In its ambitious digital single market strategy the European Commission has included several proposals designed to help consumers take advantage of the products and services on offer. But while confident consumers are good for business, it is also true that confident businesses are good for consumers too.
Digital technology is empowering consumers the world over. It has revolutionised how we communicate, work, travel, shop, learn, express and entertain ourselves. Consumers and their needs and wants lie at the centre of the process of digital product and service development.
In such a highly competitive digital market tech companies cannot afford not to listen to their customers. Failure to deliver what they want leads rapidly to lost market share and shrinking sales.
It’s important to remember that the interests of digital users and the providers of digital products and services are closely aligned. Especially when it comes to developing European policies aimed at protecting consumers.
Policymakers must ensure that the legal environment they build allows consumers to grasp the opportunities that the technologies offer, while at the same time providing them with the safeguards they need against among other things the real risks of market failure.
In its ambitious digital single market strategy the European Commission has included several proposals designed to help consumers take advantage of the products and services on offer. DIGITALEUROPE is very involved in these policy debates.
Three policy areas deserve special attention: eCommerce, audiovisual media services, and copyright.
DIGITALEUROPE welcomes the ambition to unlock the potential of eCommerce. We believe that this will not only be of benefit to consumers and businesses but also to the European economy as a whole.
In this area, consumers are already benefiting from a strong set of consumer laws designed to build consumer trust online. We believe that it is very important – and fully within the spirit of the Commission’s better regulation initiative – to promote existing rules and push for their proper enforcement before considering new rules. This is particularly important to consider while the European Commission is in the middle of its REFIT Fitness Check of consumer rights legislation.
As well as building trust among consumers, EU consumer policy should also aim to boost business confidence to sell online and across national borders.
This is very much in consumers’ interests too because they stand to benefit from greater choice and more price competition. The two Directives covering digital contracts as well as the Geoblocking Regulation must seek to deliver legal certainty to businesses by encouraging traders and service providers to make their offers available to consumers from another EU country.
Will the geoblocking initiative actually help reduce fragmentation in the digital single market and spur cross-border sales? It’s not clear. Companies have to adapt to a variety of national market conditions such as national standards of living, consumer habits and preferences, language requirements, as well as the need for businesses to comply with diverging local technical and legal rules on consumer rights, VAT rates, copyright, or rules on the disposal of electronic waste.
These differences are what fragment the EU market, not how companies respond to them. If we really want to develop a digitally powered single market the EU needs to address the root causes of the fragmentation, not just the ways companies respond to them. In other words, there can only really be a Digital Single Market where a single market already exists.
The EU effort to reform rules for audiovisual media services (AVMS) risks denying consumers the benefits that technology offers them. New online services and the development of new consumer devices capable of delivering these services to viewers at home or on the move, in real time or at a more convenient time later herald an explosion of consumer choice.
And this consumer empowerment will lead to an increase in diversity in content. The AVMS Directive should look at this increase in consumer choice and its corresponding intensification of competition among suppliers to find ways to maximize the benefits to consumers.
With reform of copyright law EU policymakers must avoid being coerced into defending a status quo that suits a particular set of commercial interests. Last December, the Commission correctly identified the flaws in Europe’s fragmented approach to copyright levies.
Yet in its proposal for reform published last month copyright levies reform was skipped. Since then the Commission has said it may still take action to address what has been dubbed the ‘cassette tax’. There can’t be a digital single market when each EU country takes a different approach to copyright levies. Charging consumers many times over for the right to listen to the same piece of music, for example, is not only inefficient and inconsistent, it’s downright unfair.
We wholeheartedly support the aims of the Digital Single Market. We also support policymakers’ efforts to make consumers feel more confident in the digital world. While confident consumers are good for business, it is also true that confident businesses are good for consumers too.
Photo credits: Don McCullough
If Standard Contractual Clauses (SCCs) suffer the same fate as Safe Harbour then transferring data to the US will in practice become almost impossible, further threatening to balkanize the Internet and to undermine international trade.
Eight months ago the Financial Times warned in an editorial that a ruling by the Court of Justice of the European Union (CJEU) to invalidate Safe Harbour, a commonly used legal mechanism for transferring data to the US, threatened to balkanize the Internet and undermine international trade.
That threat deepened sharply last week when Ireland’s top data protection authority, the Irish Data Protection Commission, announced it would refer another legal mechanism, Standard Contractual Clauses (SCCs) to the courts too.
After Safe Harbour was invalidated companies that need to transfer data as part of their day-to-day activities scrambled to find other legal methods to allow them to continue. One such method is the Standard Contractual Clause.
If SCCs suffer the same fate as Safe Harbour then transferring data to the US will in practice become almost impossible.
But it’s not just transatlantic data flows that are being called into question. Companies use SCCs to transfer data all over the world.
If Europe’s courts conclude that SCCs are no safer than Safe Harbour this could effectively cut Europe out of the emerging global data economy, and that would hurt companies from almost every corner of the economy – not just the tech sector.
Global data flows are vital to international trade. Forcing companies to store their data within Europe will have serious implications for Europe’s economic prospects.
As the European Data Protection Supervisor, Giovanni Buttarelli himself said last week, it is unreasonable to ask companies to reinvent their practises all the time.
I would urge Europe’s data protection authorities to stop shifting the legal goal posts for international data transfers and to wait until Safe Harbour’s intended replacement, the Privacy Shield, has been given a chance to work.
The Privacy Shield, with its Ombudsperson role, would address the key concerns about EU citizens’ potential exposure to unwarranted surveillance by US security agencies.
Privacy activists have dismissed the Privacy Shield before it’s even been given a chance to work. Jumping to a negative conclusion when so much is at stake seems rather reckless.
Right now we need more legal certainty, not less. Give Privacy Shield a chance. If necessary make fixes once it’s in place but don’t throw companies into a legal black hole by closing down all options for international data transfers.
Picture credits: Devin Poolman
The European Commission’s strategy for “digitizing” industry that was unveiled today is a good step in the right direction. The digital industry will play its part but we need a business and policy environment that maximises our chances to take advantage of this opportunity.
In the build-up to last May’s unveiling of the Digital Single Market (DSM) strategy DIGITALEUROPE urged the European Commission to focus its efforts on preparing Europe’s economy for the digital transformation. This week’s package of initiatives does just that.
We are getting to the meat of the DSM, and not a minute too soon. Last month at our Masters of Digital event the final panel discussion involved speakers from agriculture, auto manufacturing and financial services, talking about how digital technology is already redefining their industries.
Just three years ago discussions about how drones and automated tractors can improve farmers’ efficiency, how 3D-printed car parts can help build cars tailored to local market conditions, or how a phone could replace a bank card would have sounded like science fiction. It involves science but it’s not fiction.
These are a few examples of how the digital transformation is already underway.
The technology package of initiatives unveiled today correctly identifies some of the core elements of the digital transformation.
And contrary to what some feared, it isn’t a rush to regulate. Instead, there are some pragmatic suggestions how Europe should make better use of the technologies on offer. Innovation in the areas of high-performance computing and cloud needs to be encouraged in an inclusive way.
The proposed “innovation hubs” are an excellent idea. To be truly effective they will need to be embraced by Europe’s business community. We’ve seen really great examples of this in some of Europe’s leading cities.
The focus on developing digital skills is also to be welcomed. It is important to ramp up efforts to ensure Europe has the digital skills we need to make the most of the digital opportunities. I would add that policy makers and educators themselves need training to appreciate the impact of new technologies.
The inclusive approach seen in the cloud initiative is also evident in the approach to ICT standardisation laid out by the Commission, with its emphasis on collaboration between public and private sectors. We have a unique opportunity to master digital for the benefit of all Europeans.
The digital industry will play its part but we need a business and policy environment that maximises our chances to take advantage of this opportunity. This week’s announcements by the Commission are a good step in the right direction.
DIGITALEUROPE wants two things for Europe; first, for us to get the best from digital – to have strong productive economies, efficient public services and citizens enjoying digital technologies as part of their daily lives.
And second we want Europe to be a great place for the digital sector – including DIGITALEUROPE’s members – to thrive and grow. Put simply – ours is a vision of a Europe that has mastered digital.
We see around us everyday the great promise that digital technology offers. We watch the transformation of great European businesses. We hear about new tech, and tech-driven businesses growing and thriving, and we see the increasing attractiveness of many European cities and regions to investors.
But are we doing enough to harness the potential of digital technologies?
DIGITALEUROPE measures the DSM elements against a set of principles we think are pre-requisites to achieving our vision – the masters of digital vision. They include the following:
– Does the initiative take us towards a single market fit for the digital age? Does it break down national silos?
– Will it encourage innovation and entrepreneurship?
– Is the initiative simply shielding the status quo from change? For example, by protecting an incumbent industry or national icon, or trying to protect jobs threatened by technological progress or just new fair competition?
– Are new rules really needed or could existing rules be used more effectively? And if they are needed have the policymakers designed them in the least burdensome, and most straightforward way possible?
– Does the initiative recognise the global nature of digital? If so will it encourage European companies and citizens to want access to products, services and customers from around the globe? And will it allow European businesses to take advantage of a global approach to standards?
– Finally, and most important of all, will the DSM encourage economic growth and the creation of good quality European jobs?
This week’s announcements appear to uphold these principles. The emphasis on collaboration with industry that runs through all the separate elements of the technology package bodes well for Europe’s on-going digital transformation, and its ability to boost growth and create jobs in the digital age.
Picture credits: Lukas Budimaier
Looking at Europe’s digital progress, 2015 started under great promise but didn’t end quite so well. So how can Europe do better? Here are 5 tests I’ll be applying in a year’s time.
Must do (quite a lot) better in 2016. Yes, it’s a cliché but that might well be the end-of-year report on Europe’s digital progress in 2015.
It started with great promise; President Juncker making snappy videos about his digital street cred, a Vice-President for the Digital Single Market and a Commissioner for Digital Economy and Society, and DSM strategy with welcome consultations.
But the year didn’t end quite so well, did it?
A compromise on data protection that didn’t deliver on its original promise of reduced costs for business, with a single consistent approach across Europe and a one-stop-shop; real uncertainty for many businesses thanks to the ruling on Safe Harbour, and endless examples of incumbent interests seeing off the disruptors who had the temerity to use digital to offer better, cheaper service to European city dwellers.
So how can Europe do better this year? Here are 5 tests I’ll be applying in a year’s time.
First, and it’s a big one, I’ll be asking whether we give as much weight to gaining the benefits of the new, and increasingly global, data economy and society – from health benefits to wealth benefits – as we do to the important task of keeping our data safe and secure. Have we grasped the opportunities of global data flows and resisted unproductive forced localization?
Second, make it more attractive, not less, to invest in Europe’s digital infrastructure. If the EU is to lead the way to 5G, crucial bands will have to be made available in a coordinated and timely way, putting an end to today’s national fragmentation.
My third test: make a real improvement in the quality and quantity of digital skills available both to tech suppliers and their customers in Europe’s industries and public services alike. At the end of the year I want to see that Europe’s citizens can easily and cheaply acquire the digital skills they need to be active in our digital Europe.
Next really do unlock the potential of e-commerce. Don’t just say you’ll do so while building new barriers and making consumer rules in the online world different from, and more complicated than the off-line world – recognise that for most Europeans this distinction is fast disappearing.
Fifth and finally, I want to see that many more of Europe’s business leaders and politicians have grasped and actively promoted the power of digital to modernise our industries and improve public services to drive the single market. Will we have shifted our thinking to exploit the power of modern platforms rather than worrying about them?
To borrow from Machiavelli, Europe has to tackle the powerful vested interests that profit from the status quo, while at the same time embracing the disruptors who dare to challenge them.
I look forward to seeing you again next year and I have every expectation of a better report.
photo credit: Tom Gill
The Safe Harbour agreement is not the appropriate instrument to solve transatlantic tensions over government mass surveillance in the US. The issue should be addressed separately from the US-EU commercial agreement regulating data transfer, whose suspension would leave companies in the middle of a jurisdictional conflict they cannot themselves resolve.
The EU-US Safe Harbour agreement has been the subject of a great deal of interest in recent weeks. At the end of March the head of the Article 29 Working Party, which represents Europe’s data protection authorities, raised the subject in the context of mass surveillance of private data by US security agencies in front of the European Parliament’s Civil Liberties (LIBE) Committee.
At the same time Justice Commissioner Vera Jourova announced that she intends to conclude a revision of safe harbor with her US counterparts at the end of May. The debate is set to intensify this month as negotiators count down to the self-imposed deadline for revising the 14-year old bilateral agreement.
Amid all this attention it is worth pointing out a few things about Safe Harbour that have been overlooked in much of the media coverage of the subject, and to explain why it is so important to revise rather than suspend the mechanism.
The EU-US Safe Harbour agreement facilitates transatlantic transfers of commercial data by European and US companies of all sizes. It is a vital tool for a wide range of industries engaged in the trade in goods and services between the EU and the US.
The agreement needs to be refreshed and we support the efforts of the European Commission to improve it. We are confident that the reform of Safe Harbour can be achieved through political discussions between the two trading partners.
While respecting citizens’ right to privacy, we believe an improved Safe Harbour agreement must continue to facilitate data transfers conducted by law-abiding companies.
Any suspension of Safe Harbour would affect American and European companies alike, and it would be especially burdensome for small and medium size enterprises that use the mechanism for data transfers to the US.
A suspension would clog up perfectly legitimate, non-controversial, safe flows of non-personal as well as personal data, and it would therefore have significant economic consequences for the US and the EU.
Similarly, if national data protection authorities were empowered to override EU level agreements such as Safe Harbour, as suggested by some national data protection authorities last month during a hearing at the Court of Justice of the EU (CJEU), this would lead to the splintering of EU rules on international data transfers.
This in turn would undermine efforts to create a digital single market, and instead create even more fragmentation and legal uncertainty within the EU than there is today. At the heart of the case being heard in court last month is the issue of protection of a citizen’s private data from US security agency surveillance.
The tech industry in the US has joined forces with privacy groups in opposing efforts to extend bulk surveillance by US security agencies. In Europe we have been criticised by European security agencies for placing too high a priority on citizens’ privacy.
DIGITALEUROPE shares the concerns of the public and opposes the bulk collection of citizen’s data by state security agencies. However, the Safe Harbour agreement is not the appropriate instrument to solve this problem. Isabelle Falque-Pierrotin, Chair of the Article 29 Working Party said as much at a meeting with the European Parliament‘s LIBE Committee at the end of March.
Attempting to solve the problem through the revision of Safe Harbour would only deflect attention from the real discussions that need to occur.
It requires direct government-to-government negotiations on the norms in cyber surveillance and access by authorities. It cannot be resolved in a commercial agreement, which would leave companies in the middle of a jurisdictional conflict they cannot themselves resolve.
We urge the European Commission, which leads the European negotiating team, to treat this task separately from the revision of rules to allow for the transfer of commercial data from Europe to the US. For more information please read our position paper on the Safe Harbour revision.
photo credits: Linda Tanner
The European Commission has taken an important first step in outlining possible elements of an EU action plan on Big Data. It is now essential to get the policy framework right. The faster the better.
A second wave of digital transformation is coming.
The first one revolutionized the way we order information and spans technological advances from the advent of the mainframe computer to the arrival of Internet search.
[Tweet “This second wave will reinvent how we make things and solve problems.”]
Broadly it can be summed up in two words: Big Data. The expression ‘Big Data’ is used to describe the ability to collect very large quantities of data from a growing number of devices connected through the Internet.
Thanks to vast storage capacity and easy access to supercomputing power – both often provided in the cloud – and rapid progress in analytical capabilities, massive datasets can be stored, combined and analysed. In the next five years Big Data will help make breakthroughs in medical research in the fight against terminal illnesses. Per capita energy consumption will decline sharply thanks to smart metering another application of Big Data.
Traffic jams will be rarer, managing extreme weather conditions will become more science, less guesswork. Makers of consumer goods of all kinds will be able to reduce waste by tailoring production to actual demand. This new ‘data economy’ will be fertile ground that will allow many new European SMEs to flourish.
Broad adoption of such Big Data applications can only happen if the data is allowed to flow freely, and if it can be gathered, shared and analysed by trusted sources. Size definitely does matter. The bigger the dataset, the more insights we can glean from it, so it’s important that the data can flow as widely as possible.
[Tweet “Some elements of Big Data might involve personal data.”]
People need to be confident these are protected by laws and agreements (such as safe harbour). All actors in the data economy must work hard to ensure that data is as secure as possible against theft and fraud.
The European Commission has taken an important first step in outlining possible elements of an EU action plan for advancing towards the data-driven economy and addressing Europe’s future societal challenges.
To complement this initiative DIGITALEUROPE has drafted a paper outlining what we see as the policy focus in relation to Big Data.
We have identified eight priorities:
– Adopt a harmonised, risk-based and modern EU framework for personal data protection that creates trust while at the same time enabling societally beneficial innovations in the data economy
– Encourage the protection of Big Data applications from cyber attacks, focusing regulatory efforts on truly critical infrastructures
– Support the development of global, voluntary, market-driven and technology-neutral standards to ensure interoperability of datasets
– Clarify the application of EU copyright rules so to facilitate text and data mining
– Boost the deployment of Open Data by transposing the Public Sector Information Directive into national law by June 2015 at the latest (EU Member States)
– Create trust in cross-border data flows by supporting the implementation of the Trusted Cloud Europe recommendations
– Continue addressing the data skills gap by supporting initiatives like the Grand Coalition for Digital Jobs
– Continue encouraging private investment in broadband infrastructure and HPC technologies with public funding DIGITALEUROPE is ready to engage constructively with the European Commission, Parliament and Council to help them formulate a European action plan for the data economy
It is essential to get this policy framework right, but it is also important to move fast. While Europe is preparing the ground for widespread adoption of the new digital age, the rest of the world is not standing still.