EU Plans To Set Up Harmonised Digital Single Market For Online Services
Plans for a European single digital market have been unveiled by the European Commission during a press conference which will cover everything from ecommerce to broadband including parcel delivery rates, plus uniform telecoms and copyright rules.
Resistance is expected in a number of countries out of the 28 currently in the EU. The online strategy aims to create a ‘level playing field’ for internet shoppers and firms, European Commission Vice president Andrus Ansip has said. Under the strategy, digital services will be boosted across the EU as none of the current internet provider market leaders in the EU is European.
While the proposals will take years to implement, they put forward the idea that companies and individuals should be able to buy and sell across borders as though they are at home. Currently there are variable VAT rates, price rigging, service blocking and high delivery costs, while customers say that they must give away too much personal information when shopping in a different country.
Ansip and Gunther Oettinger, the Commissioner for Digital Services, agree that the governments of individual countries will try to slow down the strategy as EU leaders frequently agree on policies but they are sabotaged by bureaucracies and politicians.
The commission hopes to convert its strategy into legislative initiatives before the end of the year. There will be problems across each of the proposals- development of 4G and 5G is slow in Europe because governments guard their prerogatives for spectrum allocation and so areas such as broadband infrastructure investment and national spectrum allocation will be difficult to make waves in. According to Ansip, there will need to be cooperation in the field of spectrum in order for a digital single market to become a possibility.
Ansip says that a harmonised digital market would increase European GDP by €415bn ($465) as the aim is to tear down regulatory walls and “move from 28 national markets to a single one”. At the moment, 7% of small and medium businesses sell in other countries, while just 25% of EU online shoppers purchase from other countries.
There have been plans unveiled by another part of the commission that is responsible for policing the single digital market to launch inquiries into abuse and malpractice in ecommerce. Oettinger believes that the EU needs to gain digital independence and digital sovereignty, a phrase which has been taken to be aimed at the US as Oettinger is known for pushing the views of German online publishing lobbies who wish to take back control from companies such as Google.
A document leaked in April which was seen by the Wall Street Journal and prepared for Oettinger warned of the threat to the EU from large internet firms such as Facebook, Etsy, Google and Amazon. It warns of how these firms have strong power over their market sector and that the economy will depend almost entirely on just a few companies in the future. If they were to exploit their market power, the European economy would be at risk as other sectors will rely heavily on them. The document suggests that unfair practices such as giving their own services preferential treatment should be banned via a supervision framework. There should also be easy ways to switch between service holders so that users are not tied down to one company. Closed platforms and platform holders are already damaging companies in the EU according to the document: 42% of global consumer app revenue is down to EU app developers, however EU app economy trade balance is negative due to fees that are paid to US platform owners by EU developers.
The new plans come after news that the European Commission has investigated several companies including Amazon and Facebook. Amazon’s tax affairs were investigated last year after claims that deals in Luxembourg were unfair. In addition, Facebook and other companies have been criticised and investigated for the way they deal with the personal data of EU citizens and there is an ongoing antitrust investigation launched by the European Commission against Google.
It seems that the EU is intent on protecting its citizens and small companies by preventing large corporations and firms from pushing out the competition. This should be good news for the citizens of 28 European countries which it presides over, but only time will tell whether the proposals go ahead as expected.