With Soft Law, European regulations GDPR and PSD2 create world influence
In a world now dominated by only two superpowers, the USA and China, Europe is trying to find ways to keep its existence on the international scene. This move is driven though soft law, such as non-binding resolutions, declarations, and guidelines created by governments and private organizations. Technical standards like GDPR or PSD2 play an essential role in this influence strategy.
Europe is no longer conquering the world as it had been doing over the past centuries, however, the European Union serves as a model to several other state groups around the word. Since the 1950s, member states in the EU have been ready to surrender some of their sovereignty to a meta-entity, to share leadership and to build strong legally based institutions. This construction even if it has been through some hiccups, has led the EU to live in peace for more than 70 years.
Around the world, the Association of South East Asian Nations (ASEAN), the African Union (AU), the Gulf Cooperation Council (GCC), and the Mercosur in South America, among others are emulating these principles in creating a meta-state that will have a heavier weight than individual nations on the international stage. However, none of these entities has yet been as far as the EU in setting up formal and informal rules and spreading them worldwide.
More generally, the regulation aspect of the EU leads it to influence the rest of the world. In our industry, European influence comes through regulations and technical standards. Our industry is full of European technical standards that have demonstrated their worldwide success: GSM, EMV, and even the smart card concept and technology altogether were created in Europe, developed in Europe and have now gained a global acceptance.
The latest European sets of rules in our industry, GDPR (General Data Protection Regulation and PSD2 (2nd Payment Services Directive), are part of this influence approach. Through these standards, Europe organizes its own operations, but also influences the rest of the world as European regulatory bodies can decide the conditions of trade with other nations based on their acceptance of the same principles. This way, privacy rights, data ethics, open banking, the opening of financial transactions to new entrants, make their way towards many countries’ regulations.
Going from technical topics like GDPR and PSD2 to their significance and how they can influence the world is the topic of the speech I will give on Tuesday November 27th, titled “GDPR, PSD2, and ethical and democratic values: do these new regulatory environments support or alter democracy and ethical values?” during Trustech, the main event for the digital trust technologies, taking place in Cannes, France, on November 27-29.