The ubiquitous digital single market

The digital single market is one of the most promising and challenging areas of progress, creating potential efficiency gains of EUR 260 billion per year. It opens up new opportunities to boost the economy through e-commerce, while at the same time facilitating administrative and financial compliance for businesses and empowering customers through e-government. Market and government services developed within the digital single market are evolving from electronic to mobile platforms and becoming increasingly ubiquitous, offering access to information and content at anytime, anywhere and on any device. These advances call for a regulatory framework that is conducive to the development of cloud computing, borderless mobile data connectivity and simplified access to information and content, while safeguarding privacy, personal data, cybersecurity and net neutrality.

Legal basis

Articles 4(2)(a), 26, 27, 114 and 115 of the Treaty on the Functioning of the European Union (TFEU).

Objectives

The digital single market is essentially about removing national barriers to transactions that take place online. It builds on the concept of the common market, intended to eliminate trade barriers between Member States with the aim of increasing economic prosperity and contributing to ‘an ever closer union among the peoples of Europe’ and further developed into the concept of the internal market, defined as ‘an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured’. Following on from the Lisbon Strategy[1], the Europe 2020 strategy introduced the Digital Agenda for Europe[2] as one of seven flagship initiatives, recognising the key enabling role that the use of information and communication technologies (ICT) will have to play if the EU wants to succeed in its ambitions for 2020 (5.10.3).

The digital single market has the potential to improve access to information, to bring efficiency gains in terms of reduced transaction costs, dematerialised consumption and reduced environmental footprint, and to introduce improved business and administrative models[3]. More e-commerce generates tangible benefits for consumers, such as rapidly evolving new products, lower prices, more choice and better quality of goods and services, thanks to cross-border trade and easier comparison of offers[4]. More e-government facilitates online compliance and access to jobs and business opportunities for both citizens and businesses[5].

Recent mapping of the costs of non-Europe has indicated that while in the longer run the digital single market could contribute around EUR 520 billion to the GDP of the EU-28, around half of this benefit can be achieved in the coming years with the right blend of policies in place[6]. This makes the digital single market the most important EU policy area in terms of potential benefits. In specific policy areas, e.g. as a result of the adoption of cloud computing, 80% of organisations could reduce costs by 10% to 20%. Other benefits include enhanced mobile working (46%), productivity (41%) and standardisation (35%), as well as new business opportunities (33%) and new markets (32%)[7]. Vulnerable people (the elderly, those with reduced mobility, those isolated in rural areas, those with low purchasing power) can derive particular benefit from the digital single market, and the EU will thus be better placed to meet the demographic challenges of today[8].

Achievements

Relaunching the European economy through the digital single market: given that the full potential of the internal market remains unexploited, Parliament, the Council and the Commission have made fresh efforts to relaunch it and to put the public, consumers and small and medium-sized enterprises (SMEs) at the centre of the single-market policy[9]. The digital single market has a central role to play in these efforts.

In its communication entitled ‘Europe 2020 — A strategy for smart, sustainable and inclusive growth’ (COM(2010) 2020), the Commission presented seven flagship initiatives — including the Digital Agenda — intended to ‘turn Europe into a smart, sustainable and inclusive economy delivering high levels of employment, productivity and social cohesion’.

In addition to the Europe 2020 strategy, the Commission published a report in May 2010 entitled ‘A new strategy for the single market at the service of Europe’s economy and society’, with the aim of developing a comprehensive strategy for the single market which covered all the policies concerned, including digital policy. It also set out several initiatives aimed at shoring up the single market by removing barriers. These Commission communications, and Parliament’s resolution of 20 May 2010 on delivering a single market to consumers and citizens[10], prepared the ground for a communication entitled ‘Towards a Single Market Act’ (COM(2010) 0608) in which the Commission presented a series of measures designed to boost the EU economy and create jobs. Following on from its communication of 11 January 2012 entitled ‘A coherent framework for building trust in the Digital Single Market for e-commerce and online services’ (COM(2011) 0942), in June 2012 the Commission published a communication entitled ‘Better Governance for the Single Market’ (COM(2012) 0259). It proposed that the focus be placed on those sectors with the highest growth potential, including network industries (e.g. energy and telecommunications).

In September 2012 the Commission published a communication on ‘Unleashing the Potential of Cloud Computing in Europe’, proposing as key actions: (1) cutting through the jungle of standards, (2) guaranteeing safe and fair contract terms and conditions, and (3) establishing a European cloud partnership to drive innovation and growth from the public sector; it thereby sought to address issues such as fragmentation of the digital single market, complicated contractual environments, and issues (COM(2012) 0529).

In October 2012 the Commission came forward with a second set of proposals — the Single Market Act II (COM(2012) 0573) comprising 12 key actions focused on four main drivers for growth, employment and confidence: integrated networks, cross-border mobility of citizens and businesses, the digital economy, and actions that strengthen cohesion and consumer benefits. With respect to the digital economy, as a move towards the completion of the digital single market by 2015 the Commission is proposing to promote e-commerce in the EU by making payment services easier to use, more trustworthy and more competitive; there is also a need to address the key causes of the lack of investment in high-speed broadband connections, to make electronic invoicing standard in public procurement procedures and to highlight the importance of consumer confidence. The Commission stated its intention to come forward with all of the key legislative proposals connected with the Single Market Act II by spring 2013, and with non-legislative proposals by the end of 2013. Numerous legislative proposals, including abolishing roaming charges in Europe and improving cybersecurity, are currently being debated by Parliament as a matter of priority, while the Commission is taking stock of the Europe 2020 strategy as part of its mid-term review[11].

Role of the European Parliament

Parliament has played a leading role in the relaunch of the internal market and is a keen promoter of the digital single market.

Its resolution of 20 April 2012 on ‘a competitive digital single market — eGovernment as a spearhead’[12] pointed out the need for a clear and coherent legal framework for the mutual recognition of electronic authentication, identification and signatures, which is necessary in order to enable cross-border administrative services to operate throughout the EU.

On 11 December 2012 Parliament adopted two non-legislative resolutions relating to the internal market, one on completing the Digital Single Market[13] and the other on a Digital Freedom Strategy in EU Foreign Policy[14]. The aim of the resolutions was to develop policy and practice with a view to establishing a real digital single market in the EU in order to cope with 27 different sets of rules in key areas including VAT, postal services and intellectual property rights. Connecting SMEs to the digital revolution through genuine, well developed pan-European e-commerce is one of the recommendations made to the Commission and the Council with a view to breaking down digital barriers between Member States.

On 4 July 2013 Parliament adopted a further resolution on completing the digital single market[15], focusing on tapping the full potential of the digital single market, addressing the skills gap, building trust, security and consumer confidence, creating an attractive legal supply of digital content, building mobility services and the international dimension, as a contribution to a possible Single Market Act III focusing on the digital single market.

[1]The Lisbon Strategy aimed to make the EU ‘the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion’.

[2] http://ec.europa.eu/digital-agenda/

[3]See Streaming and Online Access to Content and Services, study prepared for Parliament’s Committee on the Internal Market and Consumer Protection, 2014, http://www.europarl.europa.eu/RegData/etudes/etudes/join/2014/492435/IPOL-IMCO_ET(2014)492435_EN.pdf

[4]For a calculation of the benefits of recent initiatives, see: ‘Roadmap to Digital Single Market’, briefing note prepared for the European Parliament Committee on the Internal Market and Consumer Protection (2012), http://www.europarl.europa.eu/document/activities/cont/201209/20120914ATT51402/20120914ATT51402EN.pdf

[5]See European Single Point of Contact, study prepared for Parliament’s Committee on the Internal Market and Consumer Protection, 2013, http://www.europarl.europa.eu/RegData/etudes/etudes/join/2013/507453/IPOL-IMCO_ET(2013)507453_EN.pdf

[6]See Mapping the Cost of Non-Europe, 2014-2019, study prepared for Parliament, 2014, http://www.europarl.europa.eu/RegData/etudes/etudes/join/2014/510983/IPOL-EAVA_ET(2014)510983_EN.pdf

[7]Commission communication on ‘Unleashing the Potential of Cloud Computing in Europe’ (COM(2012) 0529).

[8]Commission communication on ‘A coherent framework for building trust in the Digital Single Market for e-commerce and online services’ (COM(2011) 0942).

[9]Earlier efforts sought to improve the operation of the internal market and ensure consumer protection through e.g.: the Data Protection Directive (95/46/EC; a 2012 proposal for a General Data Protection Regulation is currently being discussed by Parliament), the e-Commerce Directive (2000/31/EC), the Telecommunication Package including the e-Privacy Directive (2002/58/EC), the Payment Services Directive (2007/64/EC), the Consumer Rights Directive (2011/83/EU) and the Roaming Regulation (531/2012).

[10]OJ C 161 E, 31.5.2011, p. 84.

[11]Commission communication entitled ‘Taking stock of the Europe 2020 strategy for smart, sustainable and inclusive growth’, COM(2014) 0130.

[12]Texts adopted, P7_TA(2012)0140.

[13]Texts adopted, P7_TA(2012)0468.

[14]Texts adopted, P7_TA(2012)0470.

[15]Texts adopted, P7_TA(2013)0327.

Mariusz Maciejewski

04/2014