Although Italy may be most focused on closing the digital gap, it is active in several other key digital policies as well. These include prioritizing online privacy, adopting one of Europe’s first digital taxation laws, and regulating the gig economy and other global tech giants.
Digital Spending: Italy received the largest share of the EU’s coronavirus pandemic recovery funds — €195.1 billion — and has earmarked another €30.6 billion ($34.67 billion) in national funds to bolster its planned reforms. Under the National Recovery and Resilience Plan approved last year, 25.1% of the money will go to “digitalization and innovation.” The main initiatives include expanding 5G broadband access; strengthening digital capacity at government agencies; helping manufacturing businesses digitize their production processes; and enhancing digital skills to boost the tourism and creative fields.
In January, Colao said €9.5 billion had already been allocated, including €1.9 billion ($2.51 billion) earmarked for a “national strategic data center.” The project would consolidate national and local government data, which are currently stored at 11,000 separate data centers, into one Italian cloud computing center. Originally, the goal was for the data center to be “located in Italy and controlled by Italians,” but it proved impossible to rely solely on Italian technological know-how. The bid ultimately went to an Italian company that will partner with either Google or Microsoft.
Online Privacy: Italy’s Data Protection Authority, the Garante per la Protezione dei Dati Personali, is aggressive in its enforcement of the continent’s strict General Data Protection Regulation (GDPR) rules. The Garante fines companies for marketing strategies that misuse customer data, privacy violations such as publishing contact information in online articles, and discriminatory algorithms. Targets extend beyond traditional tech companies. In January, the Garante levelled a €26.5 million ($30 million) fine against Enel Energia for what it called “overly aggressive” marketing that used customer data without permission.
During the COVID-19 crisis, the authority proved pragmatic. It oversaw the rollout of the country’s Green Pass system. In Italy, proof of COVID-19 vaccination was required for close to a year to enter almost all public places, with compliance monitored through the digital Green Pass that takes the form of a QR code. Italy also required all citizens over the age of 50 to get vaccinated or face fines, with the Garante monitoring data sharing between government agencies.
Digital Tax: Italy was quietly an early supporter of digital taxation. In December 2019, Parliament approved a digital services tax that was worded almost identically to an EU proposal that had stalled in late 2018. The 3% tax applied to gross revenue of online advertising, online sales, and data processing for companies with global annual revenue of at least €750 million, of which at least €5.5 million must come from digital services in Italy.
The tax originally required separate implementation legislation, which the Italian government held off on issuing while it waited to see if Europe or the Organisation for Economic Co-operation and Development (OECD) would reach an international agreement. But faced with serious budget shortfalls and a spending battle brewing with Brussels, in December 2020, Parliament went ahead and approved a new tax that took effect directly in 2021, without additional legislation. Under a sunset provision, the tax will automatically be repealed if an international tax agreement enters into force.
Gig Economy: Although food delivery app use was virtually nonexistent in Italy prior to the COVID-19 crisis, Italians have since embraced deliveries — and Italy became an unexpected champion for gig economy workers. In February 2021, the Milan prosecutor’s office fined four food delivery services a combined €733 million ($830 million) for violating Italian labor law by classifying their 60,000 delivery riders as independent contractors. Soon after, Just Eat agreed to hire its 4,000 riders as regular employees with a minimum wage, benefits, travel reimbursements, and safety equipment. In December, the remaining food delivery services — Uber Eats, Glovo, and Deliveroo — reached a deal to improve worker conditions, though the prosecutor did not say if the agreement included hiring the workers as employees.
Antitrust: Italy’s antitrust authority has emerged as one of the most aggressive in Europe when it comes to cracking down on international tech companies. In December, the Autorità Garante della Concorrenza e del Mercato fined Amazon €1.13 billion ($1.28 billion) for privileging sellers who use the company’s logistics services. Not long before, the Italian regulators leveled a series of multimillion-euro fines last year against Apple, Google, and Facebook. The fine came as the European Commission was investigating Amazon for similar practices in other countries.
Whether Italy succeeds in implementing its digital agenda will be a question of timing and red tape. Parliamentary elections will be held in summer 2023. That means Draghi, the prime minister, could have just 16 more months left in office. Italy is famous for political gridlock and theatrics, but since taking over as prime minister in February 2021, “Super Mario,” as Draghi is popularly known, has been credited with bringing the necessary clout to cut through the noise and pass legislation in record time. But the clock is ticking, and the political infighting is as fierce as ever.