Europe unveils its digital market plans with US tech firms in the cross-sights

The European Commission has published a 16 point plan to support its Single Digital Market ambitions,ranging from an overhaul of Europe's telecommunications rules to harmonising copyright and tax regimes.

The plans also call for a series of major inquiries into possible abuses by US-based internet companies. These focus on the transparency of search results and pricing policies, how online platforms use the data they acquire, their relationships with other businesses and how they promote their own services to the disadvantage of competitors.

There will also be a competition inquiry into e-commerce, which is separate from the analysis of online platforms.

Another potentially controversial proposal revolves around ending geo-blocking – where companies deny access to their website based on a user's location - which has serious implications for the likes of Netflix, as well as indiginous UK firms, most notably the BBC with its iPlayer on demand offerings.

US President Barack Obama has already warned the EU against protectionist behavior when he told re/code:

Sometimes the European response here is more commercially driven than anything else. Oftentimes what is portrayed as high-minded positions on issues sometimes is just designed to carve out some of their commercial interests.

But European Commissioner for the Digital Economy and Society Günther H. Oettinger insists:

Our economies and societies are going digital. Future prosperity will depend largely on how well we master this transition. Europe has strengths to build on, but also homework to do, in particular to make sure its industries adapt, and its citizens make full use of the potential of new digital services and goods. We have to prepare for a modern society and will table proposals balancing the interests of consumers and industry.

This, mind you, from a man who earlier this year exposed the underlying agenda which many suspect to be heavily anti-US tech:

In the digital revolution that Europe does not want to lose. We want to prevail. We have got to act and react, but not be on the losing side.

That was followed up by this bizzare comment:

In the past, the IT-sector was like a small football field  with only six players – at the time the Americans had lost, European companies were at the forefront of innovation. But now, in a lot of areas the US are ahead of everybody else, they decide what the standards are.  If we move now away from the smaller "mini" football tournaments to the genuine "World Cup" we have teams of eleven, you have lots of different representatives of industry, arts and crafts, various sectors of society, they come back onto the playing field or they stay on the side lines. This is a different game. Europe is able to win this game.

Er, OK. (If you haven't already read it, check out Phil Wainewright's assessment of Commissioner Oettinger here.)

The proposals in full

There are 16 key actions under 3 pillars which the Commission says it will deliver by the end of 2016. (It won't!)

Pillar I: Better access for consumers and businesses to digital goods and services across Europe

• Introducing rules to make cross-border e-commerce easier, including harmonised EU rules on contracts and consumer protection when you buy online, whether physical goods or digital content like e-books or apps.
• Enforcing consumer rules more rapidly and consistently,by reviewing the Regulation on Consumer Protection Cooperation.
• More efficient and affordable parcel delivery, justified by research that shows 62% of companies trying to sell online say that too-high parcel delivery costs are a barrier.
• An end to "unjustified" geo-blocking.
• Identifying potential competition concerns affecting European e-commerce markets.
• Modern, “more European” copyright law to reduce the differences between national copyright regimes and allow for wider online access to works across the EU.
• Reviewing the Satellite and Cable Directive to assess if its scope needs to be enlarged to broadcasters' online transmissions and to explore how to boost cross-border access to broadcasters' services in Europe.
• Reducing the administrative burden businesses face from different VAT regimes with a common VAT threshold to help smaller start-ups selling online.

Pillar II: Creating the right conditions and a level playing field for digital networks and innovative services to flourish

• An overhaul of EU telecoms rules, including more effective spectrum coordination and common EU-wide criteria for spectrum assignment at national level.
• Reviewing the audiovisual media framework to “make it fit for the 21st century”.
• Analyzing the role of online platforms.
• Reinforcing trust and security in digital services, notably concerning the handling of personal data, by building on the new EU data protection rules and reviewing the e-Privacy Directive.
• A partnership with industry on cybersecurity in the area of technologies and solutions for online network security.

Pillar III: Maximising the growth potential of the digital economy

• A 'European free flow of data initiative' to promote the free movement of data in the European Union and further work on a European Cloud initiative covering certification of cloud services, the switching of cloud service providers and a "research cloud".
• Define priorities for standards and interoperability in areas critical to the Digital Single Market, such as e-health, transport planning or energy (smart metering).
• Supporting an inclusive digital society where citizens have the right skills to seize the opportunities of the Internet and boost their chances of getting a job, along with a new e-government action plan to connect business registers across Europe and ensure different national systems can work with each other.

Reaction

Reaction from the US tech trade groups has inevitably channeled concern. James Waterworth of The Computer & Communications Industry Association, said:

There are several measures that threaten to undermine the stated goal of the digital single market to grow Europe's economy, replacing it with a re-regulation agenda. Existing measures to respond to problems online strike a balance between freedom of speech, commercial freedom and controlling infringing material. Extending a 'duty of care' could severely affect these freedoms.

The UK’s own trade group techUK reminded the Commission that the best way to grow jobs is to make the rules simpler. Antony Walker, techUK’s Deputy CEO said:

We have to guard against new barriers being erected: Europe should be driving the development of global standards not regional ones; it should be creating a regulatory framework for the future, not reinforcing regulation designed for the past; and it needs to ensure that new proposals for legislation are based on a clear understanding of the facts, not assumptions about how the digital economy works or attempts to rein-in Europe’s competitors.

Europe works best when it makes life simpler and clearer for consumers and businesses. Core concepts such as the Country of Origin principle mean that small innovative European businesses know that if their products and practices are compliant in one country they are compliant everywhere. This gives them the confidence to invest and scale across Europe and enables simple one stop shop solutions to regulatory compliance. Europe must not back away from these essential harmonising concepts that support growth.

My take

A cursory search of the term ‘European Commission’ on this site will quickly reveal my scepticism about the ambitions and abilities of that body, particularly in terms of what I read to be ‘tech envy’ of the US.

As a Brit, I’m all for supporting the growth of a digital economy in Europe, but am all too conscious of the propensity for the self-interest and protectionist impulses of key member states to result in the ‘common market’ states fighting like a bag of cats.

There are things in these 16 proposals that appeal, but equally some that meddle in areas best left to commerical forces. For example, yes, it would be great to be able to access the same Netflix programs across Europe. But that’s something that’s best left to the US company to sort out in terms of European licensing, not something to be enforced by Brussels eurocrats.

At the end of the day though, this latest digital agenda will likely go the same away as previous bids. Political declarations will stall when the rubber hits the road. For example, let’s agree that lower parcel delivery costs is a good idea. Now, let’s pause to consider what can practically be done to bring that about that without enormous centralist state meddling?

There are clear sops here to the data protection impulses of the Germans and the commercial protectionist predilections of the French, but there’s no indication in this strategy of how to win a consensus across the 28 states.

As for the 'end of 2016' party line, on previous form, it would take 3 years to get these proposals into a state where only the Brits and the Irish are opposing them, and a further two (at least) to get them turned into law.

By which time, the digital economy will have moved on so quickly that many of them will probably be irrelevant anyway.