A new era for the global digital economy

By placing the region ahead of the curve on issues such as artificial intelligence (AI), access to non-personal data, online platform conduct and fair competition in digital markets, among others, it hopes to shape the next era of global digital innovation.

This ambition lies behind an unprecedented wave of digital regulation that has been recently enacted or is in development. With its Data Act 1  and Data Governance Act 2 , for example, the EU hopes to unlock untapped economic potential by requiring businesses to share non-personal datasets. Through the AI Act, 3  the EU wants to be the first to define and mitigate the risks of AI, while unlocking its opportunities. 

The Digital Services Act (DSA) 4  regulates online intermediaries and platforms for offering a safer environment for users and consumers and also to prevent illegal and harmful activities online and the spread of disinformation. The Digital Markets Act (DMA), 5  meanwhile, aims to curb the dominance of ‘gatekeepers’ in the digital economy, boosting fairness and competition. And with various new cyber safety regulations, the EU is shoring up protections against increasingly destructive threats that permeate our digital lives. 

New regulations such as these are already shaping the global landscape. Every business that has contact with the EU must comply with them, whether is it because they are based in the EU or they target the EU public. As international businesses tend to align with the strictest regulatory standards, EU rules often become global standards. And countries outside the EU are already following its example with comparable legislation. 

The UK, for example, is likely to largely mirror the EU’s regulatory regime, but with some key differences that businesses need to be aware of to prevent their regulatory obligations from becoming too burdensome. For instance, the Digital Markets, Competition and Consumers Bill, 6  which introduces a new regulatory regime for large digital platforms in the UK, will differ from its EU counterpart in some respects including the criteria for companies to which it applies and how it will be enforced. In-house counsel across sectors need to be aware of these disparities and understand the implications for their organisations.

Digital regulation on the agenda

Legal counsel recognise what’s at stake. Over three quarters of our survey respondents (76%) agree that the ability to adapt to regulation will determine who succeeds in digital business in the next five years. And they know they can’t wait: 73% agree that acting quickly on new regulation is essential to keeping pace with digital innovation.

In-house legal counsel are generally optimistic about digital regulation. Only 17% believe that it poses a strategic threat to their organisation. This belief was most common among online platforms and intermediaries, but still only a quarter of these agree. 

And respondents are remarkably confident of their ability to adapt: more than seven in ten believe their organisation is better prepared for the impact of digital regulation than its competitors. This confidence is highest among respondents in the automotive
sector (see Figure 1.)

As we’ll see in the following chapters, recent and upcoming regulation in four areas – non-personal data, AI, digital platforms and digital safety – presents opportunities and challenges. Understanding these will help businesses prepare for success.

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