When Jean-Claude Juncker was elected President of the European Commission on 1st November 2014, his agenda focused on ten priority policy areas, one of which was the creation of a Digital Single Market.
315 million EU members use the internet daily, and 360 million each week. The Digital Single Market could save €110 billion a year, create hundreds of thousands of jobs, and generate up to €415 billion in additional growth, depending on some estimates.
What are the obstacles?
Today, 42% of the digital market is made up of 28 national online services, whilst 54% come from US-based online services and just 4% from EU cross-border online services. A Digital Single Market requires the EU to disable barriers related to infrastructure, broadband accessibility, copyright and data protection through improving the use of online services and digital technologies.
The strategy and agenda agreed on 6th May 2015 is built on three pillars, with 16 associated tasks and a deadline of December 2016.
Pillar 1 – Better online access to digital goods and services
- Making cross border eCommerce effortless through harmonising consumer and contract laws.
- More efficient and affordable cross-border parcel delivery for consumers and retailers.
- Ending geo-blocking or restricting access to online services or internet content based upon a buyer’s geographic location; for example, car rental customers in different Member States paying more or less for an identical car rental in the same destination.
- Creation of a modern EU copyright law to allow for wider online access to cultural content, whilst creating new opportunities for the content industry particularly ensuring that users who buy films, music or articles in their home country can also enjoy them whilst travelling in the EU. Additionally, increasing enforcement of commercial-scale infringements of intellectual property rights.
- Simplifying VAT rules through creating a single electronic registration and payment system including a common threshold across the EU.
- Launching an antitrust competition inquiry into e-commerce.
- Review of the Satellite and Cable Directive.
Pillar 2 – Creating an environment where digital networks and services can flourish
- Overhaul of EU telecoms rules and harmonisation of telecom markets including spectrum coordination and common criteria for spectrum assignment at national level and incentives for rolling out high-speed broadband.
- Revamp of the audio visual media framework to ensure it meets current and future needs for content distribution.
- Comprehensive review of all online platforms, including transparency of search results and pricing policies, how data is used, data portability across platforms and how to tackle illegal online content.
- Strengthen trust in online services especially concerning personal data through new data protection rules and a review of the e-Privacy Directive.
- Partnering with industry on cybersecurity, especially solutions for online network security.
Pillar 3: Maximising the growth potential of the EU digital economy
- Sponsor an EU free flow of data initiative to promote free movement of data across the EU including the launch of an EU Cloud initiative covering certification, switching of cloud service providers and a “research cloud” to encourage innovation.
- Development of ICT standards and interoperability between systems such as health, transport, planning and energy.
- Support an inclusive digital society by ensuring EU citizens have appropriate digital skills, boosting employability.
- Creation of an e-government plan to connect business registers across the EU, ensuring different national systems work together so that businesses and citizens input their data “once only” to public administrations.
The deadline of December 2016 is rapidly approaching, and after a slow start to the year, both May and June so far have seen a flurry of press releases announcing new rules and codes of conduct.
What grabbed the headlines?
Well, let’s start with the ratification of the General Data Protection Regulation (GDPR) in April. This is compulsory from April 2018, with businesses facing mammoth fines for breach.
Four announcements in particular provoked quite a reaction:
- An EU ‘voluntary’ code of conduct agreed with Facebook, Twitter, Microsoft and YouTube to combat illegal online hate speech. The companies have pledged to review all reports of abuse within 24 hours.
- The European Data Protection Supervisor published his opinion on the EU-U.S. Privacy Shield, calling for significant improvements as it was “not robust enough to withstand future legal scrutiny”. This agreement is designed to protect personal data belonging to EU citizens stored in the US and replaces the Safe Harbour pact which was ruled legally invalid.
- New e-commerce legislative rules proposed to address unjustified geo-blocking and other forms of discrimination on the grounds of nationality or residence, transparency of prices and improved regulatory oversight over cross-border parcel delivery services, and strengthened enforcement of consumers’ rights and clarification around what qualifies as an unfair commercial practice in the digital world.
- An updated Audiovisual Media Service Directive mandating, among many things, that content companies such as Netflix and iTunes dedicate 21% of their catalogues to European content; inclusion of online streaming services and video-sharing platforms to the rules; traditional broadcasters given the go-ahead to show more adverts during primetime, removing the obligation for them to cap adverts at 20% each hour, effectively allowing them to show 20 minutes of ads per hour! Additionally, requiring content that could be harmful to children, such as pornography or glorified violence, to be properly tagged, and rules banning hate speech extended to video sharing platforms and downloadable content.
And what’s passed us by?
- An EU agenda for a collaborative economy announced to provide guidance on how existing EU law should be applied to the industry.
- Modernised EU standardisation policy with five priority areas identified: 5G, IoT, cloud computing, cybersecurity and data technologies.
- Common cybersecurity rules formally adopted. The legal act will now go for its second reading in the European Parliament. If approved, the rules will be enforced in August 2016.
- Agreement to make public sector websites and apps more accessible.
- Digitising European industry with the European Cloud Initiative announced together with a €500 million investment in a pan-EU network of digital innovation hubs.
What’s not gone down well?
Any code of conduct on online hate speech being voluntary and subject to terms of service only rather than actual law. It should be made law and not left to private companies to decide what is or is not illegal! Dutch MEP Marietje Schaake said: “The commission is trying to reconcile water with fire. There can be no room for privatised law enforcement in the EU.”
The message to parcel delivery companies to bring prices down or face future regulation or as one lobbyist said “introducing price regulation through the back door”. Whether or not consumers actually want to buy goods or services from another member state has been questioned. But, this one personally I’m 110% behind, as I’m sure any other Etsy or Brika fans are too!
Eliminating geo-blocking for e-commerce, but letting copyrighted audiovisual content off the hook! So, basically despite paying a TV licence for the BBC, I still can’t use it outside of the UK! “An anti-geo-blocking regulation that does not cover online video content misses the point,” says Julia Reda, a member of the European Parliament’s Green group.
Like many others, I’m not at all keen on a third of every hour being handed over to ad breaks; the general view is that the more ads viewers are exposed to, the less effective each one is, making each ad less valuable to advertisers.
The double-edged sword of EU governance has struck. Some of these sound great, some sound dubious to me as a consumer, some could widely disrupt established digital businesses and their earning power, and dare I say, some are kowtowing to others.