By Leonardo Sforza, Managing Director, Brussels, MSLGROUP
The digital landscape is expanding its outreach across disciplines, industries, practices and borders.
It is accelerating changes in our everyday life from work to shopping, from social relation to political engagement, from administrative practices to leisure, from healthcare to organizational effectiveness. The potential for bolder and more impactful changes driven by the combined power of meaningful data mining with fast, accessible and reliable communication tools is even greater than what we have been experiencing in the last two decades.
The potential for bolder and more impactful changes
Meanwhile, the regulatory and public policy environment underpinning the digital revolution has been lacking the speed, the scope and the coherence necessary to make it trustful and inclusive across Europe and beyond.
This is a gap that the new European Commission in office, under president Juncker’s leadership, and widely supported in its principles by the EU Council of ministers and by the European Parliament, now has the ambition to overcome through the establishment of a true European Digital Single Market.
On May 6th, the Commission unveiled its strategy explaining how it will tackle the challenges and opportunities brought on by the digital revolution and spelled out the 16 priority actions planned for the next two years with specific focus on: cross-border e-commerce, digital networks and platforms, and “data economy.”
At the #Digital4EU Stakeholder Forum, European Commission Vice-President Ansip, clearly stated his ideals for building a digital space for Europe:
– no discrimination based on nationality or unjustified geo-blocking;
– single contract law for online transactions to provide clear and safe rules for buyers, sellers and producers of content and services
– a single datap rotection regime and a clear system for data access
– a copyright and licensing regime to benefit creators, publishers and consumers alike
– simple rules for small and online businesses, to allow them to start operating across the EU
– a pan-European market in telecoms, at affordable prices and no roaming fees
– high speed connectivity, also in rural areas as under 20% of them have access to high-speed broadband, against 62% in urban centers
– full portability of users’ data over platforms and systems across the EU, and full interoperability of public and private e-services.
The EU can count on three main work streams to translate the ideals into reality pushed by a renewed political commitment to deliver on businesses’ and citizens’ expectations. Political will is a crucial pre-condition, but EU action will have to be backed and informed by the engagement of the multiple stakeholders concerned if we want to overcome the current divide within Europe and with the main partners in the U.S.
- The first work stream is about updating and upgrading the existing old, patchy and unfit regulatory environment. This spans from the adoption of a pan-European regulatory framework for the telecommunication market to overcome the many different national supply and demand conditions in telecom, to the revision of the twenty years old data privacy rules that will continue to require a lot of work –also in the negotiations with US Administration- despite recent progress in the EU Council of Ministers.
- The second work stream is about legal enforcement and supervision of existing statutory requirements in compliance with the European Union treaty principles on antitrust, on free movement of goods, services and capital, and the attached Charter of fundamental rights of the European Union that includes the protection of personal data.
- The third work stream is about providing the appropriate incentives for public-private partnership, for attracting and leveraging more private investment. A number of EU projects are already being implemented and new one will be launched notably in the context of the new financial instruments under development.
On March 25, 2015, the European Commissioners had a first discussion on the strategy and set out the main areas on which the Commission will focus its work to trigger real changes for achieving a Connected Digital Single Market. At the closing of the meeting, the Vice-President for the Digital Single Market Andrus Ansip said:
“Let us do away with all those fences and walls that block us online. People must be able to freely go across borders online just as they do offline. Innovative businesses must be helped to grow across the EU, not remain locked into their home market.”
He was echoed by his fellow colleague Günther H. Oettinger, Commissioner for the Digital Economy and Society, who stressed that:
“Europe cannot be at the forefront of the digital revolution with a patchwork of 28 different rules for telecommunications services, copyright, IT security and data protection. We need a European market, which allows new business models to flourish, start-ups to grow and the industry to take advantage of the internet of things. And people have to invest too – in their IT-skills, be it in their job or their leisure time.”
Vision for the Digital Single Market
The Commission’s orientation debate has set out three main areas on which Commission action will focus during its five years mandate. These are about improving market access, digital networks environment, streamlining digital economy.
1. Facilitating access to digital goods and services
- Facilitating cross-border e-commerce, especially for SMEs, with harmonized consumer and contract rules and with more efficient and affordable parcel delivery. Today only 15% of consumers shop online from another EU country last year, for example, compared with 44% shopping nationally (see Factsheet for more figures).
- Tackling geo-blocking, considered as being discriminatory within the EU area and to ensure that Europeans will have the possibility to use online services that are available in other EU countries, and avoid re-routing to a local store with different prices.
- Modernizing copyright law to ensure the right balance between the interests of creators and those of users or consumers. It will improve people’s access to culture – and therefore support cultural diversity – while opening new opportunities for artists and content creators and ensuring a better enforcement of rights.
- Simplifying VAT arrangements is important to boost the cross-border activities of businesses, especially SMEs. The cost and complexity of having to deal with foreign tax rules are a major problem for SMEs. The VAT-related costs due to different requirements are estimated at EUR 80 billion.
- Shaping the environment for digital networks and services
- Review the current telecoms and media rules to encourage investment in infrastructure towards higher-speed internet and secure networks
- Improve coordination among Member States on spectrum and a European approach to its management to reduce the delays in the roll-out of the latest technology.
- Explore ways to strengthen trust in online services through more transparency, how to include them in the online value chain, and to facilitate the swift removal of illegal content.
- Swift adoption of the Data Protection Regulation seen as is key to boosting trust. Today, 72% of internet users in Europe are concerned about using online services because they worry that they have to reveal too much personal data online.
3. Leveraging the potential of European digital economy for growth
- Help all industrial sectors integrate new technologies and manage the transition to a smart industrial system (“Industry 4.0”).
- Encourage faster development of standards for ensuring the interoperability of new technology systems.
- Help leverage the potential of big data -seen as a “goldmine”- and cloud computing -projected to rise from 20% in 2013 to 40% in 2020- without ignoring the challenges of data ownership, data protection and broader access.
- Promote access to e-services, from e-government to e-health, and develop their digital skills to seize the opportunities of the internet and boost their employability.
Where we are today
The European Commission has now formalized its 2015-2017 action plan, for some parties watered down compared to the initial ambitions, but still focusing on those areas where the joint action at the EU level can make a difference.
The Commission’s determination to act more boldly in the context of antitrust investigation shouldn’t be underestimated from a business and consumer perspectives. The most recent examples of such determination is given by the specific on-going antitrust investigation targeting high profile market leaders and by the sector-wide inquiries into e-commerce launched by Margrethe Vestager, the EU Commissioner for Competition. The sector inquiry will focus particularly on potential barriers erected by companies to cross-border online trade in goods and services where e-commerce is most widespread such as electronics, clothing and shoes, as well as digital content.
Meanwhile stakeholders and interested parties are invited by the Commission to join the debate on “Digital4EU” and share their views and stories about their European digital experience and expectations.
Implications for Businesses
Businesses that are already engaged or soon-to-be engaged in data activities should do three things, now:
- Start assessing the implication of new policy orientations for your own business operations.
- Monitor forthcoming declarations and initiatives due to be taken by the European Commission and by other stakeholders to gain a thorough understanding of the depth, breath and timing of possible changes.
- Engage as early as possible in the consultation process by sharing with EU policy makers (in particular with relevant Members of the European Commission and of the European Parliament) your direct practical experience on the issues aimed to be tackled, together with your perspective on the likely impact of the proposed measures, or of desired alternatives.
This post is part of our People’s Insights report Data In. Data Out. Transforming Big Data into Smart Ideas.