A Look into the Benefits of the European Commission’s Digital Single Market Plan

A Look into the Benefits of the European Commission’s Digital Single Market Plan

Nicolette Figueroa, MJIL Staff

The European Union has fallen in the ranks of the global digital economic hierarchy. Specifically, Europe’s digital environment requires more investment to compete effectively with North America and Asia.[1] Current research indicates that the United States’ digital presence encompasses most of Europe’s e-Commerce sector, where many crucial online-trading platform services in the European e-Commerce domain are owned by U.S. corporations.[2] Facebook, Google, Amazon and Apple, to name a few, maintain a dominant presence in the European Union, enabling them a tighter grasp on consumer business access to online markets.[3] “In almost all strategically important industrial sectors, European companies are being taken over by global markets [. . .] from the U.S. and emerging markets, resulting in the pressing threat of European industry becoming victims of global developments instead of successfully growing with them.”[4]

Europe’s lack of digital presence may be solved by the European Commission’s ambitious plan for a Digital Single Market (DSM).[5] A DSM is defined as “one in which the free movement of persons, services, and capital is ensured and where the individuals and businesses can seamlessly access and exercise online activities under conditions of fair competition, and a high level of consumer and personal data protection, irrespective of their nationality or place of residence. [6] The DSM could potentially contribute 415 billion euros per year to Europe’s economy as well as provide jobs and transform public services.[7] In order to begin this process, the European Commission lists the following as its objectives: concluding negotiations on EU data protection rules, modifying copyright rules to adapt to new technologies and make them simpler and clearer, clarifying rules for online transactions, simplifying the process for innovators to create companies, boosting its citizens’ digital skills, and allowing enjoyment of the same online content and services regardless of the EU country.[8]

The DSM, once fully initiated, may provide several benefits to European Union citizens. Europe’s current fragmented marketplace currently strains the fluidity of cross-border transactions.[9] The DSM aims to abolish this fragmentation, which would allow businesses in the EU to no longer struggle to learn and comply with each of the individual Member States’ laws and regulations. [10] Many small businesses in Europe are dissuaded from selling their products online or expanding to different Member States because of the complexity of complying with those countries’ laws.[11] Thus, a DSM would expand the breadth of products and services available to EU consumers.

Another benefit of the DSM is that it will guide the EU away from the practice of geo-blocking. Geo-blocking denies access to users in one country to websites based in another country.[12] Geo-blocking accounts for the, “sorry this content is not yet available in your country” pop-up travelers often encounter while trying to access Netflix out of their home country.[13] After the EU fully implements the DSM, EU consumers will be exposed to a variety of opportunities that they were once denied by the practice of geo-blocking. For instance, Netflix must individually contract with the EU Member States to license its content for use but after the DSM it can easily license its content across the entire EU.[14] This allows EU consumers to access a greater selection of Netflix content. In addition, EU consumers may also access different websites providing other media, products, services, etc.[15]

The DSM is undoubtedly an ambitious plan that will not be fully established without experiencing some challenges along the way. However, once a DSM can finally be implemented it seems the European Union will be well on its way to increasing its global digital presence.

[1] Wolfgang Bock, Manaw Mohan, Peter Soos & Maikel Wilms, Five Priorities for Achieving Europe’s Digital Single Market 4 The Boston Consulting Group (2015).

[2] Carole Tongue, Digital Single Market: Who is in Charge and Does it Matter?, Policy Review (July 2015),http://www.policyreview.eu/1507-digital-single-market-who-is-in-charge-and-does-it-matter/.

[3] Id.

[4] Id.

[5] Digital Agenda for Europe, Digital Single Market, European Commission (Last updated Jan. 21, 2016, 12:21 PM), http://ec.europa.eu/digital-agenda/en/digital-single-market.

[6] Id.

[7] Id.

[8] Id.

[9] See Id.

[10] Miriam Sapiro, Forging an EU Digital Single Market: Difficulties and Opportunities, Brookings (Sept. 22, 2015 12:21 PM), http://www.brookings.edu/blogs/up-front/posts/2015/09/22-european-union-digital-single-market-sapiro.

[11] Commission Staff and Working Document A Digital Single Market Strategy for Europe – Analysis and Evidence, at 4, COM (2015) 192 final (May 6, 2015).

[12] Kiran Desai and Manu Mohan, Digital Single Market Strategy Launched, Mayer Brown 2 (May 2015), https://www.mayerbrown.com/files/Publication/ca7cfae0-ef3a-41d8-8d97-54857f53b8d5/Presentation/PublicationAttachment/7aab4112-a8a4-4184-b5b4-5acd41b0d86e/150505bru_Digital_Single_Market_Strategy_Launched.pdf.

[13] Ernesto Van der Sar, EU Proposal Bans Netflix-Style Geo Blocking and Restrictions, Torrent Freak (Dec. 9, 2015), https://torrentfreak.com/eu-proposal-bans-netflix-style-geo-blocking-and-restrictions-151209/.

[14] Ben Johnson, Digital Single Market- The Good, The Bad, and The Future of the Economic Film Industry, Medium (Dec. 10, 2015), https://medium.com/@ProjectGruvi/digital-single-market-the-good-the-bad-and-the-future-of-the-european-film-industry-1a703ad190d#.pdx69dlvz.

[15] See Digital Agenda for Europe, supra note 5.