borabajk -

Interview: EU data chief Ulrich Ahle on obstacles to Europe’s digital single market

EU data scheme Gaia-X is trying to plug the UK into Europe’s planned digital single market as opposition mounts to efforts to extend the reach of Europe’s vast and controversial data laws over global supply chains

Ulrich Ahle, the new chief executive of European Union (EU) data scheme Gaia-X, has been embroiled in a global political tussle over what rules should govern cross-border data flows. Responsible for implementing part of the software infrastructure for a planned European digital single market, his ambition – and Europe’s – is even greater still: a data ecosystem that will span the globe. But it is not a simple affair – not the software architecture, nor the geopolitical context into which it is being introduced.

The complex clockwork of technical blueprints, developed by the European industrial giants which constitute the Gaia-X consortium, promises a system of seamless and effortless data exchange that brings universal interoperability to otherwise incompatible firms, industries, countries, public bodies and people, even when they are separated by national borders and beholden to differing legal systems.

That’s the idea. But its system instantiates political decisions that are distinctly European. Other countries, including the UK, Japan, the US, and other Pacific and anglosphere nations, have been lobbying for a more liberal global regime of cross-border data governance than that being pushed from Brussels.

Those political differences have created an impasse. Ahle, meanwhile, is just trying to help German automotive, French aerospace and agriculture, Spanish hospitals and other organisations modernise their global supply chains. They rely presently on dataflows built from old technology so cumbersome that they want for agility and efficiency, and are so expensive that none but the largest suppliers can connect to them, he says.

Gaia-X has spent six years building a system that would help them – an ecosystem, called a dataspace, that allows companies, public bodies and people to plug into one another’s data pipelines as easily as blocks of Lego, yet as securely as airport immigration. It promises to make digital business and civil affairs as dynamic as in the real world.

Gaia-X has committed to building EU values into this ecosystem, and Ahle admits this has become an obstacle. First though, what “EU values” does he mean? “Fairness”, “trust” and “digital sovereignty”, he says, as enshrined in the vast body of law the EU enacted in recent years under its controversial digital agenda. “Sovereign, trustful data management is the framework for all our activities,” says Ahle. “[They] are all based on these European values and European regulations.”

This has proved controversial, especially “digital sovereignty”. For that, Gaia-X is building into Europe’s digital market a device that would do for data what digital rights management did for music, video and software. This is essential, says Ahle, for owners to monetise their data. It will also allow Europe to assert sovereignty over data sent beyond its borders: software rules will control who can access data, for how long, and what they can do with it.

Software architecture

Dataspace software will negotiate data access conditions between previously unknown parties, so that anyone who might have a legitimate need for it can just plug in and get it. The system verifies their identity, negotiates smart contracts and enforces terms. It connects data sources using standard formats for discovery and access. Software standards ensure data flows always behave in precisely the same way.

The result is a digital market, shorn of the myriad differences in the way such data processes are implemented today by different firms, by different industries, in different countries, that makes data commerce costly and prohibitive.

“Since you don’t know who will access [your data], you don’t know if they can be trusted. So, you enforce controls,” says Ahle.

“Our users have global business processes,” he adds. “This requires interoperability with solutions created in other regions under different legal conditions. The auto industry, for example, needs the [IT systems] supporting its global processes to be adopted globally. We are working on this intensely with Japan.”

Japanese car crash

Data laws in Japan are not identical to Europe’s burgeoning statute. Ahle believes Gaia-X doesn’t expect them to be. Yet the intense work he is doing with Japan concerns problems that derive from their legal differences.

These differences have created a problem so acute for Germany’s powerful car industry that when, in October, it celebrated the modernisation of its supply chain with the launch of the first Gaia-X dataspace, it did so without any foreign suppliers being connected to it. Vital Japanese auto suppliers were notably absent.

“Since you don’t know who will access [your data], you don’t know if they can be trusted. So, you enforce controls Our users have global business processes. This requires interoperability with solutions created in other regions under different legal conditions”

Ulrich Ahle, Gaia-X

Surely, if Japanese auto suppliers wanted to exchange data with European manufacturers in a cross-border dataspace, they can just do so? The EU formally sanctioned dataflows with Japan in a “mutual adequacy arrangement” in 2019, after all. Ahle says it’s not enough.

“They need to be able to share their data trustfully,” he says. “We need the aforementioned rules in place.”

Ahle means EU data laws. Crucially for Gaia-X, it includes the eIDAS regulation by which Europe attempted, with limited success, to create a single, continent-wide network of mutually interoperating digital identity systems.

“Japan doesn’t have something like eIDAS,” he says. “This needs to be done, whether they use eIDAS or a similar regulation.” 

Ahle is working with Japanese colleagues to map similarities and differences between their digital identity systems to work out how to make them interoperable.

Data governance

The same problem has the international community locked in negotiations over cross-border data governance, urged by Anglo-Pacific opposition to EU regulation. The same mapping exercise consequently became the focus of work started this month at the OECD, under its remit to clear the legal and technological clots that have been blocking global data flows and stifling free trade.

The EU and Japan made a breakthrough in late April, when they agreed to do this, too. US-EU trade negotiators did this last year and demonstrated just how complex it is. OECD negotiators must do it for the world.

Ahle thinks Gaia-X and its Japanese partners will have a fix, and a working EU-Japan automotive dataspace, within the year. They plan to agree a de facto ID standard they can start using now, and will lobby to have it made a global standard at the International Standards Organisation.

Meanwhile, Japanese firms such as Denso, one of the world’s largest automotive suppliers, still exchange supply chain data with German manufacturers over connections made from old, cumbersome, electronic data interchange (EDI) technology, he says. Yet automotive association Catena-X launched its Gaia-X dataspace in October. How could it without global suppliers included?

Because the auto firms that built Catena-X did so with German state funding, says Ahle, “so only German companies participated in its development”, whereas “Catena-X has started just in Germany”.

Read more about the EU’s digital plans

Even if they had the money, foreign firms must be persuaded to invest in dataspaces. “It’s a revolutionary idea,” he says. “We need to convince companies of the benefit. The technology is also still in development.”

The task is immense. The global automotive supply chain contains tens of thousands of firms. And that’s just automotive, says Ahle. Gaia-X proposes the same transformation of IT systems and business processes in the whole manufacturing industry, and in all sectors of industry and society, across the entire globe.

“It can’t be done overnight,” he says. “It will take years to bring the whole global economy onto this approach.”

Third way

Gaia-X hopes that Japan will develop dataspaces that interconnect with Europe’s as the internet does with networks, creating “a seamless collaboration of dataspaces”, a global federated data market, compatible with EU law.

The Japanese government’s Ouranos dataspace strategy proposes a third way, however, between Europe’s “protectionist”, sovereign digital market and a US market that, though free, is stifled by proprietary data standards and dominated by oligarchical big tech firms, the Japanese government digital strategy said in January. It wants a data ecosystem more open to foreigners than Europe, more regulated to use open standards than the US.

Japan has been pushing for a liberal digital order in international fora, under its initiative for “data free flow with trust”, since Gaia-X was formed in 2019. It drew a concession from Europe in April – that any global cross-border agreement not dictate regulation but let it be. On the same day, the Anglo-Pacific group published long-awaited details of its liberal answer to EU legal hegemony, the Global Cross-Border Data Rules (CBPR) for cross-border data governance, with that approach at heart.

It would commit countries to maximise cross-border dataflows as much as they sought to protect personal data, and allow any manner of regulation as long as it met a common-denominator standard. The UK, still under pre-Brexit data law, backed it informally.

UK bid

Ahle says he is preparing a new bid to persuade the British government to back its EU dataspace regime. The UK has long ignored Gaia-X’s pleas for this. It seemed final last year after a personal bid by then Gaia-X CEO Francesco Bonfiglio failed. UK policy has since diverged further from Europe, and Gaia-X has become more European than ever.

Muscling in last year, the European Commission declared it would formalise an EU dataspace model by extracting bits from initiatives such as Gaia-X. It would make all dataspaces adhere to it if it came to it. Its digital agenda programme to create a single digital market runs out of time after European elections this year.

Gaia-X, formed the same year as the current commission, is prominent among countless EU dataspace schemes that have created a babel of incompatible dataspace “data silos”. The commission intervened to get the single, federated EU dataspace, the single digital market that it and Gaia-X have been striving to build.

Does Britain’s pledge of support for CBPR suggest Gaia-X is simply not relevant to the UK? Ahle says he doesn’t know what CBPR is.

What, then, is the case for the UK to back Gaia-X? He says it will boost Britain’s economy. EU governments have put hundreds of millions of euros into it – so what does Gaia-X want in return besides public funding? Only for the UK to recognise EU digital agenda laws governing “fair and sovereign data management”. Its last UK bid was billed as a “lifeline” for Brexit Britain.

Read more on IT legislation and regulation

Data Center
Data Management