NOV 11, 2019. In her mission letter to the Commissioner-designate for the Internal Market, Ursula von der Leyen stressed the importance of “investing in the next frontier of technologies (…), jointly defining standards for 5G networks and new-generation technologies”. The inclusion of these issues as priorities for the next EU political cycle is significant and should be welcomed as a positive sign that the new European Commission recognises the critical importance of standard development for the EU.
At the same time, the mission letter stresses that it is important to ‘’take a close look at our intellectual property regime to ensure that it is coherent, is fit for the digital age and supports our competitiveness’’. This is a solid starting point, although the word “global” could and should accompany the notion of Europe’s “competitiveness”. Underpinned by the recognition that European innovators, from multinationals to SMEs, need a level playing field to compete in a global economy, these objectives should form an integral part of a relaunched EU industrial strategy.
That being said, each of these three priorities (i.e. ensuring EU participation in standard development, intellectual property rights, global level playing field) must not be looked at in isolation. They are inexorably linked, and the EU cannot aim to achieve one without taking into account the other two. The European Commission’s ability to handle this delicate balancing exercise in respect of specific policy files and across different DGs will, to a large extent, determine the EU’s success in achieving its ambitious agenda over the next five years.
It is a little-known fact that the foundational technology commonly known as 5G, like 4G before it, is developed by 3GPP, an industry-led framework bringing together leading R&D companies, big and small, research institutes and seven regional standard development organisations (including ETSI, the European Telecommunication Standards Institute). Among the leading developers of the 5G standard are European companies like Ericsson, which invest significantly in R&D targeted at standardisation. Cellular technology is developed in full respect of WTO TBT principles, i.e. in a way that is open, collaborative and consensus-driven.
This model dates back to the European success of 2G/GSM and has for well over 20 years driven innovation, fostered competition and allowed for consumers to benefit from constantly improving performance, choice and price. Today, however, the model is under serious pressure as some of the world’s top implementers of cellular standards do not license, or delay licensing, the patented technologies they use. As a result, European players face increasing difficulties to sustain their involvement in standardisation work.
At the same time, some third countries are pursuing industrial strategies that seem bent on ensuring that their national contenders become global champions in this field; while in the wider ICT arena some dominant global platforms increasingly push proprietary technologies, thereby creating a “winner takes all” environment. Looking ahead, if the core technologies connecting the world end up in the hands of just a few, there is no guarantee that standard development will continue to be open, collaborative and consensus-based. In an IoT world where everything is connected, the implications of such an outcome for European innovation, growth and jobs could be substantial and far-reaching.
It is therefore encouraging that President von der Leyen recognises that, in addition to speeding up the roll-out of 5G infrastructure in the short term (which must remain the absolute top priority), the European Commission must also ensure that Europe retains its role in the development of cellular technology. As recently noted by the European Policy Strategy Centre, the Commission’s in-house think tank: “Ultimately, the ability of the EU and European stakeholders to shape rules and standards governing digital technologies (…) also relate to the EU and its Member States’ ability to uphold their interests and values over the long term.”
Heeding these words will be critical to preserve what, until now, has been a remarkable European success story.