Unfinished EU Digital Single Market Vision Shifting
Plans for a pan-EU digital single market (DSM) are unlikely to be finalized during the current term of the European Commission and Parliament, and when completed may not have the desired effect, stakeholders told us. While the EU institutions have agreed to 23 of the 30 measures proposed for creating the DSM, several contentious issues remain to be resolved. The EC added additional initiatives outside the DSM that, combined with moves by the European Parliament to push DSM initiatives more toward consumer protection, could change the direction, said Inline Policy consultant Shomik Panda, who focuses on platform regulation and policy.
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The EC launched the DSM in May 2015, setting out 16 initiatives in three areas: Better access for consumers and businesses to digital goods and services; creating the right conditions and a level playing field for digital networks and innovative services; and maximizing digital economy growth potential. Among the proposals were overhaul of telecom and copyright rules and an analysis of the role of online platforms. Added later were measures requiring online platforms monitor for terrorist content and a plan to tackle online disinformation. The latest EC road map for completing the DSM was tweeted by Digital Society and Economy Commissioner Andrus Ansip Dec. 31. Plans for copyright reform and e-privacy rules are still being discussed.
One of the original intents of the DSM was to break down cross-border business barriers, but five years (the EC term) is a long time and the political climate has changed, Panda said. The EC supplemented the DSM with initiatives that would put burdens on platforms that weren't originally envisioned, he said. In disinformation and online platforms rules, the EC created a monitor, he noted. This expert working panel has the potential to become a "weighty group" whose impact will start to bear fruit during the incoming EC, he said.
Most of the platform-related initiatives are still "relatively balanced" and won't curtail growth of the EU platform economy, Panda said. He predicted more heavy-handed regulation, akin to that in the financial sector, is likely. He blogged that the European Parliament could jeopardize the original DSM goals further in coming months by imposing more burdens on companies. "It is looking increasingly unlikely therefore that a legislative programme which ultimately delivers on the original goals" of the DSM project will be agreed to during the current parliament, he wrote.
A key piece of the DSM that is completed, the European Electronic Communications Code (EECC), took effect Dec. 20. it continues to draw criticism.
"We might think that the EECC does not represent material progress toward a single market for electronic communications," emailed European Competitive Telecommunications Association Director General Luc Hindryckx. He said spectrum harmonization is very limited; and the broadband network access regime is too complex and could lead to differing results among and within EU countries. Creating a true DSM should involve a focus on the general data protection regulation and e-privacy, which have a harmonizing effect, and on what major over-the-top players do on a commercial basis, because their offers are intrinsically global, he said.
The EECC is a "very timid" proposal in regulatory terms, said Center for European Policy Studies Senior Research Fellow Andrea Renda. CEPS members include Google and Microsoft. Broadband rollout has been pushed in the EU via regulation and the setting of targets such as the digital agenda of 2010, he said. When considering regulation in the fixed-line arena, Europe had to choose between opening markets to new entrants seeking to use incumbents' infrastructure or telling telcos they didn't have to share their infrastructure if they invested heavily in new technologies, he said: The EU chose the first option, which created many players but generated little investment.
There may be a window of opportunity in the next few years, said Renda. The U.S. has had a large advantage in telecom policy because it has long had an established cable infrastructure, but that's showing its age and it's unclear what comes next, he said. In Europe, it may be possible to scale up existing technologies using fixed wireless access, but this will need a "shift of gears," and "who will have that courage?"