European Parliament Reaches Provisional Agreement on Framework for Digital ID

Latvian President Egils Levits delivers a speech as part of a plenary session at the European Parliament in Strasbourg, France, on Feb. 14, 2023. Frederick Florin/AFP via Getty Images

The European Parliament and the Council of the EU reached a provisional agreement on Nov. 8 regarding the introduction of a new framework for a European digital identity (eID).

Often referred to as the EU Digital Identity Wallet (EUDI), the tool aims to ensure that all EU citizens, residents, and businesses have access to “secure and trustworthy electronic identification and authentication” in the near future, according to officials.

Under the EUDI, member states will “offer” EU citizens “digital wallets” that will be linked to their national digital identities along with other proof of identification, such as their driving licenses and their bank accounts.

They'll also store official documents, such as the individual’s educational history, medical prescriptions, and qualifications.

Citizens will then use the EUDIs to prove their identity, access public and private online services, open bank accounts, make payments, and share electronic documents via their mobile phones, removing the need to “provide private identification methods” or “unnecessarily share personal data.”

According to the European Parliament, the tool will provide “full security and protection of personal data all over Europe.”

Under the Nov. 8 provisional agreement, the European Parliament and the council decided that the digital wallet will be “free to use for natural persons by default,” but member states can also put in place various measures to “ensure that the free-of-charge use is limited to non-professional purposes.”

They also agreed on the “business model” of the wallet, on the code that the wallets will use, and that “consistency between the wallet as an eID means and the underpinning scheme under which it is issued has been ensured.”

According to officials, the identification tools will use open-source software components, but EU nations providing them will also be “granted necessary leeway” for various “justified reasons,” in which case, “specific components other than those installed on user devices may not be disclosed.”

European Commission Vice President for A Europe Fit for the Digital Age Margrethe Vestager gives a press conference with the EU commissioner for internal market on establishing a European digital identity framework at the European Commission, in Brussels on June 3, 2021. Stephanie Lecocq/Pool/AFP via Getty Images

‘Unique, Secure European Digital Identity’

Officials also established that member states will provide validation mechanisms to “verify the authenticity and validity of the wallet and of the relying parties’ identity” free of charge.

The provisional agreement clarifies the “scope of the qualified web authentication certificates (QWACs), which ensures that users can verify who is behind a website while preserving the current well-established industry security rules and standards.”

“With the approval of the European digital identity regulation, we are taking a fundamental step so that citizens can have a unique and secure European digital identity,” Nadia Calviño, acting Spanish first vice president and minister for economy and digitalization, said in a statement.

“This is a key advance for the European Union to be a global reference in the digital field, protecting our democratic rights and values.”

Officials will now work on accompanying legal text for the provisional agreement, which will be submitted to member states’ representatives for endorsement.

Following a legal review, the provisional agreement will need to be formally adopted by the Parliament and the council before it can be published in the EU Official Journal and go into effect.

Member states will then have to provide EU Digital Identity Wallets to their citizens within 24 months.

The European Commission launched four large-scale pilot programs of the digital identity wallet in April, focusing on a mobile driving license, eHealth, digital payments, and education and professional qualifications, investing a total of 46 million euros ($49 million) in the pilot schemes. More than 250 private companies and public authorities across 25 member states and Norway, Iceland, and Ukraine are taking part in the pilot.

Under the new program, large-scale platforms such as Amazon and Facebook will also be legally required to accept the digital ID wallet.

A surveillance camera is placed on a car outside of the Manhattan Criminal Courthouse in New York on April 3, 2023. Kena Betancur/Getty Images

Concerns Over Privacy, Freedom

While officials have touted the various pros of the digital ID wallet, stated that users will be able to opt out of sharing personal data, and claimed that it won’t be used for “illegal tracking, tracing, or government interception,” experts have raised concerns.

In an open letter signed by civil society organizations, academics, and research institutions in June, experts warned that the EU ID Wallet had the potential to “create an unprecedented risk for every European in their online and offline life.”

“The current trilogue negotiations have distinguished poorly between legitimate use cases and fraudulent or abusive scenarios,” they wrote.

“Privacy-respecting functions are not given preference over intrusive functions of the Wallet.”

The experts said legal know-your-customer requirements of banks and insurance companies are “put on an equal level as the surveillance-driven business models of Big Tech.”

“In its current form, the European Digital Identity System would be a gift for Google and Facebook to undermine the privacy of EU citizens. This will impact everyone in the EU and put them at a lower privacy level than people in other world regions,” they said.

Rob Roos, a Dutch politician and current independent member of the European Parliament, called the latest agreement “very bad news.”

In a statement on X, formerly known as Twitter, Mr. Roos raised concerns regarding a connection between the digital ID wallet and central bank digital currencies, which experts believe present “significant risks“ for the financial system and consumer privacy, and claimed that privacy experts and security specialists had been ”ignored” during talks over the latest provisional agreement.

“They’re pushing it all through. I am not optimistic. But it is not too late yet. Parliament still has to vote about this. Let your MEP [member of the European Parliament] know that you oppose the Digital Identity and that you want your MEP to vote against it,” he wrote.

The latest development is bad news for the “privacy and freedom” of Europeans, Mr. Roos said.