Günther Oettinger (European Commissioner for Digital Economy & Society)
On 6 May the European Commission introduced the latest strategy on its intention of achieving a Digital Single Market. This project, following the failure of the two previous projects, aims to align European legislations regarding E-commerce in order to achieve free movement of goods and services on digital world.
The aim is creating a Digital Single Market that would allow both companies and customers make the most of the potential of the economic area comprising twenty eight countries and five hundred million inhabitants without technology, physical, law or tax limitations, in order to encourage the establishment and development of innovating companies and the competition between the latter and the companies that currently control the business and cultural environment in Europe (US companies control operating systems: Microsoft, Google, Amazon, Apple, Uber, etc.). Of the thirty two world’s major digital platforms, only Spotify is a European company and from a country outside the Eurozone.
This measure aims to raise consumers’ trust, since, according to European Commission data, only 38% of Europeans trust Internet when buying goods or services from other country. The European Parliament estimates that achieving a full Digital Single Market will promote the European economics with 360 billion Euro per year. The main strategic proposals involve:
● Enabling distribution. To eliminate limitations and lower the price on distribution, in order to lower products final price for the consumer
● Eliminate digital frontiers in order that customers have not limited access to online stores in any Member State
● Electronic competition. E-commerce industry would be investigated in order to look for alleged anti-competitive behaviour or misuse of powers. Establishing and regulating the relationship between digital platforms and their providers are the main objectives, in order to control whether promoting their contents place their competitors at a disadvantage.
● Telecoms. Laws review with the intent of, among others, improving standards as interoperability, digital innovation or speed. It is also aimed to apply rules regarding telecoms to digital platforms (Facebook, Twitter, Skype), operating with obligations less strict than the ones of the traditional phone operators. In our opinion, as experts in Telecoms law, matters as Roaming (the European Parliament proposed its elimination in 2016, however the States in the Council decided to keep it until 2018 due to lobbies) and the Net neutrality are a priority when developing digital economics.
● European copyright through issuance of copyright license. It has a double aim: greater and better access to all contents of the EU for the consumers (currently differences of copyright or intellectual property regulations from one country to another prevent in some cases downloading digital goods – music, films, apps) and fighting against piracy.
● Unified VAT is one of the most sensitive areas, due to differences across the European Union. The aim is achieving its alignment for the digital commerce. It is also proposed simplifying the management of this tax reducing administrative formalities, thus small and medium enterprises would apply the rate of tax of their country and avoid operating with different rates in each market.
● Data exchange would be strengthened in a digital community territory. It is intended to guarantee respect for privacy with more online cybersecurity. Among the proposals it is included the possibility of launching a European cloud, i.e. an EU digital area through which users may access contents.
● Greater digitalization. Beyond E-commerce it is aimed to introduce other key economy industries in the digital world, particularly Health, Energy or Transport.
Our opinion, as lawyers with expertise in Digital Law and Digital Markets, is that the European Commission’s initiative should be favourably viewed (matters as modification of legal framework regulating copyright, facilitating the management of trans-European VAT, alignment of regulations protecting the consumers, improvement of E-commerce access are all measures which undoubtedly involve a significant progress), however the road will be full of obstacles, among others, the many interests from culture, economic, labour perspectives as well as lobbies (as it happened with the intent to align telecoms industry) and it must be also added Brussels bureaucracy and the subsequent national implementation, because a consensus of the European Council at the end of June will be necessary, its subsequent transfer to the Parliament, its new endorsement by the Council and finally such measures regulation by the Member States in order to foster the potential of the intended digital single market.
From IT & Communications Department at Belzuz Abogados, we can foresee that next months will be significant when checking whether such reforms achieve development and consolidation or, on the contrary, are dissolved once again. To this end, Member States should “battle” with circumstantial matters as language (not every webpage is in understandable for everyone), the mistrust that still exists when buying online, too many requested data for operations, with structural problems as solving the problem of twenty eight different VATs, claims and international shipping costs or geographical blocking (there are countries, areas or service providers that prevent the access to certain contents depending on the origin of customer’s IP). In short, the needed laws wouldn’t be achieved before 2017 and, meanwhile, Digital Single Market Strategy for Europe is still an empty illusion.
Belzuz Abogados SLP
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