Brexit Day – Digital Single Market dilemmas as Article 50 is triggered

SUMMARY:

It’s the day that’s been on the cards since the 23rd June vote – Article 50 is triggered and Brexit negotiations can finally begin. The future of the Digital Single Market is one of the items on the agenda.

brexitAs the UK triggers Article 50 and begins the formal negotiations to leave the European Union, the European Scrutiny Committee has warned of a lack of clarity about which of the Digital Single Market (DSM) initiatives can be fulfiled through domestic legislation post-Brexit.

There are 12 individual initiatives under the wider DSM agenda: geoblocking, portability, roaming, free flow of data, audio-visual media services, an electronic communications code, copyright directive, modernised VAT for cross-border e-commerce, consumer protection, tangible gods, cross-border parcel delivery and a digital content directive.

The Commitee notes:

Post-exit, achieving such policy objectives would appear to require some form of bilateral agreement, such as a comprehensive Free Trade Agreement. On the other hand, proposals that do not contain a reciprocal dimension might be achievable through UK law in the absence of any bi-lateral agreement.

Of course, the DSM has been publicly idenitifed by European Commission President Juncker as his second highest political priority. This has raised concerns that the Commission may use key DSM elements, most notably around non-personal data, as a back door way to force UK-based digital businesses to relocate at least part of their operations to the EU. Juncker has shown no hestitation to date in issuing dire warnings to the UK about the consequences of the Brexit vote.

With that in mind, the Committee requested information from the Government about its intentions with regard to the DSM.  Asked how the Government would continue to approach negotiations on the DSM, the official response states:

The UK continues to play an active role in the DSM, influencing negotiations and voting in Council to ensure that the UK’s views are heard. Through developing strong and constructive relationships with like-minded Member States, we have achieved successes on the DSM, both in terms of policy content and the speed at which some key policies have progressed through the EU’s legislative process—for example, the recent agreements on geoblocking and portability represent a near record turnaround in EU decision-making. We aim to maintain this momentum and influence across other DSM files, working with our Member State partners and the EU institutions.

The Ministerial reply emphasised that the UK continues to see participation in the DSM negotiations as a priority in the run-up to Brexit:

Whatever the nature of our relationship with the EU, it is in the UK’s economic interests to work with international partners on building a fully functioning global digital economy. For this reason, we continue to push for an open, competitive and flexible Digital Single Market. For example, the free flow of data is fundamental to the functioning of the digital economy and realising its full potential. The Government sees global data flows as being of high importance, hence the desire to tackle unjustified data localisation not just at the EU level, but also in data flows between the EU and third countries.

But the government was not willing to go into more detail about the UK’s likely negotiating position, arguing:

Our EU exit negotiations are yet to begin. It is therefore premature to comment publicly on the nature of future agreements with the EU or on potential changes to domestic law following our EU exit.

After today, that’s a position that’s going to be increasingly harder to hide behind.

The Committee has set down its own timetable for more information, requesting a response from the Minister by 9 May:

We request that the Government provide the Committee with a case-by-case assessment of the extent to which, post-exit, the policy objectives of each of the different Digital Single Market proposals could be achieved solely through domestic legislation or would require some form of bilateral agreement with the EU.

We accept the Government’s reluctance to provide information “about the nature of future agreements with the EU or on potential changes to domestic law following our EU exit”, but believe that it is appropriate for Parliament to seek clarification of which digital economy issues can be tackled domestically and which will require a bilateral agreement.

My take

Article 50 is triggered today and after what has been a kind of ‘phoney war’, the tough talking can finally get underway. That means that we’re going to see more and more interested parties and stakeholders, as well as political michief-makers, demanding more and more information on how negotiations are proceeding.

The question posed by the Committee as to how many DSM elements can be achieved domestically and how many will need a bi-lateral agreement is a sensible one. Whether it can be answered by 9 May is another matter. (I’ll stick my neck out and say let’s not hold our breath on that!).

But the Government’s commitment to continued participation in the wider DSM negoations is to be welcomed and it’s to be hoped that this stands the test of the threats and counter-threats that I fear are going to chartacterise the next 18 months.

Image credit - Free for commercial use