The ongoing digital transformation creates some of the largest economic, political and social challenges for the European Union. Economic question about the competitiveness of Europe's start-up ecosystem and capabilities in new technologies like Artificial Intelligence are linked to political questions about the EU's place in the world amid the two digital superpowers, the US and China. At the same time, the digital transformation also forces the EU to reflect how it can protect and transfer its core values of humanism, the rule of law and the protection of civil liberties into the age of algorithmic decision-making and ubiquitous data generation and analysis. We at the Jacques Delors Centre approach the key policy challenges of the digital transformation from a distinctly European angle. On the one hand, we focus on economic challenges such as the digital Single Market and taxation of digital value creation. On the other hand, we analyse the political and societal dimension of the digital transformation as action against disinformation online and rules on the ethical use of algorithms.