How Technical Standard Setting Affects European Union Digital Policy Implementation.

This paper asks whether the implementation of EU digital policy through technical standard setting is leaving windows of opportunity open for US tech groups to lead the policy agenda. The publication of harmonised technical standards is central to operation of EU legislation. The European Commission issues mandates to European Standardisation Organizations (ESOs) to develop harmonised EN standards which are recognised in the implementation of EU legislation. US tech groups exert influence by developing and promoting ready-made, technically mature standards, which are being established as interoperable standards through ISO and IEC and subsequently published as European Standards (EN), without the need for separate European standard development. Empirically, the paper investigates their use under the Data Act, Data Governance Act, the Digital Services Act (DSA), the EU Cloud Code of Conduct (CoC), and the Artificial Intelligence (AI) Act. Technologies, such as algorithms, digital watermarking and fingerprinting and AI-based recognition systems, combat illegal platform content such as disinformation, deepfakes and copyright infringement. For example, Article 50 of the AI Act requires providers of generate synthetic content (text, images, audio, video) to ensure outputs are detectable as artificially generated. Digital watermarking is a technical solution which meets this requirement. The US based C2PA, an industry-led standards organisation, whose members include Adobe, Intel, Microsoft, and Google through its Research division, is developing tamper-evident metadata/watermarking for AI detection. C2PA is also useful in the detection of deepfakes which can pose a systemic risk to a VLOP service and public discourse as defined under the DSA (Article 5). The C2PA Content Credentials standard is currently being processed as an ISO standard. Adobe, Google, Microsoft, and OpenAI are supporting its ratification. If C2PA becomes the dominant global standard, it reduces the agency for the EU adopting a non-interoperable, EU-only solution. US tech groups argue that such ISO standards already meet EU criteria for implementation without the need for a new EN standard. Arguably, the EU benefits from the interoperability of standards, but US groups clearly maintain control over the technical development and speed of the standards’ development. These groups are shaping digital watermarking standards, not only for their own products, but for the entire industry. Theoretically, the paper analyses the recent revival of Schumpeterian innovation theory which promotes minimal market constraints, rapid scaling, and a high tolerance for market disruption. This high-risk-tolerance approach is promoted by leading US tech groups through the Schumpeter Project on Competition Policy, backed by the ITIF, which is heavily funded by Google and Amazon and also receives substantial support from Apple, Meta, and Microsoft. The EU's regulatory strategy largely rejects this approach, prioritising competition and market structure over unconstrained large-scale innovation. However, the choice of standard setting is counter-intuitive allowing policy implementation to be steered by large US tech groups. The analysis shows that the EU approach, while intended to curb US tech dominance in digital markets, reinforces a strong role for private governance with limited EU oversight.