CME and LME states compared: the role of unions and industry associations as regulatory intermediaries in the implementation of EU Digital Sovereignty.

Research on EU digital sovereignty policy claims it is significantly different than that of the US and China with a ‘human-centred approach’ with high standards of data protection, fundamental rights, safety, and cyber-security. Arguably however, EU level policy reflects a marriage between French and German policy approaches to the regulation of digital markets rooted in national industrial policy objectives. Inescapably these objectives place EU policy closer to the more protectionist approaches taken by non-European states. The paper analyses national DS policy formation empirically with differentiation between identifiable coordinated market economies (CMEs) and liberal market economies (LMEs) according to the varieties of capitalism model developed by Hall and Soskice. Industry associations and labour unions have a large role to play as intermediaries in coordinated market economies (CMEs) such as Germany, Austria, and Nordic states which engage in neo-corporatist style bargaining. The French approach is markedly dirigiste and led by a strong national industrialist lobby. These can be contrasted to the approaches of and liberal market economy (LME) states or ‘dependent market economies’ which have taken an open market lead. In CME states where unions and industry associations hold formal roles in policy implementation, the role of intermediaries is found to be stronger than in LMEs. Overall, the finding is that the protection of national industry and jobs is favoured at the national level in CME states where these actors hold formalised power. The conclusion makes some observations about how implementation of the Commission’s technology sovereignty policy is increasingly at odds with goals of Open Strategic Autonomy.