The digital single market: What happened?

Written by Daniel Dalton on 12 March 2018 in Opinion
Opinion

In trying to fulfil its digital single market aspiration, the Commission may have made things worse for online entrepreneurs and consumers alike, writes Daniel Dalton.

Daniel Dalton | Photo credit: European Parliament audiovisual


The Commission’s digital single market plan started with a great deal of promise and broad political backing. Politicians from across the spectrum supported the vision of creating a true digital internal market in Europe, without barriers and borders, enabling European start-ups to emulate the success of their US counterparts and scale up much more easily than the current fragmented marketplace allows.

Unfortunately, somewhere along the way that positive vision was lost in the web of legislation. The ideal of a Europe open for digital business, indeed leading the way, has descended into a cherry-picking approach of choosing sides in various sectoral disputes. 

Time and again, on copyright, on digital contracts, and ePrivacy, the Commission has gone into bat for established market players at the expense of consumers, innovation and start-ups.


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Frequently it has tried to put the digital genie back into the bottle and revert to an analogue era. All too often, it has also attempted to fight an imaginary culture war, between small European companies (good) and big American companies (bad). 

Ironically, the approach it has taken on legislation such as copyright and ePrivacy, placing high barriers to market entry with a raft of expensive requirements on content monitoring and data handling, will favour larger organisations over smaller ones. The real losers will be European start-ups.

Only where the Commission has attempted to put consumers first has it succeeded - at least partially - in achieving some of the original vision of the digital single market. 

I supported both the portability and the geo-blocking regulations, and although I would like to have seen both be more ambitious, they represent a step in the right direction. Both started from the same perspective, that technology and consumer wishes had outpaced existing legislation, and that the law needed to be adapted to accommodate those driving forces rather than seek to reverse or militate them.

These are two isolated examples of success. The broader picture is bleak, and with only 15 months of this Parliament left and little more than 18 months for the Commission, it is difficult to see significant positive change being achieved in that time. In its mid-term review last May, the Commission itself acknowledged that time was of the essence. 

However, all is not lost. Negotiations on copyright legislation are still ongoing and there remains a possibility we can achieve a sensible agreement that does not prevent the sharing of news online or restrict freedom of speech by forcing platforms and websites to take down legal content. 

The free flow of non-personal data proposal which is also beginning to make its way through the Parliament offers a positive opportunity to help data flow more freely across borders and to encourage the development of a more advanced market in cloud and data storage provision. Yet even in this area, the final legislation could fail to meet expectations if member states succeed in their attempts to carve out unnecessary localisation exceptions.

Online platforms represent the next big challenge. The Commission has signalled its intent to introduce legislation to regulate platforms differently and specifically. The risk here again is that the Commission views platforms as simply US conglomerates and fails to recognise the diversity of proliferating platform models across Europe.

If it refuses to acknowledge that not every platform has the same resources as a Google or a Facebook, it risks ensuring they are the only platforms able to survive in a hostile European digital eco-system. 

Platforms first and foremost empower consumers to pick and choose and vet businesses; however, they also provide a space for micro-businesses and start-ups to grow their business and reach buyers simply and cheaply. This open forum has already proved hugely beneficial to the European economy and to European entrepreneurs. eCommerce is one of our fastest growing industries.

Platforms will also continue to evolve in ways we cannot imagine today, so any regulation in this area - if indeed it is even feasible to regulate all platforms - needs to be proportionate and future-proofed.

These two principles would have served the Commission well in its entire digital single market strategy. However, despite the rhetoric and good intentions of three years ago, there is now a genuine risk that the digital single market will be more hostile to digital growth, entrepreneurs and consumers than the framework that existed before this process began.

 

About the author

Daniel Dalton (UK) is Parliament’s ECR group shadow rapporteur on online platforms and the digital single market

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