The ubiquitous digital single market

The digital single market boosts the economy and improves quality of life through e-commerce and e-government. Market and government services are evolving from fixed to mobile platforms and becoming increasingly ubiquitous. These developments call for a European regulatory framework to develop cloud computing and borderless mobile data connectivity, while safeguarding privacy, personal data and cybersecurity. Parliament’s legislative achievements in constructing the European digital single market contribute an additional EUR 177 billion annually to European growth.

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 (2.4.3). The digital single market has been recognised as a priority by the Commission in its Digital Single Market (DSM) Strategy[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[4]. 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, because of cross-border trade and easier comparison of offers[5]. More e-government facilitates online compliance, and access to jobs and business opportunities for both citizens and businesses[6].

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 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[7]. 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’.

Further to the Europe 2020 strategy, in May 2010 the Commission published a report 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 covering 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[8], 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 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.

On 6 May 2015, the Commission adopted the Digital Single Market (DSM) Strategy, composed of three pillars: (1) better access for consumers and businesses to digital goods and services across Europe; (2) creating the right conditions and a level playing field for digital networks and innovative services to flourish; (3) maximising the growth potential of the digital economy. The Commission drew up a roadmap with 16 key actions under these pillars, to be initiated by the end of 2016[9]. To measure Europe’s progress towards a digital economy and society, the Commission created an online tool called ‘The Digital Economy and Society Index’[10] (DESI). It brings together a set of five relevant indicators on Europe’s current digital policy mix, which enables an overview of each Member State’s performance. Since the publication of the strategy, the Commission has tabled a number of legislative proposals aimed at achieving a digital single market. New legislative proposals aim to address issues such as unjustified geo-blocking[11], cross-border parcel delivery[12], cross-border portability of online content services[13], a revision of the Consumer Protection Cooperation Regulation[14], audiovisual media services[15], contracts for online and other distance sales of goods[16], and contracts for the supply of digital content[17]. The Commission has also published communications explaining future policy approaches, e.g. to online platforms[18].

Role of the European Parliament

Parliament has played a leading role in the relaunch of the internal market, and is a keen promoter and agenda setter for the digital single market[19].

Its resolution of 20 April 2012 on ‘a competitive digital single market — e-government as a spearhead’[20] pointed out the need for a clear and coherent legal framework for the mutual recognition of electronic authentication, identification and signatures, which is necessary 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[21], and the other on a Digital Freedom Strategy in EU Foreign Policy[22]. 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 and 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[23], focusing on tapping the full potential of the digital single market, addressing the skills gap, building trust, security and consumer confidence, creating an attractive and legal supply of digital content, and building mobility services and the international dimension. This resolution set out policy guidelines that were subsequently followed by the Commission in its Digital Single Market (DSM) Strategy. The achievements of Parliament in the digital area are built on preparatory work done by the e-commerce and Digital Single Market Working Group, chaired by MEP Róża Gräfin von Thun und Hohenstein.

In response to the DSM Strategy, on 19 January 2016, Parliament adopted a resolution entitled ‘Towards a Digital Single Market Act’[24] which called on the Commission to end unjustified geo-blocking practices, improve EU consumers’ access to goods and services, ensure equivalent and future-proof consumer protection (regardless of whether digital content is purchased online or offline), identify innovative solutions to cross-border parcel delivery in order to improve services and lower costs, remove barriers to SMEs, start-ups and scale-ups, and seize the opportunities arising from new ICT technologies, such as big data, cloud computing, the Internet of Things and 3D printing. Parliament argued that an innovation-friendly policy towards online platforms (e.g. search engines, app stores) that facilitates market entry should be maintained, and favoured a review of the e-Privacy Directive to ensure the consistency of its provisions with the new EU data protection rules.

Parliament is building the digital single market through intensive legislative activity. The most recent legislation covers: the introduction of net neutrality guarantees; the elimination of roaming charges on 15 June 2017[25]; prohibition of unjustified geoblocking practices[26]; the introduction of a Single Digital Gateway[27]; and adoption of the directive on measures to reduce the cost of deploying high-speed electronic communications networks[28], the regulation on electronic identification and trust services for electronic transactions in the internal market[29], and the directive on European cybersecurity rules[30]. As for the data protection package[31], Regulation (EU) 2016/679 and Directive (EU) 2016/680 were published in the Official Journal of the European Union on 4 May 2016[32]. These texts guarantee easier access for citizens to their own data and information on how the data is processed, a right to data portability, a clarified ‘right to be forgotten’, and the right to know when one’s data has been hacked[33]. The Regulation entered into force on 25 May 2018. Member States were required to transpose the directive into their national law by 6 May 2018[34]. Parliament is currently completing extensive legislative work on proposals presented as a follow-up to the DSM Strategy and the Parliament resolution entitled ‘Towards a Digital Single Market Act’[35].

Parliament’s legislative achievements contribute EUR 177 billion to growth in the EU every year. The most important gains from European legislation are in such areas as European electronic communications and services (EUR 86.1 billion), data flows and artificial intelligence (EUR 51.6 billion), the Single Digital Gateway (EUR 20 billion), and the geo-blocking regulation and provisions on online platforms (EUR 14 billion)[36].

Research carried out for Parliament shows the significant potential of the digital single market in reducing costs and barriers in Europe for citizens and businesses[37], and making the European economy greener[38] and more social[39]. In Europe, a significant part of this potential can be achieved through the development of e-government and related services such as e-health[40].

 

[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’.
[4]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
[5]For a calculation of the benefits of recent initiatives, see: ‘Roadmap to Digital Single Market’, briefing note prepared for Parliament’s Committee on the Internal Market and Consumer Protection (2012), http://www.europarl.europa.eu/document/activities/cont/201209/20120914ATT51402/20120914ATT51402EN.pdf
[6]See ‘A 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
[7]Earlier efforts sought to improve the operation of the internal market and ensure consumer protection through, for example: the Data Protection Directive (95/46/EC), 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).
[11]Proposal for a regulation on addressing geo-blocking and other forms of discrimination based on customers’ nationality, place of residence or place of establishment within the internal market, COM(2016)0289
[12]Proposal for a regulation on cross-border parcel delivery services, COM(2016)0285
[13]Proposal for a regulation on ensuring the cross-border portability of online content services in the internal market, COM(2015)0627
[14]Proposal for a regulation on cooperation between national authorities responsible for the enforcement of consumer protection laws, COM(2016)0283
[15]Proposal for a directive of the European Parliament and of the Council amending Directive 2010/13/EU on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services in view of changing market realities, COM(2016)0287
[16]Proposal for a directive of the European Parliament and of the Council on certain aspects concerning contracts for the online and other distance sales of goods, COM(2015)0635
[17]Proposal for a directive of the European Parliament and of the Council on certain aspects concerning contracts for the supply of digital content, COM(2015)0634
[18]Commission communication of 25 May 2016 on Online Platforms and the Digital Single Market, Opportunities and Challenges for Europe, COM(2016)0288
[19]For an interactive overview of Parliament’s legislative activities in the area of the digital single market see: http://www.europarl.europa.eu/RegData/etudes/ATAG/2015/542204/IPOL_ATA(2015)542204_EN.pdf
[26]Regulation (EU) 2018/302 of the European Parliament and of the Council of 28 February 2018 on addressing unjustified geo-blocking and other forms of discrimination, OJ L 60 I, 2.3.2018, p. 1.
[27]Regulation (EU) 2018/1724, OJ L 295, 21.11.2018, p. 1.
[30]Directive (EU) 2016/1148, OJ L 194, 19.7.2016, p. 1.
[31]Personal data protection: processing and free movement of data, http://www.europarl.europa.eu/oeil/popups/ficheprocedure.do?reference=2012/0011(COD)&l=en
[32]OJ L 119, 4.5.2016, p. 1 and 89.
[34]‘The European Commission’s priorities’, http://ec.europa.eu/justice/data-protection/
[36]Study on ‘Contribution to Growth: The European Digital Single Market. Delivering economic benefits for citizens and businesses’ (2019), prepared by Policy Department A and Bruegel for the Committee on the Internal Market and Consumer Protection, http://www.europarl.europa.eu/RegData/etudes/STUD/2019/631044/IPOL_STU(2019)631044_EN.pdf
[37]Study on ‘Reducing costs and barriers for businesses in the Single Market’ (2016), prepared by Policy Department A and London Economics for the Committee on the Internal Market and Consumer Protection, http://www.europarl.europa.eu/RegData/etudes/STUD/2016/578966/IPOL_STU(2016)578966_EN.pdf
[38]Study on ‘Longer lifetime for products’ (2016), prepared by Policy Department A and TNO for the Committee on the Internal Market and Consumer Protection.
[39]Study on ‘Social economy’ (2016), prepared by Policy Department A and Optimity Advisors for the Committee on the Internal Market and Consumer Protection, http://www.europarl.europa.eu/RegData/etudes/STUD/2016/578969/IPOL_STU(2016)578969_EN.pdf
[40]Study on ‘Ubiquitous developments of the Digital Single Market’ (2013), prepared by Policy Department A and a consortium of WIK, RAND and TNO for the Committee on the Internal Market and Consumer Protection. http://www.europarl.europa.eu/RegData/etudes/etudes/join/2013/507481/IPOL-IMCO_ET(2013)507481_EN.pdf

Mariusz Maciejewski / Christina Ratcliff