Andrus Ansip: EU digital single market could generate €415bn a year

Andrus Ansip talks 5G race, the potential of the data economy and why he believes his copyright proposals will help both consumers and creators.

Andrus Ansip | Photo credit: Natalie Hill

By Julie Levy-Abegnoli

07 Feb 2017

The current European Commission has promised to go big on the big things, and certainly one of its biggest endeavours has been the establishment of a digital single market (DSM). This has resulted in wide-ranging policy proposals which, like most things in politics, have fuelled intense debate and the occasional controversy. 

For Andrus Ansip, the Commission Vice-President in charge of the dossier, "Conflicting national regulations and regulatory practices around the EU have held up the creation of a fully functioning DSM. 

"Europe's economy needs to overcome this fragmentation in online markets to make the most of the opportunities offered by new emerging technologies, along with the chance to generate economic growth and employment."


The successful establishment of a DSM could, claims the Estonian, "generate €415bn a year."

A crucial step is "creating the right conditions for digital networks and services to thrive, so that dynamic start-ups can scale up fast and go global without wasting their time and money complying with 28 different regulatory set-ups."

Europe must also, says Ansip, "tackle unjustified restrictions to the free movement of data across borders as well as several legal uncertainties. Today, the EU lacks a DSM for data - and that means Europe is missing out on economic, social and business opportunities."

Different rules in the 28 member states mean ensuring the free movement of data is tricky, but Ansip says the Commission has "identified barriers" and is working to break them down. 

"They may arise from legal rules, administrative guidelines or practices that require the storage or processing of data to be limited to a particular geographical area or jurisdiction."

The most problematic practice is referred to as 'data localisation', when governments, in an attempt to protect privacy and security, require that data be handled within their borders.

Ansip explains that data localisation "is often based on the misconception that localised services are de facto safer than cross-border services. This is likely to inhibit data-driven businesses, particularly start-ups and SMEs, from scaling up their activities or entering new markets. And it makes it harder for businesses and public sector organisations to access cheaper or more innovative data services."

As such, the Commission has promised to put an end to harmful data localisation practices and “make sure that Europe's fundamental freedoms of movement of services and establishment - enshrined in EU primary and secondary law - are also respected when it comes to data services."

The executive "will soon start discussions with the member states and other parties concerned about the proportionality of data localisation measures and whether they are justified, for both personal and non-personal data. 

"Based on these discussions and further evidence gathered through public consultations, the Commission will open infringement proceedings - where needed and appropriate - to address unjustified or disproportionate data location measures. If necessary, we will also take further initiatives on the free flow of data."

If Europe manages to make the most of the data economy's potential, the payoff could be huge. "In 2015, the EU data economy was estimated to be worth €272bn, with an annual growth rate of 5.6 per cent. By 2020, it could employ 7.4 million people. 

"Data can be used to improve almost every aspect of daily life, from business analysis to weather forecasting, from new methods in medicine to enable personalised care, to safer roads and fewer traffic jams."

Europe is often seen as lagging behind in terms of tech companies - global leaders such as Google, Facebook or Netflix all originated from the US - but Ansip refutes this, pointing out that, "Europe already has several successful online companies including Skype, Spotify, Skyscanner, and BlaBlaCar."

Europe's current problem, explains the Commissioner, is that, "To be successful, online platforms must win the race to reach new customers and have the ability to grow quickly to profitability and a viable scale. Differing local regulations make this challenge more difficult. So we need to reduce regulatory fragmentation in the EU, which will make it easier to scale up."

But not all is lost, and European companies do have the advantage in certain sectors. "Recent reports suggest that European start-ups are taking leading roles in promising areas like artificial intelligence, robotics, virtual reality and chip design: collectively referred to as 'deep tech'. 

"We want to build on these strengths and help create new strategic centres for engineering and development for next-generation products and services."

Most of us tend to use online services while on-the-go, on our mobiles rather than on a computer. However, high-speed mobile internet is not yet a reality for all of Europe, and the EU is falling behind in the 5G race, compared to the US and South Korea.

Ansip admits that "investment in broadband mobile networks has not been as swift in Europe as in the US, for example. But the situation of Europe is improving rapidly: about 86 per cent of the EU population is now covered by at least one Long-Term Evolution (LTE) network."

One of the main differences, he explains, is that Europe was quick to invest massively in 3G networks in the early 2000s, and operators were forced to delay reinvesting in 4G, in order to first recoup the initial 3G investments.

Nevertheless, according to Ansip, "analysis suggests that investments in 4G broadband mobile are catching up and the percentage of 4G subscriptions in Europe will be similar to that of other major regions by around 2020."

And on a hopeful note, he adds, "While 5G has become a race, Europe does not need to be left behind. There are pre-commercial initiatives in the US and in Korea which mainly target very high rate access - that is, super broadband access in very high frequency ranges such as the 28 GHz band which can provide very large bandwidth capabilities. 

"On this type of application, I note that our European supply industry is well placed, with a high number of contributions submitted to standardisation bodies."

The Commission has presented its own 5G action plan, which includes "measures to ensure the availability of the appropriate spectrum and standards in all member states, to promote investments in infrastructures and early deployment of commercial services, to foster the new innovation ecosystems, and to promote pan-

European multi-stakeholder trials as catalysts to turn technological innovation into full business solutions."

Ansip believes that "a coordinated European approach would be more successful than the patchy situation that prevailed for 4G. 

"This means putting common conditions in place to support our ambitious objectives: for at least one city per member state to be '5G enabled' in 2020, and for all Europe's major transport paths to have 5G connectivity by 2025.

"Spectrum is a key requirement for this and we are glad that Europe is now part of the leading nations to have identified 5G pioneer bands to start 5G trials as early as 2018."

Perhaps the most contentious element of the digital single market strategy is the modernisation of EU copyright rules - in place since 2001. Most of Ansip's proposals have come under fire from policymakers and industry alike, but he defends his positions. 

"We proposed a balanced set of legal measures to make sure consumers as well as creators can make the most of the digital world. Students will gain from a richer and more attractive learning experience, for example, thanks to the wider use of digital content in the classroom and online courses. 

"Our proposals will help create a thriving and pluralistic creative sector and press, investing in quality and diverse content - and there will be greater availability of EU audiovisual works on video-on-demand platforms."

Policymakers and industry alike have raised concerns that Ansip's proposed rules - including a 'Google tax' that would allow news publishers to charge search engines for citing their news stories in search results. 

But the Estonian, who was his country's longest-serving Prime Minister, insists that, "Artists and creators will be in a better position to decide how their content is used and to negotiate payment with online platforms. 

"Authors and performers will enjoy greater transparency regarding the exploitation of their works and performances. 

"Our copyright proposals will align differing national rules and help our creative industries to thrive in the DSM. They will help European authors to reach new audiences and make European works widely accessible to all Europeans."

Whether MEPs - and artists - will see it that way is another story.


Read the most recent articles written by Julie Levy-Abegnoli - MEPs vote against beginning negotiations on updating EU copyright laws