eIDAS 2.0: Digital Identity Services in the Platform Economy

Secure electronic interactions are the backbone of an economy fit for the digital age. However, the current European framework for digital identity solutions, provided by the eIDAS Regulation, has several shortcomings that have rendered it outdated. Most notably, the regulation has a strong focus on public authorities and works on a voluntary basis for Member States, which in practice means that a big percentage of the European population is not covered.

In view of this, in June 2021, the European Commission made a new proposal for a revised framework, known as eIDAS 2.0. This proposal addresses the shortcomings of the original regulation and proposes to create of a European Digital Identity Wallet (EDIW) valid for public and private services and readily available to European citizens and businesses alike.

In this new CERRE Tech, Media, Telecom issue paper, Research Fellow Christoph Busch scrutinises the changing regulatory framework for digital identity solutions in the platform economy. The issue paper identifies vital regulatory issues and makes policy recommendations for an innovative and competitive identity ecosystem that may benefit all players.

The issue paper identifies and gives recommendations on four main issue areas:

• Market structure for digital identity services: States will need to decide whether they provide the EDIW through a single state-sanctioned app or allow for competition between different providers. The latter choice seems most adequate for consumer choice and innovation.
• Cybersecurity and privacy: Uptake of the EDIW will crucially depend on the perceived security of the application. That is why a privacy-by-design approach should be favoured, including privacy-friendly alternatives to the unique and persistent identifier proposed by the Commission such as a ‘unique per service’ identifier.
• Governance of digital identity services: The adoption of this legal framework is expected to cause a sharp increase in the use of digital identity and trust services. The governance framework should thus be adapted accordingly, including the creation of a ‘European Digital Identity Board’ that ensures coordination among Member States and other European Boards on relevant topics.
• Expanding the digital identity framework: The eIDAS 2.0 framework should allow for digital identities of businesses and even an ‘identity of things’ for connected Internet of Things objects that will likely be needed in the near future.