The Digital Single Market strategy

DG Connect talks Digital Single Market strategy

Roberto Viola, DG for DG CONNECT, discusses the impact of the Digital Single Market strategy, the data economy, and the practices of online platforms.

In May 2015, the European Commission put forward its Digital Single Market strategy. It aims to maximise the positive impact of the digital revolution on people’s daily lives, European businesses, and to alleviate frictions in online trade and other exchanges that are otherwise inherently borderless. The strategy outlines 16 key actions, covering areas such as:

  • Copyright law;
  • Telecoms rules;
  • E-commerce;
  • Audio-visual media;
  • Online platforms;
  • Free-flow of data;
  • Digital skills; and
  • Cybersecurity.

What impact has the Digital Single Market strategy had?

Two years after launching the digital single market strategy, the Commission took stock of what had been achieved in a mid-term review:

  • 44 initiatives have been put forward, including legislative initiatives on key parts of the strategy, such as spectrum coordination and the end of roaming;
  • Citizens will soon benefit from portability of content;
  • Online sales will be eased by simpler VAT rules for start-ups and SMEs; and
  • The end of unjustified geo-blocking.

The mid-term review also identified areas where further action is necessary, e.g. cybersecurity. Securing network and information systems is essential for the digital transformation of our societies and to maintain trust in the online economy. The number, complexity, and scale of cyber-attacks, and their impact on society and the economy, is growing over time and is expected to increase in parallel with technological change. In September 2017, the Commission therefore proposed a package of proposals on cybersecurity. The package builds on existing instruments and presents new measures to further improve EU cyber resilience and response.

It renews the mandate of the European Union Agency for Network and Information Security (ENISA), so that it can effectively contribute to addressing the future challenges in cybersecurity. The new role of ENISA will pay particular focus to the implementation of the Directive on Network and Information Security (NIS) – the first EU legislation in the area of cyber security. It will also actively support EU member states, institutions, businesses and individuals.

Secondly, a framework for the certification of information and communication technologies will help to ensure that products and services in Europe, and in particular Internet of Things (IoT) devices, meet the safety standards which will be checked, supervised and properly enforced.

There should also be a more coordinated response to major cyber incidents that affect several member states, as well as the inclusion of cybersecurity into existing crisis management mechanisms. In addition, a European network of expertise and research in the field of cyber security, the Cyber Security Research and Competence Centre, will strengthen the technological capacity of the EU in the field.

The proposed cybersecurity measures aim to contribute to the tackling of interrelated problems such as:

  • Fragmentation of policies and approaches to cybersecurity across member states;
  • Dispersed resources and approaches to cybersecurity of EU institutions, agencies and bodies; and
  • Insufficient awareness amongst citizens, and companies, of cyber threats.

The Commission has also highlighted the specific issues concerning liability raised by new digital technologies; work is under way to analyse the implications.

The data economy

Another area which is essential to the Digital Single Market strategy is the data economy. If data is able to move freely within the single market, this will help European businesses to grow, governments to modernise public services, and citizens to be empowered. The Commission has put forward a legislative proposal on the free flow of non-personal data, and in spring 2018 an initiative on accessibility and re-use of public and publicly funded data will be presented.

The digital revolution is, to a significant extent, based on data. The growing IoT will produce exponentially growing amounts of data. Data are non-rivalrous in character: it can be used and re-used by many parties at the same time without a loss in quantity or quality. From a policymaker’s perspective, there is thus an interest in maximising economic and societal welfare built on data. In other words, we should create a situation in which data can be re-used as often as possible.

What needs to be done to facilitate a data economy?

Firstly, data needs to be able to flow freely across borders. As individual European markets are relatively small, it must be possible for companies to bring together a critical mass of data. With the EU’s data protection framework for personal data, and with our proposal on the free flow of non-personal data, this issue has been addressed.

Secondly, more data needs to become available for re-use. For publicly held or publicly funded data, the case for making more data more re-usable is obvious. An initiative on the accessibility and re-usability of public and publicly funded data will therefore build on existing of open data and open access policies, as well as strengthening them.
However, relying on public and publicly-funded data alone may not be enough in order to compete globally on big data and artificial intelligence technologies. Access to data held by companies will be essential.

The critical question is thus how to organise data for this kind of access in a market economy. This will be about creating incentives and lowering transaction costs, not about forcing companies into data-sharing or data-trading. There needs to be a win-win situation. Ideas of data partnerships, partnerships between companies trying to solve business problems together on the basis of data-sharing, or of data collaboratives – settings in which technology enables collaboration around the same data with mutual benefits – should guide the future design of the data market.

Industrial data spaces, funded under the EU’s R&D Horizon 2020 Programme, are one example of data collaboratives. They provide for a secure environment in which multiple companies can collaborate on the basis of data exchanges, translating the efficiency promises of digitisation into a cross-company setting.

The role of online platforms

Another key question in the Digital Single Market strategy is how to deal with online platforms. Platforms are central to the digital economy and have produced many advantages by bringing consumers and traders together. We need to ensure that they continue to drive innovation and growth, whilst mitigating potential risks.

The Commission has a number of dialogues in place with various online platforms to combat illegal content online. These include:

  • The EU code of conduct on combatting hate speech online;
  • The EU Internet forum to fight terrorism; and
  • The dialogues dealing with counterfeit goods online, based on a memorandum of understanding between online platforms and the European Commission.

These dialogues have shown good progress recently. The code of conduct on hate speech has led to faster take-down of illegal hate speech reported to companies. Similarly, in the context of the EU Internet forum, more terror content has been identified and prevented from being uploaded on the Internet. More online platforms have recently joined these voluntary efforts.

To further accelerate progress, the Commission issued guidelines in September 2017 on how online platforms should speed up the fight against such illegal content, in terms of easy notification procedures, cooperation with so-called trusted flaggers, as well as with law-enforcement bodies. The Commission also recommended specific policies against over-removal of legal content, such as counter-notice procedures.

Furthering the Digital Single Market strategy

In parallel, the Commission continues to investigate trading practices in the e-Commerce space between online platforms and traders who use these platforms to reach their markets. Our goal is to ensure a more transparent, predictable, and fair trading environment in the online platform ecosystem. A specific proposal is scheduled for spring 2018 to address harmful trading practices in the online platform economy, and which complements the Commission’s role under anti-trust rules.

When our strategy was initiated, the value of a fully operational Digital Single Market was estimated at €415 billion. Since then, we have already seen some positive developments. For example, the value of the EU data economy has increased to approximately €300 billion in 2016, equalling a growth of 5.03% compared to 2015. However, the full value of the DSM can only be exploited, when all its elements will be fully implemented.

While we have had some success, some important proposals are still with EU decision-makers. The ones that remain on the table must now be swiftly agreed to meet the objectives set in the European Council’s call for full implementation by the end of 2018.

Roberto Viola
Director-General for Communication Networks, Content and Technology


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