User:MartinRigoLLN/Digital Single Market

On 6 May  2015, the European Commission, led at the time by Jean-Claude Juncker, communicated the Digital Single Market Strategy which intend to remove virtual borders, boost digital connectivity, and make it easier for consumers to access cross-border online content.

The Digital Single Market,  which is one of the European Commission’s 10 political priorities,  aims to fit the EU’s single market for the digital age  – moving from 28 national digital markets to a single one and then to open up digital services to all citizens and strengthen business competitiveness in the digital economy. In other words,  the Digital Single Market is a market characterized by ensuring the free movement of people, services and capital and allowing individuals and businesses to seamlessly  access and engage in online activities irrespective of their nationality or place of residence. Fair competition conditions and a high level of protection of personal and consumer data are applied.

Building a data economy, boosting competitiveness through interoperability and standardisation, and creating an inclusive e-society can realise the growth potential of the digital economy. According to the Commission,  investment, the acknowledgement of  international dimension, and effective governance are required for the advancing of the Digital Single Market.

A fully operational Digital Single Market could bring a contribution of 415 billion euros per year to the economy and it would also create hundreds of thousands of new jobs.

The Digital Single Market Strategy includes a series of targeted actions based on 3 pillars. From these 3 pillars will come 16 key actions that constitute the Digital Single Market Strategy.

The Three Pillars

These are the three pillars that are the basis of the Digital Single Market strategy

The Digital Single Market refers to the European Commission's strategy 2014-1019 for the best possible access to the online world for citizens and businesses.

The Commission has based its strategy for the implementation of the DSM on three pillars.

The first pillar is the access. It concerns the implementation of better access for consumers (individuals and businesses) to the digital world across Europe.The aim of this first strategy is to succeed in reducing the differences between the Member States. Firstly, there is the difference in contract law. The problem is that this prevents the smooth flow of trade in the single market. Secondly, the parcel delivery service poses some problems within Europe. Especially with regard to affordability and high quality. Thirdly, there is a problem with the discrimination of consumers "accessing content or purchasing goods and services online on the basis of their nationality, residence or geographical location within the EU". Fourthly, there are bureaucratic obstacles faced by businesses such as value added taxes.

The second is the environment. This pillar aims to create a level playing field for the digital network but also for all environments that are developing. This pillar is made to make access to networks and services more reliable, more trustworthy, and at prices that are affordable. This is why a telecommunications sector is essential for Europe. It is important for this pillar that citizens and businesses can trust that 'networks are secure and that their fundamental rights to privacy are preserved'. Another important point for this pillar is that the market must be transformed to become simpler and more sustainable. It must also be able to ensure "a level playing field between traditional telecommunications companies and new internet players when operating in the same markets".Finally, the market must be able to adapt to the developments that surround it, such as the growing importance of the "sharing economy".

The third pillar is the economy and the society. This last pillar aims to ensure that the growth of the digital economy can reach its maximum potential. So maximizing this economy. For the latter pillar, it will aim to "maximise the benefits of digital technologies across all economic sectors in Europe, from primary to manufacturing, services and knowledge-based sectors». For the objectives of the latter pillar to work, it is essential that the first and second pillars are in place. In addition, it is important that access to data and capital are in place in order to have growth that is sustainable and inclusive.

Role of the European Parliament (EP)

The Parliament has played a key role in the restarting of the internal market, and is an ardent advocate and agenda setter for the DSM. Before the launch of the Digital Single Market Strategy (DSMS) in May 2015, the Parliament had already been adopting resolutions on the Digital Single Market. For example, on the 20th of April 2012, took a resolution on a competitive digital single market and e-government. The Parliament also adopted a resolution in July 2013 to complete the Digital Single Market.

In January 2016, to respond to the DSM Strategy proposal, the European Parliament adopted a resolution named “Towards a Digital Single Market Act”. The goals of this proposal were notably to ask the European Commission to suppress the geo-blocking practices, to enhance the access to goods and services for the European consumers and also to establish an equivalent consumer protection (equivalent if the goods are being bought offline or online).

Over the years, the EP have been building the DSM via thorough legislative enterprise. The legislation covers a wide range of digital concerns, from the elimination of roaming charges and the prohibition of unjustified geo-blocking operations to the adoption of a directive on actions to “reduce the cost of deploying high-speed electronic communications networks” or a directive on “copyright and related rights in the Digital Single Market”.

According to the EP, the legislative achievements of the institution in the DSM area are supplying 177 billion euro every year to economic growth in the European Union. The areas where the principal incomes are from are the European electronic communications and services area with 86.1 billion euro, data flows and artificial intelligence area with 51.6 billion euro and the single digital gateway area with 20 billion euro.

Objectives and Funding

Objectives

The aim of the Digital Single Market is to modernize regulations and make them more homogeneous on subjects such as consumer protection, copyright, and online sales. The European Commission specifies and says that five objectives are noted:

1. Boost e-commerce in the EU by tackling geo-blocking and making cross-border parcel delivery more affordable and efficient.
2. Modernize European copyright rules to adapt them to the digital age.
3. Update EU audiovisual regulations and work with platforms to create a fairer environment for all, promote European films, protect children, and better fight against hate speech.
4. Strengthen Europe's response capacities to cyber-attacks by strengthening ENISA, the EU agency responsible for cybersecurity, and create an effective European cyber deterrence while providing a criminal response in this area, to better protect businesses, public institutions, and European citizens.
5. Help businesses of all sizes, researchers, citizens, and public authorities to make the most of new technologies by ensuring that everyone has the necessary digital skills and by funding European research activities in the fields of health and high-performance computing.

Funding

To help this, the European Commission will use the full range of instruments and funding possibilities available. However, the full support of Member States, the European Parliament, the Council, and stakeholders is essential.

For the benefits of the digital revolution to be within everyone's reach, Europe needs a regulatory framework applicable to electronic communications that promotes the deployment of infrastructures capable of functioning seamlessly throughout the EU, including in rural areas, while preserving effective competition. Much of the necessary investment will come from the private sector, based on an improved regulatory environment.

The digital single market demands high-quality infrastructure. The EU is already mobilizing investments of around 50 billion EUR from the public and private sectors for the digital transformation of industry. It has also released 21.4 billion EUR from the European Structural and Investment Funds (ESI Funds) which will be available for the digital sector once national and regional strategies are put in place for digital growth, which will strengthen the link between policies and funding targets at all levels.

However, more investment needs to be made in digital technology, especially in areas where digital needs are far greater than the capacities of any of the Member States acting in isolation. Efficiency can be gained by combining and complementing EU funding programs with other sources of public and private funding, notably through the European Fund for Strategic Investments (EFSI). In April 2017, investments in the digital sector associated with the EFSI represented around 17.8 billion EUR, including public and private funding, (i.e., 10% of the total amount of investments mobilized at that date). However, current funding instruments have limitations when applied to large mission-oriented initiatives. Therefore, the Commission will explore ways to put in place a framework to support the development of a pan-European high-performance computing and data infrastructure. Combining different EU funding sources with national and private funding would be the best way to stimulate investment.

Main achievements

The following measures have reached to remove or reduce some of the main impediments to cross-border trade :

Prohibiting unjustified geographical blockade

The Geo-blocking regulation adopted by the EU in February 2018 prohibits any attempt to restrict consumers access to goods and services on e-commerce websites on the basis of their nationality or country of residence and establishment. The customers will be entitled to order the product and services irrespective of their place of connection and without having to pay additional fees.

End of Roaming charges

The elimination of retail roaming charges effective June 2017 is a second achievement of the Digital Single Market strategy. It means that mobile users periodically travelling in the EU are able to call, text and access the Internet on their domestic tariff.

Innovate Cross-Border parcel delivery

Cross-border parcel delivery is another part of the Commission’s strategy on achieving a Digital Single Market. Its regulation which aims to improve price transparency and to facilitate the assessment of certain high cross-border tariffs, entered into force on 22 May 2018.

On the one hand, it implies increased documentation. General conditions of sale of the affected parcel delivery companies and a detailed description of their complaints procedure have to be submitted to the national regulator.

On the other hand, it is about improved price transparency. Indeed, each individual national regulator has to publish the public list of tariffs and the terminal rates applicable to items originating from other Member States on a dedicated website and keep them updated. If parcel delivery companies don't comply with the regulation, it will be up to individual Member States to enforce penalties.

Providing portability of online content services

From 1st April 2018, consumers will be able to access  digital services such as an on-line distribution service for films and TV series that they have already paid for when travelling in a different Member State, without restriction and at no cost.

The simplification of VAT declaration

The aim is to avoid having to deal with a number of different national tax systems and then VAT rules are simplified in order to incentivize cross-border trade, combat VAT fraud (especially by non-EU actors), ensure fair competition for EU businesses, and provide equal treatment for online publications.

Revision of the consumer protection cooperation regulation

Addressing unlawful practices and identifying rogue traders are national enforcements authorities' means to protect consumers. Thereby, in order to detect the identity of the responsible trader, information can be requested from domain registrars and banks. Moreover, they can check geographical discrimination or after-sales conditions by carrying out mystery shopping and then can order the immediate take-down of websites hosting scams.

Specific policies of the DSM (Digital Service and Digital Market Act)

According to the European Commission the Digital Service Act and Digital Market Act have two main goals. First is to create a safer digital space in which the fundamental rights of all users of digital services are protected. The second is to establish a level playing field to foster innovation, growth, and competitiveness, both in the European Single Market and globally..

The Digital Services Act (DSA) includes rules for online intermediary services, which millions of Europeans use every day. The obligations of different online players match their role, size and impact in the online ecosystem.

The Digital Markets Act (DMA) establishes a set of narrowly defined objective criteria for qualifying a large online platform as a so-called “gatekeeper”. This allows the DMA to remain well targeted to the problem that it aims to tackle as regards large, systemic online platforms.

These criteria will be met if a company:

• has a strong economic position, significant impact on the internal market and is active in multiple EU countries
• has a strong intermediation position, meaning that it links a large user base to a large number of businesses
• has (or is about to have) an entrenched and durable position in the market, meaning that it is stable over time.

A few large platforms increasingly act as gateways or gatekeepers between business users and end users and enjoy an entrenched and durable position, often as a result of the creation of conglomerate ecosystems around their core platform services, which reinforces existing entry barriers.

The new rules will establish obligations for gatekeepers, “do’s” and “don’ts” they must comply with in their daily operations. For instance, the gatekeepers are supposed to allow third parties to inter-operate with the gatekeeper`s own services in certain specific situations, allow their business users to access the data that they generate in their use of the gatekeeper`s platform, provide companies advertising on their platform with the tools and information necessary for advertisers and publishers to carry out their own independent verification of their advertisements hosted by the gatekeeper, allow their business users to promote their offer and conclude contracts with their customers outside the gatekeeper`s platform.. The gatekeepers are not permitted to treat services and products offered by the gatekeeper itself more favourably than similar services or products offered by third parties on the gatekeeper`s platform, to prevent consumers from linking up to businesses outside their platforms, to prevent users from uninstalling any pre-installed software or app if they wish so..

The details of the new obligations for gatekeepers are to be be found in the wikipedia page of Digital Markets Act.

International dimension

In 4 july 2013, the European Parliament adopted a new resolution concerning the achievement of the digital single market with the willingness notably to develop mobility services and international dimension of this market.

However, in 2015, the international dimension of the digital single market was not well defined in the strategy of the Commission concerning the digital single market. The part of international dimension on the digital single market was short, and only contained the willingness of the EU to encourage its trading partners to expand their markets and deploy a sustainable approach concerning internet governance.  Moreover, current trade negotiations led at the World Trade Organization and in other negotiations channels were not mentioned. But during this same year the EU was the first exporter of digital services in the world. The goal of the EU was to be a more attractive location for global companies. The new Trade and Investment Strategy presented in autumn 2015 showed an ambition to develop digital trade and investment policy.  

In 2018, the US dominated the field of digital technologies with its big firms as Facebook, which led the competitiveness for the EU in this field weak. One of the reasons was that the european measures concerning technological products innovations in the EU were unfavorable for the growth and competitiveness of EU digital technologies. The consequence of this issue is that american digital firms as Facebook can take those innovative ideas issued from the EU, export them in the US territory and make them their own.

In 2020, the EU demonstrated its willingness to play a key role on international dimensions, including its digital policy orientation towards societal interests, prosperity and competitiveness,  through the tool of diplomacy, the use of a power of regulation and the financial instruments.  

Next step for the Digital Single Market

Deregulation

Future steps taken on building the DSM should be more dynamic and should focus on deregulation rather than simple regulation in order to address issues where there is no sufficient focus on and to keep up with the speed of the digital transformation. Furthermore, there is also too much insecurity about how companies can actually adhere to DSM current rules.

For instance, the roaming ban is a positive step toward the digital single market but the different ways by which Telecom companies are trying to poach revenue do not correspond with the bottom-up idea of market-driven integration. Similarly, the parcel delivery legislation was positive but the problems related to transparency on costs are not truly tackled.

Another example is regarding geo-blocking. Indeed, although "unjustified geo-blocking" is prohibited, small businesses are forced to commit to sell to a larger market while abiding costs this may incur depending on the destination country in question.

Finally, there is a one-stop shop for VAT registration, which is a good step, but a variety of VAT rates across member states still remains which restrict trade.

Conceptual Problems

In work to create a Digital Single Market, there are especially three conceptual problems. First, several reforms which have focused much on digital-specific regulations  have added new layers of regulatory complication to data-based commerce in Europe. Second, many of the regulations on data give confusion rather than given clarity and adding more opportunities for experimentation and innovation. Third, the EU's various regulations can have clashes between them. there is therefore a lack of coordination hence the necessity of a clearer taxonomy of the specific ambitions of one regulation.

Therefore, in order to create a better and larger space for the digital economy to grow, the efforts of the Europeans institutions and Member-State governments have to be redoubled in the next few years.