On 06/05/2015, the European Commission publicly announced its Strategy on the implementation of the Digital Single Market, which should become a reality by the end of 2016.
The initiative includes significant changes in the European legislation in key fields such as personal data protection, consumer protection and some practical activities as the widespread digital technology introduction and the creation of a society with digital knowledge and skills.
The idea about Digital Single Market is a clear indication of how important and current are nowadays the Internet and the digital technologyes in everyday life and business. The need to introduce such platform which uses the capacity of the Internet will stimulate the business within the European Union by making more affordable the cross-border transactions. Not only - it will stimulate the entire free movement of people, goods, services and capital. And last but not least – as a result could be opened thousands of new job opportunities.
Statistics show that the potential of Europe as union of 28 national markets with over 500 million consumers exceeds even the US market and that after the Digital Single Market creation will be reported profits amounting to € 415 billion per year.
Today only 15% of the European citizens make online purchases from another country and only 7% of SMEs make cross-border transactions. The ambition of the Commission is to maximize these rates. In this sense are the words of the European Commission President Jean-Claude Juncker: "Today, we lay the groundwork for Europe’s digital future. I want to see pan-continental telecoms networks, digital services that cross borders and a wave of innovative European start-ups. I want to see every consumer getting the best deals and every business accessing the widest market – wherever they are in Europe."
What exactly provides the Strategy?
For the DSM introduction the European Commission sets out 16 key actions, under 3 pillars.
The 3 pillars are:
I. Better access for consumers and businesses to digital goods and services across Europe.
II. Creating the right conditions and a level playing field for digital networks and innovative services to flourish.
III. Maximizing the growth potential of the digital economy.
BETTER ACCESS FOR CONSUMERS AND BUSINESSES TO DIGITAL GOODS AND SERVICES ACROSS EUROPE
Better access for the consumers will be guaranteed after:
1. harmonization of the contract and consumer protection rules in cross-border e-commerce which will cover the purchase of both - tangible goods and digital ones (e-Books, apps and so on). Facilitating the exercise of the right of return goods and reclamation, ensuring solid and effective rights when buying goods and services from another Member State will encourage consumers to buy and subsequently the business that will increase the online offering across Europe. The need to guarantee the consumer confidence is important because today only 38% of European citizens feel safe to order online from another country;
2. main problematic factor for online shopping now are the value and the supply conditions regarding the cross-border orders. Statistics show that the international delivery prices of parcels exceeds several times the price for the delivery of the same product in national territory. According to the EC to overcome this obstacle is needed a competitive dialogue and a fair distribution of the economic burden between retailers, suppliers and consumers with price transparency. That is why the European Commission launched a public discussion involving all interested parties;
3. modernization of the European copyright law which date back to 2001 by the end of 2015 for maximum harmonization of the national copyright regimes and in order to adapt them to the modern technology and practical use. The new rules will ensure the free access to legally acquired works for personal use from every point in Europe and at the same time will increase the protection and the prosecution in case of violations. Facilitating licensing of distribution rights for audiovisual works, which are currently limited by territory, will overcome the so-called geo-blocking effect and will ensure the consumer access to them from all Europe. The EC will seek a balance between the creative sector and intermediaries that lead to certain distribution strategies, guaranteeing free circulation of lawfully acquired contents.
Moreover, the copyright law changes will impact favorably in many sectors such as education, research, etc .;
4. implementation of rules for the introduction of common VAT threshold set in 2016. They aim to overcome the administrative burden of different VAT regimes. Another incentive for businesses is the fixing of single electronic registration and payment which will allow the development of small and medium-sized enterprises and they will be exempted from the burden of adapting to the tax laws of each country in which they want to offer their services;
5. legislative changes to increase the efficiency of the Regulation on Consumer Protection Cooperation which will reduce costs and will create consumer confidence in violation prosecution within Europe;
6. cancellation of the unjustified geo-blocking - a discriminatory practice used for commercial purposes. These are cases when online sellers deny the consumers access to a website based on their location or when through a referral link redirect them to local shop with different prices. This phenomenon is typical only for the virtual world because in traditional trade relations nationality is never an obstacle for participation in turnover and on other hand this practice is contradictory to the principle of free competition. EC plans the necessary legislative changes in order to minimize these restrictions except in cases when they are not discriminatory – for example to protect public interests;
7. identifying potential competition concerns affecting European e-commerce markets;
8. reviewing of the Satellite and Cable Directive in order to boost cross-border access to broadcasters' services in Europe.
CREATING THE RIGHT CONDITIONS AND LEVEL PLAYING FIELD FOR DIGITAL NETWORKS AND INNOVATIVE SERVICES TO FLOURISH
To ensure these conditions, the Commission provides:
9. to implement significant changes of the European standards in the telecommunications sector, to achieve more effective coordination of radio spectrum, to stimulate investment in high-speed broadband in order to guarantee to consumers competitive service with high quality and affordable prices. The EC wants to guarantee a level playing field for all market participants and the creation of an effective institutional framework. It is also necessary to improve more effective spectrum coordination between the Member States;
10. to review the audiovisual media framework to make it fit for the 21st century, focusing on the roles of the different market players in the promotion of European works (TV broadcasters, on-demand audiovisual service providers, etc.). It will as well look at how to adapt existing rules (the Audiovisual Media Services Directive) to new business models for content distribution;
11. to review the role and the influence of online platforms (search engines, social media, app stores, sites for comparing prices, etc.) as an important factor among providers and the final consumer in order to overcome the lack of transparency of the search results, the pricing policies and the results manipulation. Especially prominent is the need for rapid and effective actions against the illegal content on the Internet. Currently, online platforms are not responsible for illegal content, which is placed in them, but at the request of the interested party they shall immediately remove those contents. Often this is a slow process or there are some obstacles which affect the interests of the shareholders. On the other hand, often legal contents are unjustifiably removed from distribution. The elimination of these problems makes part of the EC Strategy;
12. till the end of 2015 the Commission will review the Directive on the protection of personal data on the Internet, because the personal data security when using online services is one of the basic requirements for the establishment of e- Society;
13. to create public-private partnership with the industry and to develop investment programs in order to stimulate innovative ideas and concrete measures which will guarantee the online network security.
MAXIMIZING THE GROWTH POTENTIAL OF THE DIGITAL ECONOMY
EC plans to develop:
14. "European free flow of data initiative". Shortly, this initiative aims to overcome unjustified restrictions on access to services based solely on location or to data access outside the hypotheses of personal data protection. Some of the changes include also an European cloud initiative covering the certification of cloud services, switching cloud services providers and "research cloud";
15 priorities for standards and interoperability in areas critical to the DSM, such as e-health, transport planning or energy (smart metering), which will lead to cost reduction, quick service and unified standards.
16. global digital society, in which citizens have the necessary skills to take advantage of the Internet opportunities and to increase their chances of finding work. Statistics expect opening of 825,000 new jobs by 2020.
After the expiry at the end of 2015 year of the actual e-government Action plan, in 2016 the Strategy provides the further development of e-governments which will connect business registers across Europe, ensuring different national systems can work with each other, and ensuring that businesses and citizens only have to communicate their data once to public administrations ("only once principle"and they will be available for all institutions within the EU. Electronic procurement and interoperable electronic signatures will accelerate the administration work. With this scope is provided also the „Single Digital Gateway” principle which would link up relevant EU and national-level content and services in a seamless, user-friendly and user-centric way, for the benefit of both people and businesses.
How the EU countries different technological development influences the introduction of the DSM?
The Internet and the digital technologies give countless possibilities for the modern society and business (online learning, paying bills, online banking, trading and making e-invoices, the cloud services usage). How these possibilities are used in 28 European members is getting clear from the recent conclusion of the European Commission from February this year, based on the Digital Economy and Index Society. It shows that there are still big differences between the EU members in the implementation of the technology in every field of activity, in the Internet services quality and in the ability and the actual use of the Internet opportunities. These differences are a kind of obstacle for the introduction of the Digital Single Market which the EC seeks to remedy through its Strategy.
Here you can see the scheme provided by the Commission:
Some of the conclusions of the Commission are:
- the European citizens use the Internet regularly and tend to increase their access to audio-visual content online;
- SMEs need incentives and more liberal rules to start an e-commerce. Now only 15% of them are in the electronic market and it is mainly at national level;
- taking advantage of online administrative services in some countries is 0%. The e-government development will lead to a significant change in this regard for the benefit of the European citizens.
From these considerations it is clear that Europe is moving increasingly towards digitization, that the European citizens expand the Internet use not only for their personal life but also for administrative purposes and that the European Commission's strategy from 06.05.2015 will make possible the creating of a Digital Single Market by developing and improving the current potential.
We expect positive changes in the next report of the Digital Index during the summer of 2015.
But mainly we expect the results of discussion regarding the DSM which is on the European Council agenda on 25 - 26 June.
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