As much of what the EU aims to do is rooted in values like free expression, privacy, transparency and the rights of individuals, these values must be actively protected as the new rules are written, he said.
"But as the web fragments, Europe faces a fundamental choice: does it design rules to keep the internet open and global; or does it build barriers for the bloc alone?" Clegg, who is a former Deputy Prime Minister of the United Kingdom, wrote in the open letter first published in the Financial Times this week.
He warned that far from putting Europe at the cutting edge, a shift towards digital protectionism could accelerate the splintering of the Internet, leaving Europe a bystander as US and Chinese companies dominate.
"European policymakers need to maximise the bloc's advantages -- top quality talent, a large consumer market, first-class universities -- and address its deficiencies -- the lack of deep and liquid capital markets, and a patchy commitment to entrepreneurialism and innovation," Clegg said.
"Sovereignty versus competitiveness is a false choice. The EU can have both, and remove internal barriers without creating new ones for businesses seeking to reach the vast majority of the world's online population beyond EU borders."