it one of the jobs of the European Commission to protect the European public?

Kroes: Of course we need to defend our citizens and our economy. But you also have to recognize the limits. If we in Europe cannot agree on a common defense strategy against cyber attacks, how can we speak with one voice on the NSA?

SPIEGEL: Isn't it a bit cowardly to continue talking to the US about a free trade agreement, as though nothing had happened?

Kroes: Those are your words. But you do have a point. It obviously doesn't help our credibility when Britain, a member of the EU, is spying on Belgium, also a member, even if it was supposedly acting within UK law. It makes it hard to take the moral high ground.

SPIEGEL: Did Edward Snowden do the European public an important service with his revelations?

Kroes: His methods may well have been questionable, but the fact that this information is now public is by all means very useful.

SPIEGEL: Your colleague Viviane Reding -- the EU Commissioner for Justice -- publicly thanked Snowden. She believes that thanks to him, countries such as Germany are now taking the issue of European private data protection more seriously.

Kroes: I wouldn't go that far. But the Snowden affair showed us all that we need to wake up. We need a strong European IT industry. And we need to be more vigilant about what happens to our data.

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danm 10/21/2013
1. optional
Kroes said some odd things. No sector should be funded soley on the prospect of job creation. That is a factor in the efficient allocation of capital but it can hardly stand alone. And her reference to 14 year olds starting tech companies and how this is proof that tech can solve the youth unemployment problem is absurd. A 14 year old starting their own company is an extreme outlyer and not a valid point for plotting lines on macro economic decisions.
td2554 10/22/2013
2. misplaced priorities ?
In France the telecommunication industry was quite innovative while under government management. It changed, not necessarily for the best, when privatization and competition were imposed by the EU lawyers and economists. Then engineers had to focus on playing managers instead of innovating. The EU should focus on reforms which really improve things, such as cooperation for GSM or cross boundary mobility. But EU technocrats, in their lust for more influence, decided to interfere with the way each country runs their innovative system. And it didn't work very well. Each big national state has more influence on their internal market and companies than the EC does, and it will remain so. And they work in quite different ways. So it would arguably be better for the EC to focus on reforms which cannot be done at national level (cooperation, cross boundary mobility), rather than trying to take more responsibilities from member states which the EC cannot use properly. There is also a question of equilibrium, and it may be that lawyers and economist have too much influence compared to scientists, engineers and managers in the current framework.
hghcape 11/10/2013
3. Neelie Kroes
An impressive response to excellent questions. My praise goes to Ms Kroes: for a politician she has her head screwed on right. Wished we all had more of her caliber.
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