Free of the shackles of EU law when Brexit becomes a reality then the UK can offer businesses the flexibility that is needed in a modern world. But we need to ensure that key personnel have the ability to travel to and from the UK with as little hindrance as possible, says conservative MP Andrew Bingham.
The Digital Post: What Brexit means for the UK digital economy? A danger? An opportunity?
Andrew Bingham: Brexit presents huge opportunities for the UK in all areas of the economy and the digital economy is no different. Free of the shackles of EU law when Brexit becomes a reality then the UK can offer the flexibility that is needed in a modern world. The digital economy by its very nature is changing rapidly as new technologies emerge, grow and become commonplace. Countries wishing to benefit from these innovations need to be responsive and agile. The UK out of the EU can and, in my opinion, will be both these things.
TDP: Do you think there is a real risk of digital companies relocating outside the UK? How do you plan to counter this?
Andrew Bingham: No I don’t feel that digital companies will look to move out of the UK. The country has a proud record of being at the forefront of technology and innovation and this will continue. The UK is and will remain a good place to do business.
TDP: Broadly speaking, what policies are needed to ensure that UK digital economy will keep thriving outside the EU?
Andrew Bingham: The freedom of movement is a very hot political topic but whilst retaining the ability of the UK to control its own borders, we need to ensure that key personnel have the ability to travel to and from the UK with as little hindrance as possible. During a recent visit to Barcelona looking at the impact of Brexit on the creative sector this was a message that came across. Companies who operate in the EU and the UK have personnel shuttling between their two offices and thereby the two countries regularly. They need to be able to continue to do so.
TDP: The UK startup ecosystem seems very concerned about possible restrictions to freedom of movement for workers resulting from Brexit. That will stop them from recruiting high qualified staff from other countries. What is your opinion?
Andrew Bingham: In line with the previous answer, however I believe that this can easily be addressed. Things operated efficiently before freedom of movement came into being and I believe a return to a similar arrangement is perfectly feasible. With regard to recruiting from other countries, I feel that the UK will remain a centre for digital technologies where the brightest and the best will wish to come and work. The Governments stated aim to create a business friendly environment through a variety of taxation policies and finance initiatives will provide great incentives to start up businesses and encourage existing companies to retain a UK presence.
Picture credit: Kalle Paulsson
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
The Digital Post talked to Krzysztof Szubert, Plenipotentiary of Minister for International Affairs and Strategic Advisor to the Minister, about Poland’s ambitious plans to boost digital infrastructures and services.
The Digital Post: What are the main priorities of Digital Poland?
Krzysztof Szubert: Poland aspires to the group of leading EU countries, thus we need to take an active political position with regard to digital transformation of the state. We need to support the strategy for developing the information society combined with efficient coordination of this process. Having that in mind, we have decided with Minister Anna Strezynska, to develop up to 20-pages long document “Strategic Action Priorities of the Minister of Digital Affairs”. It is based on 5 pillars and 18 actions.
The five fundamental principles are: 1) the state should serve the citizen – thanks to digital technology the state should connect dispersed institutions and change complex procedures into consistent and simple services; 2) access to the public network and services must be safe for our data and all types of transactions conducted in the network; 3) in order to pursue e-administration targets, but above all, to achieve social and economic goals, it is necessary to accelerate the development of modern telecommunications infrastructure; 4) development of the desired innovative economy needs permanent and easy access to data gathered by public services and we need to constantly – regardless of age – improve our digital competences to effectively benefit from digitization and compete on the global market.
We are very much aware that this is not cherry-picking as for those principles to bear fruit it is necessary to observe them all together while developing any strategic public service actions. We have put together as many as 18 of them and their wide variety ranges from having one gate to services, and across adopting standards of electronic circulation of documents down to being more effective in the EU or other international institutions so that we have a stronger say on the law that is shaped up there.
TDP: How these plans could make the difference?
KS: First of all, we do have the strategy in place to follow. Over the last many years it has been the chaotic way of development and making available of electronic public services that have limited access to them to very narrow groups of recipients with their interoperability being far from ideal.
Each Polish citizen, organization and entrepreneur should be able to settle any official matter electronically while contacting any level of public administration. When we deliver that, “we will win”. What makes this strategy stand out from any previous attempts is that we really want not only the whole government participating but also wide support from all other stakeholders. The draft priorities had been available for public comment and we received huge input that finally became part of what we are implementing now.
TDP: What are the highest challenges Poland is facing in terms of digital?
KS: Lack of coordination as well as deficit of efficient project management of Polish administration directly affect the quality of development of e-administration which is all about providing facilitations for citizens and entrepreneurs. It is necessary to urgently improve methods of implementation of innovative projects and create the main center coordinating their management. To support that, we think that heading towards the national CIO model seems to be the right step. Efficiency of public administration systems is one of the conditions for the stability of the state – we have to convince our citizen and business to relay on them and to use them.
TDP: Do the Digital Single Market meet the expectations of Polish government? What are in your opinion the most important aspects of the strategy?
KS: Digitization is, in fact, the transformation of the state, rather than merely buying systems and equipment. By using modern technologies, the state can become a service provider. It is to develop faster, become more friendly and support the needs of citizens, entrepreneurs, organizations and local governments.
The DSM strategy in general is helping address those needs in many areas, but we have to be sure that it fits well into our specific market – that there is no place for one-size-fits-all. Digital Single Market requires efforts towards removing the real problems to the development of e-commerce within the EU. The main challenges the smart DSM will have to face are threefold: making sure the undertaken efforts put first the citizen, the consumer and the Internet user while adding as less as possible to regulatory burden for business with having single market benefits spread fairly equally among Member States.
TDP: Will Brexit affect European digital policies?
KS: As you may know, a broader vision of the digital single market (incl. digital policy) in the EU – supported by the Polish Government – is set out in works of the group of like-minded EU Member States which has recently been very active in making a strong consolidated voice heard in Brussels. There are 14 Member States including UK & Poland in it. We will continue to keep the same vision of building the solid foundation of the digital economy and moving the single market to the digital age without imposing new burdens on businesses.
The UK has so far been an important part of that message, and I hope it will continue to be such and that we can even convince other countries to “join the club”. Poland is now leading the V4 (the Visegrad Group) and we will stick to that vision regardless of the UK being in or out of the European Union, as long as digital single market and digital policies are bringing benefits both to the citizens and to the business sector. Therefore, one of the priorities of the Minister of Digital Affairs will be pursuing active and determined policy to reinforce our participation in developing the EU and international solutions and securing Poland’s social and economic benefits.
Picture credits: ArchiDju
The eHealth sector within the digital single market is expected to be worth 20 billion and tens of thousands of jobs, explains Greek MEP Eva Kaili.
The Digital Post: What the EU is currently doing to speed up the development and spread of eHealth services?
Eva Kaili: Over the last years we have seen significant progress. There are many initiative at EU and national level, the most important of which is the EU eHealth Action Plan 2012-2020. The Digital Single Market also represents a huge step forward. Moreover, the EU is funding research and innovative initiatives in the field as well as helping SMEs operating in this sector.
TDP: What are the main challenges for the further development of the ehealth technologies in Europe?
EK: Different languages, different mentalities, different legislation, different taxation, different education systems: these are all big challenges that we have to face, because it is clear that the development of the sector depends on more coordination among the EU member states. For instance, we still have different accreditation and validation systems in each country. In addition, the digital divide that still runs between the EU states makes things more difficult. The EU action plan on eHealth addresses comprehensively these issues aiming at building a union in the field of eHealth by 2020. I think we are almost halfway. The opportunity is huge: the eHealth sector in the digital single market is expected to be worth 20 billion and tens of thousands of jobs.
TDP: What further actions or policies should be taken at EU and national level?
EK: Overall, we need to go for smarter and flexible strategies which can be adapted to the peculiarities of very different countries. We cannot expect all member states to follow the same path at the same speed. I also think more has to be done on active aging as well as digital accessibility and digital literature. All these issues are fundamental to expand the reach and the adoption of eHealth tools among the population.
TDP: Do you think the Digital Single Market strategy will deliver?
EK: Yes, I think it can. We can already see the benefits of the efforts made in the last years towards a single digital market. Roaming fees, for instance, are about to disappear. Let me take another example in the field of eHealth. Thanks to eprescription you can have your medication in each country you go, just using your mobile phone.
This is part of a series of interviews held during the conference "Digital Single Market: Bridging the Gap" organized by the British Chamber of Commerce in Belgium. The event featured keynote speeches from Commissioner Oettinger Juhan Lepassaar and Robert Madelin (EPSC). Other speakers included senior EU officials, parliamentarians, trade bodies and business leaders who discussed the future challenges for business in the areas of fintech, e-health and industry 4.0.
Picture credits: Chuck Patch
On the sidelines of the European Business Summit The Digital Post met Ann Cairns, MasterCard’s President of International Markets, to discuss how digital technologies are making a difference in fighting the exclusion from financial services.
The Digital Post: What are the main activities or initiatives on financial inclusion which MasterCard has launched?
Ann Cairns: At MasterCard, we are committed to reaching people previously excluded from financial services and as part of this we have pledged to reach 500 million new consumers worldwide by 2020.
This means providing solutions that allow them to participate in the formal financial system. We have made good progress. And we fundamentally believe that technology, fintech and electronic payments are powerful tools to ensure we achieve that goal.
We have many initiatives worldwide, including several in emerging economies. For example, we have a partnership with the Social Security Agency in South Africa to issue 10 million biometric enabled social security Debit MasterCard cards.
The key feature of these cards is that the biometric functionality enables the Social Security Agency to ensure only qualifying grant recipients collect the grants.
A landmark public-private collaboration with the Egyptian government we announced last year aims at financially including 54 million citizens.
We worked with the Ministry of Communications and Information Technology, Ministry of Finance and the Egyptian Banking Corporation to roll out a digital ID programme that link citizens’ national ID to the existing national mobile money platform.
Financial exclusion is not just an issue in countries with emerging economies, it is a big challenge for many Europeans as well. There are many parts in Europe where vast parts of the population simply have no access or do not use formal financial services.
MasterCard commissioned a 10 -market online survey to understand European consumers’ perceptions of financial and digital inclusion, through the lens of gender inclusion.
The results of the survey showed that while almost half of consumers in Europe feel that there is a somewhat high or high level of financial inclusion in their country, less than one in four (22%) agree that Europe is the most financially and digitally (24%) inclusive region in the world.
MasterCard has partnered with many public authorities to launch systems to encourage financial inclusion. For example, we helped the London Borough of Brent to develop a new prepaid card programme for social benefits. The scheme ensures the money is being used by the right people and provides cost savings to the Council and consumers.
TDP: How can we leverage digital technology for financial inclusion?
AC: We see the future moving in the direction of the Internet of Things. As we made progress with financial inclusion we started to see that digital identity was actually something that was being used by governments around the world to roll out and register people, and also to include them in society. This is how we started to see inclusion as much broader than just financial inclusion and how it encompasses digital and gender.
Innovation is a key element for moving to a digitally inclusive society: MasterCard fully supports innovation and entering of new payment methods. The key to achieving inclusion lies in digital payment programmes. In order to deliver on consumers’ and merchants’ expectations for ever better ways of connecting the two MasterCard is continuously looking into new technologies and opportunities that can make that happen.
Public authorities also have a huge role to play. By switching their payments, be it social disbursements, salary payments or any other kind of payments onto electronic platforms, they can not only gain efficiencies for themselves but also make a significant contribution to bringing people into the financial mainstream.
Mobile payment platforms have also served as an opportunity to incorporate more individuals into the formal, existing financial system. While many people still do not have access to a bank account, more than 1 in 3 people in the world (2.6 billion) will be using smartphones within the next two years. And mobile phone and tablet users will be making almost 200 billion transactions annually by 2019.
For example, earlier this year MasterCard ‘s HomeSend venture expanded its agreement with the Vodafone Group for M-Pesa – the mobile phone service which allows people with no bank account to send and receive money, top up their phone and enjoy other services all through their mobile phones. Globally, M-Pesa now reaches 25.3 million users (including users in Europe, for example in Romania and Albania).
TDP: MasterCard has just published a new study on financial inclusion. What are its main findings?
AC: MasterCard commissioned a 10 -market online survey to understand European consumers’ perceptions of financial and digital inclusion, through the lens of gender inclusion.
The results of the survey showed that while almost half of consumers in Europe feel that there is a somewhat high or high level of financial inclusion in their country, less than one in four (22%) agree that Europe is the most financially and digitally (24%) inclusive region in the world.
Other key findings include:
– Fewer than half of Europeans (49%) believe there is a high level of financial inclusion in their country.
– The vast majority of Europeans (79%) believe men have a higher degree of financial and digital inclusion than women.
– 88% of respondents stated equal opportunities for Europeans in terms of access to financial and digital products, irrespective of gender, are vital for an open and inclusive society, but only 66% agree they have equal access themselves.
The results demonstrated that, in general, digital and financial inclusion were experiencing a very similar perception issue. So as the EU looks to build a true digital single market in Europe in which people can interact and transact cross-border as seamlessly as in their own country, we need to focus on tearing down the real barriers and ensure that everyone can reap the benefits of a more inclusive world. The Digital Single Market needs to be built with the consumer or end-user in mind.
TDP: Digital inclusion is still an issue also in several EU countries. Do you see governments committing enough to fixing the problem?
AC: What we see is that the perception of digital inclusion is comparable to inclusive growth. We believe that digital exclusion usually triggers or is triggered by other kinds of exclusion, such as financial or gender exclusion. The assumption that financial exclusion and in turn digital exclusion is a problem solely in developing economies alone could not be further from the truth. We found that roughly 90 million people in Western Europe are still underserved.
If we look at Europe – the European Commission has done some great work on financial inclusion in recent years. The EU Payments Account Directive was adopted in 2014 and provides for the right for all EU citizens to open a payment account that allows them to perform essential operations, such as receiving their salary, pensions and allowances or payment of utility bills etc.
With the Digital Single Market Strategy, the Commission is promoting technology and digital throughout the EU. As I referred to when speaking at the European Business Summit earlier this month, what is important is that inclusiveness is embedded into all digital policy initiatives. We need to ensure that the Digital Single Market is built with the citizen’s needs in mind so that it adds value to him or her.
From MasterCard’s experience, the increased engagement of government helps drive greater expansion of financial inclusion. For example, in the UK, we are working with many local authorities who are now issuing welfare payments through pre-paid cards.
Some of them have gone entirely cashless and processing all disbursements (e.g. welfare payments, child benefit, asylum seekers, etc.) electronically. Through these initiatives, citizens now have quicker and more secure access to their benefits. Meanwhile, we are seeing how the authorities themselves are enjoying significant savings thanks to increased efficiencies.
TDP: How can the private sector help public institutions or cooperate with them on expanding digital literacy as well as digital skills?
AC: The private sector is at the forefront of driving financial inclusion. But obviously we cannot do this alone: Public authorities have a crucial role to play. The Commission has recently consulted on various initiatives and published some very interesting proposals in areas such as e-government for example.
We welcome the Commission’s emphasis on public private cooperation as this is an area where MasterCard is very active and where we partner frequently with public institutions. The best example is the work around social disbursements onto prepaid cards.
Although the UK is one of the more advanced markets when it comes to promoting electronic payments for government expenditure, other countries are also making good progress.
In Italy, for example, we work with the national postal service to provide a simpler and more transparent tax collection system. We rolled-out new electronic payment terminals to help millions of Italians pay their taxes in the post office in a fast and safe way. In general, the benefits of going more digital are obvious.
((1] Juniper Research – Mobile commerce transactions to approach 200bn by 2019: http://www.juniperresearch.com/press/press-releases/mobile-commerce-transactions-to-approach-200bn-by
 New Financial Inclusion Study Spotlights Europe’s Financially Excluded, Press release available: http://newsroom.mastercard.com/press-releases/new-financial-inclusion-study-spotlights-europes-financially-excluded/
 For more information on our e-government activities: http://newsroom.mastercard.com/eu/photos/mastercard-government-services-and-solutions/
Picture Credits: John Ragai
In its “New Skills Agenda for Europe”, the European Commission outlines the need to spread digital skills and fight digital exclusion and acknowledges the important contribution of public libraries. In one year, 4.6 million Europeans accessed the internet for the first time at their public library and 2.3 million people attended digital literacy courses in libraries.
What does it mean to be digitally literate? The European Commission has its indicators: starting from browsing, searching and filtering information, to protecting personal data and coding. From the growing need for digital skills in the workplace, to benefiting from a range of services such as e-government and online banking, a baseline of digital skills is vital to full participation in modern society.
The danger is that with the digital revolution, we risk leaving many people behind. Nearly half of the EU has insufficient digital skills and nearly one in five people has never used the internet.
Older people and marginalised groups are especially at risk of digital exclusion. But the issue of digital illiteracy is also systemic in education; only 30% of students in the EU can be considered as digitally competent.
This is clearly a challenge for formal education systems. To meet this challenge, institutions like public libraries have an important role to play. There are 65,000 public libraries in the EU and 100 million people visit them every year.
Public libraries are not just a place to read and borrow books; they are a network of open spaces where people supplement their formal education, working on their digital skills and undertaking a huge range of other educational activities.
The data backs this up. In one year:
• 4.6 million Europeans accessed the internet for the first time at their public library
• 250,000 Europeans found a job thanks to internet access at a public library
• 2.3 million people attended digital literacy courses in libraries
The European Commission launched yesterday A New Skills Agenda for Europe, outlining how a boost in skills could help to tackle some of Europe’s greatest social and economic challenges. A “Skills Guarantee” has been announced to help people who are long-term unemployed get back to work, and a “Skills Tool Kit for Third Country Nationals” will be rolled out to help refugees and other migrants integrate into new communities.
An additional important element of the New Skills Agenda is the “Digital Skills for Europe” initiative, to boost the public’s competencies online and meet the objective of a European Digital Single Market.
We need to address digital skills in schools. However, in order to reach the widest group of people possible, we must also empower non-formal learning institutions. The vital role of public libraries as free-to-access community hubs comes into particular focus when it comes to the inclusion of hard-to-reach and vulnerable groups in policies to promote education and skills.
For example, Bozhidar Tchergarov, a blind Master’s student in Bulgaria, used his public library to learn how to use a computer and continues to attend library-run ICT training courses today. Or Filippo Gruni, a digital entrepreneur in Italy who has created a makerspace in his public library to improve the digital skills of his community.
As acknowledged by the Commission’s proposal to the Council on the Skills Guarantee, strengthening skills in Europe “should be encouraged to involve a broad range of actors, social partners, education and training providers, employers, intermediary and sectorial organisations, local and regional economic actors, employment, social and community services, libraries, civil society organisations.”
It is great to see the European Commission recognising the fantastic work being done to improve skills at public libraries across Europe. If you are interested in learning more about the role of libraries in digital skills development, visit us during the next EU Code Week (18-20 October) at the European Parliament, where Public Libraries 2020 will host an interactive exhibition on how Europe’s public libraries are meeting the digital age.
Picture credits: Eric Drost
The Digital Single Market strategy is a step in the right direction but the Commission must speed up its implementation, says Brian Ager, secretary-general of the European Roundtable of Industrialists.
The Digital Post: What is your general opinion about the Digital Single Market Strategy?
Brian Ager: We thought that it was an important first step to get everybody behind a common approach, and I believe it was a good move. I think it’s important to get an orientation, to get it out there and see what the reactions are.
TDP: Do you think this strategy is enough business-friendly? Can it provide a sufficient conducive investment climate that will help Europe catch up with other markets in the digital sector?
BA: Only time will tell. To be fair, a few legislative proposals have been already presented. But for the rest, the Strategy is only a piece of paper that in itself is worthless: it’s what flows from that that will matter. It is now important that the Strategy is translated into a series of policy measures that are the right ones. Are they going to be implemented effectively? And are they going to be implemented in a coherent way across the whole of the Union? If you can tick those boxes, then you’re likely to see investment flow. But the Strategy in itself it doesn’t. Well, it is better to say that it will not automatically lead to investment.
TDP: Do you think that the Strategy may lead to over-regulation?
BA: I think it’s a possibility. But this must not happen, if we’re serious about digital economy, because if it does, then you strangle the digital potential of the whole continent. Another matter of concern is that the implementation is too slow.
TDP: A number of observers from outside Europe pointed out that Europe is using a punitive approach towards US internet success stories or internet companies. Some are even talking about “digital protectionism”.
BA: The Internet economy is global by definition: if you want to seize its opportunities you need to take a global approach for a global market. I can’t see how Europe could be protectionist, it wouldn’t work anyway.
TDP: What do you think of the European Commission’s plan on Industry 4.0?
BA: Our first reaction is that overall the plan is a good step in the right direction. But I can’t help but notice that it was presented almost one year since the digital single market strategy was unveiled. We need to speed up the entire process.
TDP: Many fear that Industry 4.0 will be a huge job killer.
BA: I don’t think it’s so much doom and gloom. We feel clearly it will lead to some job losses, but it should also lead to the creation of other jobs, because you’re switching the economy from one type of activity to another. To be sure, the development of Industry 4.0 will lead to a switch from more low-skilled jobs to more high-skilled jobs. This change brings us to another crucial point, that is the responsiveness of the education systems. An extra effort is needed to drive our students towards math, technology and science-related studies, including math, physics, engineering and computer science. Today the industry complains that it’s missing half a million ICT engineers, software engineers, even mainstream engineering. The problem can be addressed only if we start working from the basic education. As far as the exiting work employment is concerned, we need to think very hard about vocational training, lifelong learning, re-skilling, because things are going to come along faster and faster.
This is part of a series of interviews held during the conference "Digital Single Market: Bridging the Gap" organized by the British Chamber of Commerce in Belgium. The event featured keynote speeches from Commissioner Oettinger Juhan Lepassaar and Robert Madelin (EPSC). Other speakers included senior EU officials, parliamentarians, trade bodies and business leaders who discussed the future challenges for business in the areas of fintech, e-health and industry 4.0.
Picture credits: Matt
As the regulation on cross-border portability goes through the European Parliament, MEP Emma McClarkin explains why it is important that the new legislation strike a balance between the needs of market, consumers and the creative industry.
How the European Parliament is expected to approach the legislation on cross-border portability?
What are the main elements to shape a balanced legislation?
What are the positions to emerge in the JURI and IMCO committee of the European Parliament?
How the proposal should define the scope of cross-border utilisation?
What is your opinion on the wider debate over the reform of the EU copyright framework?
The Digital Post spoke to Juhan Lepassaar, Head of Cabinet to Vice-
President Ansip, about the latest progress of the Digital Single Market strategy.
The Digital Post: How is the implementation of the Digital Single Market (DSM) strategy progressing?
Juhan Lepassaar: So far, we have adopted two key proposals on the harmonisation of digital contracts rules and on portability of digital content. In addition, in February the Commission presented legislation intended for greater coordination in the use of the 700 MHz band for mobile services. Last month, we also published a package on Industry 4.0 and e-government, containing a number of non-legislative actions that will help create the right environment to boost the digitalisation of the European industry.
During the month of May, we are going to unveil our e-commerce package, which will include actions to tackle unjustified geo-blocking and other forms of online discrimination practices. We will also present a proposal for the review of the audiovisual media services directive and a communication on the role of online platforms. Before the summer break, we plan to move forward with the public-private partnership on cyber security.
Then, the next big things are the review of the European telecoms framework in September or early October and the next steps of the modernisation of EU copyright rules. Finally, in autumn we will act on the free flow of data, we will table proposals on VAT for digital products and on corporate enforcement rules.
TDP: According to a number of observers some proposals would actually mean more regulation on tech industry at the expense of their capability to innovate and invest. Are these fears justified?
JL: We believe that these fears are unjustified. We do not want to undermine the way the digital economy operates. Our proposals are balanced: they allow enough flexibility without adding more regulatory burdens. Take the example of digital platforms. The commission has concluded that it wouldn’t be judicious to have a horizontal regulation on platforms because they are way too diversified. Hence, we are opting for a problem-driven approach.
That is, once a problem is identified and clearly defined, we might act through regulation or opting for self-regulation initiatives. We’ve already applied this approach on the issue of hate speech on digital platforms. That doesn’t mean that existing rules on certain areas like platform content, transparency or the issue of the so-called value gap will not be further clarified within the DSM initiatives.
We aim to simplify the environment for tech industry in Europe. This is what we do by harmonising rules in different areas. For example, one clear set of rules for consumer protection in the EU, rather than a patchwork of 28 different national regimes, makes it easier for businesses to grow across borders. In the end, this is actually about less rules and better regulation.
TDP:What are the key elements or the strategy to fix the EU-US digital divide?
JL: First, reducing the regulatory fragmentation. That is the key issue that differentiates the European market from the US. Second: access to finance for our tech industry. We have set out an agenda, which will reduce fragmentation and bring down the barriers for businesses opening to them a market of 500 millions customers.
TDP:Businesses in the United Kingdom and other countries are concerned about the cross-border tax system. How the Commission intends to modernise the VAT for digital products?
JL: There is a difference if a business has to deal with 28 taxation authorities or only one. What we want to ensure is that, especially small and medium size businesses when they do business across the borders will only deal with their own tax authority and the rest is taken care of by tax authorities between member states. The commission in its digital single market strategy has already highlighted the fact that in the area of e-commerce we need a taxation threshold to protect the smallest businesses. We will act upon this with our proposals that are forthcoming in December.
TDP: The upcoming revision of EU telecoms framework will revolve around the usual dilemma, more deregulation versus more competition. How do you strike that balance?
JL: That’s a good question. Telecoms operators are right when they say they face regulatory burdens that new players do not. It is our job to determine whether we can reduce the regulatory burden to all and whether there are still any areas where we need to make sure that all the players that provide same services also abide by the same rules. I think the answer is a bit of both approaches.
TDP: What are the plans of the commission with respect to industry 4.0?
JL: The plan that the Commission published last month includes issues like standardisation and interoperability as well as measures to boost Cloud Computing and Big Data technologies in Europe. The proposal is also designed to help digital public services to inter-connect with each other across borders so that businesses, if they want to do business across the borders, can do it easily without having to submit the same information to different public authorities.
The plan also links up to the forthcoming initiatives on the free flow of data. It is also very important that the revision of the telecoms framework touch upon the issue of spectrum, which is a commodity increasingly needed by the industry for the internet of things or self-driving cars for example. All in all, Industry 4.0 relates to all DSM initiatives.
This is the first of a series of interviews held during the conference "Digital Single Market: Bridging the Gap" organized by the British Chamber of Commerce in Belgium. The event featured keynote speeches from Commissioner Oettinger and Robert Madelin (EPSC). Other speakers included senior EU officials, parliamentarians, trade bodies and business leaders who discussed the future challenges for business in the areas of fintech, e-health and industry 4.0.
Picture credits: Metropolitan Transportation Authority
Commissioner for Digital Economy Günther Oettinger keynoted the “Digital Single Market: Bridging the gap” event organized on May 3rd by the British Chamber of Commerce in Belgium. Here are 4 highlights from his speech you need to be aware of.
Still lagging behind…
Europe has a number of competences and success stories in the tech sector, but it is still lagging far behind. Take creative online platforms, applications, social networks, new services: Almost nothing of these comes from Europe. The continent is not really in a good shape. We have to reverse this situation.
Digital Single Market now
Since decades we have created a common European market in a wide spectrum of sectors, giving a clear advantage to our industries in the context of the biggest market in world. There is no argument whatsoever against enlarging the benefits of the common market to the digital sector. Such benefits are expected to be much bigger if one looks to the markets of Europe’s associated partners such as Ukraine or Turkey. Fixing the regulatory fragmentation is the key issue: we do not need 28 national silos. In this respect, the general data protection regulation adopted a few months ago is the example to be followed.
A gigabyte society
The Digital Single Market cannot come reality without adequate infrastructures. Europe must aim for a gigabyte society if it does not want to fail. In order to make the most of booming sectors such as development of Internet of Things, machine-to-machine, or e–health, Europe cannot keep leveraging on 30 Mbps or 100 Mbps forever. It should start thinking of networks capable of reaching speeds of 500mbps or higher.
Europe is still grappling with two types of digital divide. The first concerns the connectivity gap between rural and metropolitan areas, which in turn requires more comprehensive investment strategies in digital infrastructures. The second lies between European citizens with digital skills and those who lack technological education. Member states should give more priority to the digital education of their citizens: the European Commission will step up its efforts to help them set up related policies on digital skills.
Beside Mr Oettinger, the conference "Digital Single Market: Bridging the Gap" featured keynote speeches from Juhan Lepassaar, Head of Cabinet to Andrus Ansip, and Robert Madelin (EPSC). Other speakers included senior EU officials, parliamentarians, trade bodies and business leaders who discussed the future challenges for business in the areas of fintech, e-health and industry 4.0.
Picture credits: Sergiu Bacioiu
If governments resort to brokering individual tax deals, such as the recent UK’s tax deal with Google, we end up with a race to the bottom that ultimately would be damaging our digital economy, says Lib-Dem MEP Catherine Bearder. Brexit? Complete economic lunacy.
What is the added value to the Digital Single Market that the UK might bring if it stays in the EU?
The UK is a world leader in e-commerce, so making it easier for businesses to sell goods and services online across the single market will bring massive benefits to our economy and to British consumers. Leaving the EU now just as we are on the cusp of this digital revolution in Europe would be complete economic lunacy.
What is your opinion about the recent UK’s tax deal with Google?
The UK Chancellor could and should have got a better deal for the UK taxpayer. It is not acceptable that there is one rule for large multinational companies and another for the small businesses paying their taxes and struggling to get by.
Companies like Google make an important contribution to jobs and the economy, but that doesn’t mean they should be able to get away with failing to pay their fair share in tax.
Broadly speaking, what sort of measures should the EU undertake to ensure that multinationals such as Google pay a fair share of tax in each country in which they operate?
The recent EU agreement to introduce greater transparency over tax deals is an important step forward. But what the history of tax deals in Europe shows us that we need a more coordinated approach to ensure accompanies pay their fair share.
If governments resort to brokering individual tax deals, we end up with a race to the bottom. The most important underlying principle should be that tax is paid where the actual economic activity takes place.
This can be a real challenge in the digital sector, but it is one we must overcome if we are to create a level-playing field and a thriving and fair economy.
Picture credits: James Petts
London’s status as the digital capital of Europe would be at risk if we shut the door on the world’s largest market, says the leader of UK Liberal Democrats Tim Farron.
The Digital Post: What are the major dangers the UK might face if it chooses to leave the EU?
Tim Farron: Leaving the EU would damage the UK’s prosperity, security and influence in the world. Our ability to tackle major international challenges like terrorism or climate change depends on us being able to work closely with our neighbours.
As the UK’s most internationalist and outward-looking party, the Liberal Democrats’ position is clear:
[Tweet “Britain is better off in Europe and Europe is better off with Britain in it.”]
The Digital Post: What Brexit would mean for the thriving UK tech sector? How leaving the EU could affect this industry?
TF: Brexit would be a disaster for the UK’s tech sector. Almost nine in ten firms in the tech sector oppose leaving the EU. The ability to recruit skilled people easily from across the continent is hugely important. Many tech start-ups in the UK have been set up by people from around Europe, driving growth and creating new jobs in our economy.
London’s status as the digital capital of Europe would be at risk if we shut the door on the world’s largest market.
The Digital Post: David Cameron’s policy on immigration has drawn criticism from the UK tech industry given that this latter is highly dependent on foreign talents. What is your opinion?
TF: I see immigration as a blessing, not a curse. Since the turn of the century, immigration has added £20 billion to the UK economy. The Conservative Government must also stop sending mixed messages to the world’s entrepreneurs. Our country thrives when we are open to the world and welcome those who want to work hard, pay into the system and contribute to our economy and society.
photo credits: Boston Public Library
The Digital Single Market is not about bits-and-bytes, not about technologies, not about virtual media. It is about the people, it is about the citizens, it is about the jobs, quality of life and civic participation. Therefore it is important to look into the role of regions and cities in making the Digital Single Market work for Europe.
Our task is to boost digital skills, learning across society and the creation of innovative start-ups. We need to ensure digital literacy and skills for citizens, workers and jobseekers. This also includes the need to imbed digital technologies in education in order to prepare the future generations. We are looking forward to the European Commission’s New Skills Agenda 2016, which promises the promotion of life-long investment in people.
Not only is it enough to have local and regional authorities involved, we must engage our citizens and business to co-create and develop regions and cities together with all stakeholders, if we want to be successful and create thriving entrepreneurial ecosystems in our regions. Public sector, universities, schools, and the private sector all have to actively participate.
The main task of the European Committee of the Regions is to create a “bridge” between the policies and actions. In Europe, we need to connect to digital world in our everyday life in schools, universities, civic organisations and companies. Broadband connectivity in all regions, including remote and rural areas, is a prerequisite for this. The European Commission should report regularly on progress made in overcoming the digital divide, particularly at regional and local level.
Poor profitability means that in the rural areas there is often no market-driven development of high-speed broadband networks, so that the support options at European and national level need to be consistently further developed.
We need to engage cities and regions to invest in digitalisation and broadband connectivity and to use different financing including innovative public procurement and other funds. Here partnering is key to create growth and boost European economies.
In addition, we must continue to promote synergies between different programmes and financing instruments like EU structural funds and Horizon 2020 and European Fund for Strategic Investments (EFSI), and promote European multi-financing and integrated European funding in order to support cities and regions to reap the full benefits from the Digital Single Market. Cross-border, transnational and inter-regional cooperation are also crucial to exchange the best practices between regions.
Entrepreneurship is one of the strongest drivers of growth and job creation. Digital and web entrepreneurship in particular have the potential to boost the economic recovery of Europe. Cities and regions can create a favourable climate for innovations through their interaction with citizens, universities, civic society and local businesses. They have a pivotal role in creating a friendly environment for public and private investments and necessary conditions for the strong startup ecosystems.
In my own city, Espoo, I have participated in the creation of several initiatives to promote innovation and entrepreneurship, such as Aalto University, Startup Sauna, Urban Mill, and the Espoo Innovation Garden.
Investing in entrepreneurial culture and entrepreneurship education is an investment in the future. We have to make sure that promising entrepreneurs can obtain the funding they need to start a business. We have to cut down the regulatory burden our entrepreneurs face. We have to support start-ups that are ready to grow and internationalise, and we should also equip entrepreneurs with the necessary skills to successfully start and run a business.
The CoR is promoting entrepreneurship in Europe’s regions via the European Entrepreneurial Region (EER) awards, created in 2009. EER regions provide us with living examples that illustrate what regions and cities can do to promote entrepreneurship education.
One of the very first EER winners was Kerry County in South-Western coast of Ireland. The County has focused on the early stages of educating future entrepreneurs via Junior Entrepreneur Programme, which introduces entrepreneurship in schools for pupils from 8 to 12 years. The programme has been so successful that it was adopted nation-wide, with 10.000 pupils participating in 2015.
Along with digital divide, we should address the question of innovation divide in Europe. Particularly in rural regions, the public sector is a driver for change and a key player in raising local awareness. There should be a focus on innovation in the public sector itself, as well as on rethinking management processes in public institutions. This will enable these regions to catch up.
Commissioner Carlos Moedas highlighted in the CoR plenary session the new role of cities as the new global powerhouses for progress and societal innovation. Cities create favourable conditions for urban innovation – the synergic interaction between universities, civic society, local and international businesses as well as citizens. This is why we must renew the Urban Agenda to include the Digital Single Market, entrepreneurial spirit and human smart city initiatives.
Picture credits: Danka & Peter
On Tuesday European Parliament will vote its position on the Digital Market Strategy (DSM). The raportuer for the text, MEP Kaja Kallas, explains what the legislative assembly is asking the Commission: i.e. more pro-innovation policies, more support to the sharing economy, less digital portectionism.
The Digital Post: What are the main requests laid out in the EP position on the DSM?
Kaja Kallas: The most important aspect of this report is its overarching strong support for innovation- friendly policies and its pro-innovation tone, especially with regard to online platforms. To point out some more specific paragraphs, I would emphasize the digital transformation plan and the big data review which aims to remove barriers to promote innovation in the data driven sector.
TDP: What are the actions, if any, stated in the DSM that the EP would like to be tweaked or on which it has some doubts?
KK: The EP report is sceptical of the Commission’s approach when it comes to platforms and is somewhat critical of the consultation which had leading questions in it. We are not sure if the outcome is the result of open questions or whether it is based on the ones that were a bit leading.
The EP’s report clarifies things that the DSM strategy does not. For example, it is clearly against consolidation in the telecoms sector. Also, the once only principle to be applied in public administration (so not just a pilot project) is brought in, and it goes beyond the strategy on things that we felt were necessary to cover in the report (sharing economy and the digital transformation of the industry for instance).
TDP: How the EP position is supporting sharing economy, as you have stated?
KK: The report shows strong support for the sharing economy and calls for the removal of artificial barriers which hinder its growth. This will enable us to reap the benefits of the digital market and create new opportunities for businesses, citizens, public bodies and consumers.
The report even states that employment laws should be updated to allow new flexible forms of employment to emerge.
TDP: What do you think of the approach of the Commission as regards online platforms?
KK: The consultation launched by the Commission seems to have been more focused on calming down the voices in some member states asking for protectionist measures against American companies.
There is nothing wrong with investigating whether there are problems, but the questions we pose should be open ended and aimed at really understanding the problems. This should not be about protectionism.
photo credit: Dan Mason
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
Hanover’s recent TechFast roundtable on the role of online platforms brought together stakeholders and key policy makers to exchange views on this topic. Here are the highlights.
The overarching theme of the EU’s Digital Single Market initiative is how to make Europe more digitally innovative and competitive globally.
It is one of the favourite topics of discussion in Brussels, and since the launch of a consultation in September, the conversation about “online platforms” has taken centre stage.
Hanover’s recent TechFast debate on the role of online platforms brought together stakeholders and key policy makers to exchange views on this topic.
The discussion kicked-off with the question of how to define an online platform. The definition of platform in the consultation is very broad. It’s a catch-all one, potentially including everything from search engines such as Google, eCommerce marketplaces like Amazon, social networks à la Facebook and collaborative sharing economies, with Uber a recent hot topic.
It emerged that the European Commission and Parliament are themselves trying to get a grasp on these many types of platforms, with the goal of finding the appropriate definition.
The intentions and political driving forces are equally numerous: more transparency for consumers, preventing anti-competitive market dominance, stimulating growth and jobs, and preserving innovation.
It emerged from the discussion that the role of platforms as a market for data is a key focus point, as it raises questions on what information is gathered, how it is used, and if it can be transferred when switching platforms.
Concerns, such as trust and security also ring loudly in light of recent terrorist attacks and cybercrime case
Another underlying whisper, if not outright public statement, is the fear that Europe is lagging behind the USA and, soon, China. Participants agreed that the EU has many success stories in the eCommerce and video game sectors with the potential to compete globally.
Creating the right conditions for these unicorns to rise and for start-ups to scale up should be one of the ultimate outcomes of any policy intervention. Europe cannot lose this momentum and policy makers should duly take it into consideration when thinking of the right approach to platforms.
On top of all of this, the tech sector innovates fast and can be difficult to predict. Years of drafting and implementing regulation or legislative rules risk stifling this growth and innovation and compliance costs would hit newcomers and start-ups the hardest.
Meanwhile, ex-post enforcement, such as an antitrust investigation, can be more targeted, acting only when problems arise, but such cases have proven to be notoriously complex and sluggish to resolve.
With regulatory solutions likely to take quite some time, firms, young and old, will continue to innovate and develop ways to bring content to the market.
Consumers often make happy use of the convenience of platforms and they have proven to be a boon for many businesses, start-ups and citizens, enabling a rapid growth of online trading, sharing and interaction across borders.
The challenge ahead for policy makers therefore is to strike the right balance of all interests at stake. Neither a fragmented nor an over-regulated EU market will benefit anyone, as MEP Dita Charanzova made clear in the interview given to The Digital Post at the TechFast session.
A word of advice, follow the motto of Commission President Jean-Claude Juncker: “No time for business as usual”.
See more at: http://bit.ly/1QvZRyJ
photo credit: erik forsberg
In a few years e-skills would be considered “life skills” and digital competence will be a defining factor for professional accomplishment. So, why not investing in developing digital skills along with entrepreneurial skills from as early stage as primary school?
‘The web as I envisaged it – we have not seen it yet. The future is still so much bigger than the past’. These are the words of Tim Barners-Lee, creator of the World Wide Web and the person ultimately responsible for all the cat pictures in your life.
It takes a remarkable lack of imagination not to realise that, where technology is concerned, the world we live in today is but a enticing preview of what’s to come in ten, twenty or fifty years’ time. Unlike past generations, who have had to sit in their analogue reality and fantasise about the unattainable and distant future of Star Wars, we have the opportunity to live technological advancement and breakthrough in real time – and to make the smart choice of embracing it before it is too late.
Given the urgent, relentless digitalisation of every aspects of our lives, it is not unreasonable to view e-skills and digital literacy as the defining competencies of tomorrow’s labour market. The Digital Age has and continues to alter the global business landscape beyond recognition – entrepreneurship now goes hand in hand with media and technological savvy, a process that’s likely to accelerate if anything, and any entrepreneur who wants to succeed in this new climate has to be able to adapt and change as they go along. The days of business as usual are well and truly over.
And what is entrepreneurship, in its broader sense, if not the ability to turn ideas into actions? It is not only the main driver of economic growth and job creation but, in the case of social entrepreneurship – of social cohesion and sustainability, boosting the economy while tackling societal issues on a regional, national or even worldwide scale. Digital technology is the single most powerful tool we have ever had at our disposal it is exciting to see a new generation of social
entrepreneurs use it in imaginative ways to, quite literally, change the world.
So why not invest in developing those vital digital and entrepreneurial skills as early as primary school? A new report by the Digital Skills Committee in the UK suggests that while embedding digital learning throughout the education system is a great long-term solution, “there is also a clear need to enhance digital capabilities in the shorter term.”
European leaders are slowly but surely coming to terms with the importance of ensuring the next generation of entrepreneurs are well-versed in ICT and able to fully employ the potential of the digital world to shape the world around them. By introducing its Digital Skills Policy and the Grand Coalition for Digital Jobs, the European Commission is aiming to support and encourage stakeholders to make better use of European funding to address the digital skills deficit.
Europe faces a number of serious challenges that are only to be overcome by an innovative, digitally savvy and entrepreneurial society; by people who, regardless of their profession or background, have the curiosity and drive to think in new ways, as well as the fortitude to stand up for and work towards what they believe is right. There is no single universal solution to the issues we are confronted with today, but having a shared vision and investing time, effort and resources in building a strong e-skills and entrepreneurial capacity in the next generation is a huge step in the right direction. Pictures of cats will always follow.
photo credit: Marc Biarnès
Platforms will be a major driving force for the economic growth in Europe and that’s why we have to show common sense when it comes to legislating on them, argues Czech MEP Dita Charanzová in a interview with The Digital Post on the sidelines of the TechFast session at Hanover Brussels.
How do you see the role of the European Parliament in the current debate about platform regulation?
Is regulation needed to address the dominant position of some platforms, i.e. to level the playingfield in the digital sphere?
How the EU can protect consumers without hurting the European startup ecosystem through over-regulation?
What are the right policies to help the European tech sector to compete with its US counterparts?
photo credit: daliscar1
Geo-blocking implies restrictions on competition in the single market and creates an incentive for consumers to turn to unauthorised sources of copyrighted materials. So why the European Commission is back-pedalling on the commitment to suppress it?
Those of you who have read the recently leaked version of the European Commission’s communication on copyright (due for publication in December 2015) must have been surprised by the absence of the word ‘geo-blocking’.
We all remember that peculiar promotional video ahead of the publication of the Digital Single Market strategy, when Vice-President Ansip disappointingly could not watch the Dutch documentary forwarded to him by First Vice-President Timmermans because of ‘geo-blocking’.
Where has all this initial excitement gone?
We will not speculate on the reasons behind this lapse, but it remains an indisputable fact that restrictions on cross-border access to audiovisual content are a common practice, and that not all European consumers are equally able to access online audiovisual services in their home countries.
Perhaps the first example that comes to mind is Netflix, and our first question is: why should a Lithuanian consumer be prevented from accessing the French or English services of this very popular US media company?
However, geo-blocking is not a Netflix problem: it is a single market problem.
A problem with two facets:
Firstly, geo-blocking implies restrictions on competition in the single market, caused by the fragmentation stemming from the licensing models prevalent in the physical world. These models are in turn (en)forced in the online environment through technical and contractual measures.
And secondly, geo-blocking has a negative impact on the development of quality and affordable offers, thus creating an incentive for consumers to turn to unauthorised sources of copyrighted materials.
We will briefly take a look at these two issues.
1. A competitive single market for audiovisual content
A few months ago, when the Rugby World Cup 2015 kicked off, BEUC wrote a letter to the European Commission concerning exclusive licensing agreements between Rugby World, the organiser of the tournament, and local broadcasters of the matches.
This case raised questions as to why consumers in some EU countries are forced to purchase a cable or satellite subscription to watch the matches, often paying for a premium package, rather than being able to simply enjoy the tournament through the on-demand online services of distributors in other countries.
A similar question arose when the European Court of Justice delivered its landmark ruling in the Premier League case (C-403/08).
The Court considered that exclusive territorial clauses in sport broadcasting contracts could amount to restricting competition in the single market.
This decision plays a very important role in the evolution of the current debate, which juxtaposes the freedom to contract (or to license) under copyright law with the principles of non-discrimination and competition in the single market.
The objective of Article 101 of the TFEU, upon which the ECJ based its decision, is to make the single market a reality for EU citizens by bringing down the artificial walls that restrict competition and reduce consumer choice with the sole purpose of maximising profits.
We have also seen the impact of (absolute) exclusive territorial clauses in the pay-TV sector, for example. Consumers in many countries are not satisfied with the offers that are available locally, but it is not possible for them to subscribe to an online IPTV provider established in a different member state.
This is why BEUC decided to intervene as a third interested party in DG Competition’s ongoing antitrust investigation on cross-border pay-TV services (case AT.40023).
2. A pre-condition for tackling piracy is the provision of quality legal offers to consumers
The second aspect to consider within the geo-blocking debate is the impact of this practice on the availability of legal offers for consumers.
According to a recent study by the European Observatory on Infringements of Intellectual Property Rights, 80 per cent of consumers – unsurprisingly – preferred affordable legal offers to downloading from unauthorised sources. BEUC’s members also confirm this preference.
For example, the ‘España no es Pirata’ campaign by our Spanish member OCU discovered that only 6 per cent of surveyed consumers would not pay for a movie that is still in the cinemas, and only 8 per cent said that they would not pay for a movie that was released last year.
The music sector provides a good example of how addressing consumers’ expectations could help to reduce unauthorised downloading.
Data provided by one music industry showed that the introduction of streaming music offers in Norway has “virtually eliminated piracy” there.
Of course, the music industry is different from the audiovisual sector. The issue of cross-border licensing of music has already been addressed with the harmonisation of multi-territorial licensing, a path that has not been followed by the audiovisual sector.
Both industries plead for stronger enforcement policies to tackle copyright infringements. This was to some extent echoed by the European Commission, first in the 2014 IPR enforcement action plan, and more recently in the Digital Single Market strategy through the so-called ‘follow-the-money’ approach.
However, when discussing copyright enforcement, it is important to consider – as rightly stated in the leaked communication – that many consumers do not have access to affordable and quality legal offers in their countries.
This is because there is currently a two-tier single market in the EU: countries where consumers have access to quality audiovisual online services, and countries where they simply don’t.
This fundamental inconsistency must be seriously addressed through a combination of measures. First of all, by tackling geo-blocking in order to allow consumers to seek legal offers across the EU, especially when such offers are not available domestically. And secondly, by creating incentives for the development of audiovisual services in each member state.
At first these two measures may seem incompatible: why tackle geo-blocking if ultimately what we want to do is develop local services?
We need both approaches for a simple reason: it will never be possible to ensure that all audiovisual content is licensed in all member states’ territories.
As we want to maintain Europe’s cultural diversity, it is important to allow right holders to sell their contents across member states, adding value to domestic offers through local adaptations and competitive content aggregators.
But, this does not imply that consumers should be confined exclusively to the offers available in their own countries.
Will ‘portability’ improve the situation?
In December, the European Commission will also come out with a ‘portability’ proposal. However, portability is not the same as cross-border access.
The aim of the Commission’s proposal is to allow consumers who have legally bought a subscription to a streaming or on-demand music or film service to access that content when travelling – or even temporally living – abroad.
Ultimately, this proposal is directed mainly at consumers who already have access to online local content, so there will be a de facto exclusion for consumers living in member states where online offers are not yet developed.
In any event, although this proposal is important and urgently needed from a consumer perspective, we must bear in mind that it is just one piece of the copyright jigsaw puzzle.
What is the solution? Can copyright and competition law be reconciled?
BEUC’s suggestion for solving the problem of geo-blocking in the online environment combines existing copyright rules for satellite services in the Satellite and Cable Directive with the well-known concept of ‘passive sales’ of EU competition law.
We provided details about how to address this issue in our response to the public consultation on the review of this Directive. In a nutshell: this regulatory solution would consist of extending the existing model applied to satellite services (the so-called ‘country of origin principle’) to cover the online distribution of content.
This would imply that an online distributor should not be able to refuse a consumer who tries to access an online audiovisual service from another member state on the grounds of contractual territorial exclusivity.
Such a reform would indeed require the adaptation of current contractual practices between right holders and local distributors of online services. However, the potential negative outcomes on the creative sector should not be overstated, for the following reasons:
– The extension of the country of origin principle to online distribution will not prevent right holders from selling their content on a country-by-country basis. This is because local content adaptation will be still necessary for consumers who want to watch content with local subtitles or in their local language.
– The extension of the country of origin principle to online distribution does not need to result in a pan-European licensing system. It is important to clarify that the aim of this exercise is to prevent consumers from being blocked when trying to access online content from another member state. Thus, the objective is to prevent contractual and technical restrictions to ‘passive sales’, rather than to provide a means for distributors to target consumers outside of their territory of exclusivity.
– The extension of the country of origin principle to online distribution will not affect Europe’s cultural and linguistic diversity. The claim that consumers who are able to purchase the audiovisual content they want from across Europe will stop consuming local audiovisual services is unfounded. Recent data reveals that consumption patterns in traditional distribution channels like cinema remain stable, and that local television is still the most used medium for watching audiovisual content.
On the contrary, Europe’s cultural diversity will be strengthened because consumers will be able to discover other European cultures through just one click. 70 per cent of the European market is already dominated by Hollywood productions, and one of the structural weaknesses of the film industries in Europe is the difficulty in reaching a broader audience beyond national borders. Thus, addressing geo-blocking will be an important step in bringing European productions closer to consumers across the EU.
To conclude: In the forthcoming copyright communication we will see whether the Commission is willing to put a stop to geo-blocking in the digital environment.
We know that a solution is possible, and that the required surgical intervention in the copyright framework is much smaller than widely believed.
There is still a great deal of resistance to be faced, and many questions to be answered but, like Al Pacino said in his inspirational speech in Any Given Sunday, “inch by inch, play by play” we will get there.
While the European Parliament is due to adopt a report outlining legislation plans for civil use of drones, the European Aviation Safety Agency is looking to alleviate the bureaucratic burden for the operators.
International civil aviation has been built on the basis of the Chicago Convention (1944) among whose cornerstones one may notice Article 31 (all aircraft need a certificate of airworthiness (CofA) issued by the aviation authority) and Article 32 (each pilot needs a valid licence).
These two dogmas stood for decades, but today the fact is that we have thousands of small drones flying around without CofA and piloted by skilled remote pilots, who however do not hold a formal licence issued by the authority.
This situation is not illegal. On the contrary, several States in the world have promulgated rules which allow to authorise the operator (e.g. if the drone is less than 25 kg) to carry out commercial specialised operations (alias aerial work) in the absence of formal CofA and pilot licence. This is the case for France, Germany, Italy, UK and several other States around the world.
In the European Union (EU) civil drones above 150 kg are subject to current EASA rules and therefore to an impressive amount of paperwork: type certification of the design; individual certificate of airworthiness (CofA) for each produced drone; pilot licence and medical certificate; licence of certifying staff for maintenance; approval of organisations involved in design, in production, in maintenance, in operations and in training of licensed professions; approval of major changes by EASA and few more.
The “Riga declaration” signed by the political EU authorities at the maximum level last March, envisaged the possibility of extending the mandate of EASA to drones of any mass, but based on “proportionate” rules.
It is clear in fact that a small drone of few kilos, operated at few metres above the ground in the countryside has little possibility of causing a catastrophe. On the other side is equally clear that the terrific amount of paperwork summarised above would be unbearable for small and medium-sized enterprises (SMEs).
But what does “proportionality” means? Sometimes I say, in non-bureaucratic but expressive terms, that proportionality means: “neither kill humans … nor SMEs”.
So the major aviation safety regulators around the world, in 2015 began to think seriously whether the historical dogmas, and associated long list of official papers issued by the aviation authorities, should be maintained or not for small unmanned aircraft.
In February the USA Federal Aviation Administration (FAA) published a Notice of Proposed Rulemaking (NPRM) to allow drones of less than 25 kg to fly without CofA. In March, immediately after the Riga Declaration” EASA published a “Concept of Operations”, proposing three categories:
– “open” (low risk for society and no official papers issued by the aviation authority);
– “specific” (medium risk and only one mandatory paper from the authority: the operational authorisation or operator certificate);
– “certified” (high risk and the long list of certificates and approvals normally required for commercial aviation).
These ideas seem to be supported by the TRAN Committee of the European Parliament which has drafted a motion to urge the Commission to propose EU legislation for drones, including small ones, of course based on said principle of “proportionality”.
….but: do the citizens agree? Now they have the opportunity to express their opinions, since anyone can comment on the Advanced EASA Notice of Proposed Amendment (NPA) 2015-10, open for comments until 25 September, and which indeed develops more detailed proposals for the three categories, in preparation of the future EU legislation on the matter.
I would therefore urge all involved stakeholders to consult this A-NPA and to possibly comment. This A-NPA could lead to a proposal to amend the Basic EASA Regulation (EU 216/2008) and announces that, subsequently, EASA will propose implementing rules, while standard making bodies (e.g. EUROCAE) will develop industry standards.
The A-NPA states that one issue is the “huge number of drones: the production rate of small drones is simply unprecedented in aviation. In 2014, the two main manufacturers of small drones have produced around 1 million drones and they plan to produce the double in 2015. Such numbers go beyond the current NAA or Agency certification capacity”.
True. But hence to protect society we need more resources to oversee this emerging segment of industry. It is very unlikely that States will assign additional resources to aviation authorities to cope with drones; but additional resources could be provided by the market, through “qualified entities” (QEs), if only industry and operators were allowed to contract them.
Today Art, 13 of the Basic Regulation allows QEs to be contracted only by authorities. I guess it should be amended to allow QEs, once accredited by the authority, to stay on the market and support collective safety though independent assessments.
The most controversial point may be the “open” category, subject to no formal approval, but subject to a DG-GROW Directive on the safety of products, addressing manufacturers, but also importers of e.g. Chinese products.
The Directive would contain not only essential requirements, but also the obligation for the vendor to clearly inform buyers on the operational limitations (e.g. not above 50 m of height). An operator going beyond such limitations would be illegal and enforcement mainly delegated to police and not to the aviation authority.
This approach is not necessarily unsafe, providing the thresholds of the category are wisely set and the operational limitations as well. And especially if insurers and QEs would de facto impose market rules, beyond legal obligations. But it is definitely a very novel approach for the aviation community: I am sure that it will attract a lot of comments.
Picture credits: dronesurvivalguide.org
There is no argument that the legal framework protecting copyright needs an update for the information age. The new Commission’s proposal, which will be launched in the beginning of 2016, should strike a balance between the interests of service users, distributors and copyright holders, and make sure that Europe’s cultural landscape remain innovative while artists receive due compensation for their work.
Do you remember the time, not so long ago, when one would jab a pencil or a pen in, manually rewinding cassette tapes to save a little battery power? Or how some of us would spend hours compiling and copying mixtapes of our favourite songs to share with friends and loved ones?
Many among us don’t. They have grown up with the privilege of access to digital files, to music and news freely available on all of their devices, all of the time. They have no concept of the long path we’ve travelled to get where we are today.
Copying data is a simple process these days – it takes literally a few seconds. Roughly 130 000 video clips are being uploaded to YouTube any moment and online content is being generated by over 83 million users a day in the EU alone. And that’s with the so-called ‘app’ economy still firmly in its infancy.
It is a fundamentally different world to the one we know from 2001, when the EU Copyright Directive was first introduced. There is no argument that the legal framework protecting copyright needs an update for the information age, and this is exactly what the European Commission’s most recent proposal for a EU-wide digital single market strives to achieve.
The Commission’s proposal will be launched in the beginning of 2016 and it is the own-initiative report by German MEP Julia Reda (Green/EFA) that will be voted on during July’s plenary that is giving important insight of what the future of EU copyright might look like.
The forthcoming legislation should aim at three priorities. Firstly, it should strike a balance between the interests of service users, distributors and copyright holders.
Secondly, it should reflect the fact that in 2015 it is the ‘service user’ that plays the key role in shaping the digital single market.
Thirdly, we should not forget that it is through the creation of value that Europe’s cultural landscape continues to develop and diversify, and it is our duty to ensure it has the means and space to remain innovative, and that artists receive due reward and compensation for their work.
The rapid expansion of information technology now allows for easier, more cost-effective purchases of high-quality music as opposed to illegally downloading inferior pirated files. It is important for users to know what they are paying for and who benefits from the charges.
The European Commission should also play a part in the implementation of its ideas. It has devised several plans of action, one of which – ‘Follow the Money’ – employs a number of different strategies to identify and target pirate companies and the advertisers financing them.
Examples of good practice from the UK and France, where the government is working together with various businesses (including content and internet providers), will be taken on board and scaled up to combat the illegal distribution of intellectual property.
It has been established, for instance, that 90% of those looking for illegal downloads such as movies or music, use mainstream search engines. France is therefore working directly with those companies to find ways to limit access to pirated content and prioritise legal ways of acquiring the requested files.
And yet, progress waits for no (wo)man – the same generation that can still remember cassette tapes, CDs and mp3s, is now being courted into moving on to cloud and streaming services. Replacing local storage and, in fact, the very concept of ownership of digital media, with convenient access to data stored online, is growing increasingly popular.
Streaming companies such as Spotify (for music) or Netflix (for movies) are enjoying rapid growth and development thanks to this new environment.
Their increasingly globalised user base, however, now demands to be allowed to enjoy the service they have paid for regardless of their geographical location, especially within Europe. German football fans, for example, want to be able to watch games from the Bundesliga even when lounging by the pool in Bulgaria, and European legislature and companies’ own policies need to reflect that.
My suggestion would be to concentrate on our aims and on the challenges we face in the 21st Century. Europe has the potential to be a leader in the world’s digital makeover – we have some of the most well-educated specialists and relatively high-quality internet access. Disregarding copyright should not be allowed to jeopardise that – instead, intellectual property legislation should serve as a catalyst for innovative ideas.
Last week, we proved that it is possible to have a roaming-free Europe. I am convinced that we can also boost the potential of a digital Europe with a robust and balanced copyright protection.
That way, instead of spending hours rewinding cassette tapes with a pencil, we would soon be driving in automated cars, swaying to our favourite music in expertly-curated mixes.
Photo credits: Yassin Moustahfid
After the Riga Declaration and the report of the TRAN Committee of the European Parliament the question is no longer “if” drones will proliferate in the airspace, but “how” we should regulate the several facets of this new phenomenon.
Around 15 years ago the majority of experts argued that the “invasion” of airspace by drones would have started at altitudes normally populated by traditional aircrafts (e.g. so called MALE around 20,000 feet and HALE between 30,000 and 50,000 feet), thus heavily interfering with traditional jet-liners. Reality has decided to go on a different way.
Today, we see thousand of little drones of very few kilos flying well below 500 ft, and often well below 100 ft, under the command of persons who are sometimes totally new to aviation and have no idea of airspace.
At 100 ft, outside the departure and landing path, there is not much aviation activity except for few emergency services. On the contrary, flying so low is extremely dangerous for manned aviation due to the presence of buildings, trees, chimneys, cranes, cables and other objects.
At the other extreme, above flight level (FL) 600 (= 60,000 feet, alias around 20 km), airspace has been traditionally underused due to material as well as economic obstacles in operating “normal” aircrafts at such altitudes; but now several companies are envisaging a growing number of stratospheric balloons, suborbital commercial rocket propelled aircraft as well as solar powered drones, with several metres of wing span, loitering there for weeks and acting as a communication relay.
ICAO still seems concentrated on commercial freight air transport by unmanned aircraft, in the range of altitudes commonly used by traditional jet-liners. In the EU the institutions are becoming increasingly aware that instead the priority is to regulate the safety, security, privacy and insurance of the “new comers” below 500 ft and above FL 600.
The involved operators are in fact entities that very often have no previous aviation experience (a young man treating the drone as a “toy” as well as companies like Google, with more experience in telecommunications and computers than flying aircraft). The challenge to the aviation authorities is thus enormous.
The five principles of the Riga Declaration adopted in March this year highlighted that for this new segment of aviation rules have to be “proportionate” (i.e. it is neither thinkable nor necessary that a surveyor using professionally a small drone should be submerged by the amount of regulatory paperwork that we see in a commercial airline) but they should be developed “now”, since the airspace is already “invaded” by drones and regulators are lagging behind technology.
Furthermore key elements are the public acceptance (which beyond safety, includes at least privacy and security) and the central role of the “operator”, which is not the remote pilot, but the company employing the pilot.
The abovementioned points are emphasized in the draft report of the TRAN Committee of the European Parliament (EP) on the matter, chaired by Jacqueline Foster.
Such a report reminded that today the EU is the world leader for the use of small drones, which highlights the necessity to use the so-called “operation centric” approach (i.e. in order to maintain safety the focus is on the operator, i.e. its organisation and its ability to respect some limitations, not on the reliability of the technical system as in the traditional aviation approach).
The EP welcomes the development of sports and recreational RPAS (Remotely Piloted Aircraft Systems) but calls for a clear, globally harmonised and proportionate regulatory framework in the EU (i.e. below 150 kg).
The Parliament also considers that rules at EU and national level should clearly indicate the provisions applicable to RPAS in relation to the internal market and international commerce (production, sale, purchase, trade and use of RPAS); this means that in what EASA calls the “open” category, there could be no aviation administrative processes, but obligations for the vendors to inform customers on the operational limitations applicable to their drone.
This is in itself a major revolution in the regulatory approach to aviation.
Furthermore the EP believes also that privacy, data protection and any other applicable law, such as criminal, intellectual property, aviation and environmental law, should be specified in a notice for purchasers.
The hard point is now removing the limit of 150 kg for the EASA competence. It is clear that just lowering it to e.g. 30 kg would be ridiculous, since 95% of current operations employ drones of less than 20 kg.
States should therefore make a big step backwards on behalf of the internal market and this is the next major challenge for the EU citizens to overcome. The support obtained so far by the Commission and by the EP is however encouraging.
Photo credit: Sebastian Soldberg
We need to change the paradigm and change the course. A European digital market has to be seen as an immense advantage rather than a threat.
As an active member of the Italian “Internet Bill of Rights” Commission, the Commission that is trying to codify and outline “rules and rights” of the Internet with the intention to make it more open and accessible, I figured out the real debate is not about “rules and rights” but investments in digital, innovation, and in a truly single digital market.
Having a look around on what’s going on in Europe, and not only in Italy, I’m deeply convinced the continent has completely lost the world leadership in mobile technology.
We Europeans created the Global System for Mobile Communications that became a global standard. Right now, unfortunately, we lost that competitiveness; most innovation in information and communications technology comes from the other side of the Atlantic.
And that’s why we don’t have such a vibrant capital market as in America, and at the same time, we don’t create the conditions for our startups to become great corporations.
We need to change the paradigm and change the course. A European digital market has to be seen as an immense advantage rather than a threat. We also don’t need barriers of any kind because such barriers have a habit of outliving their usefulness.
How can we let the next Google, Facebook or Amazon be European and not American? The recent Obama’s statements against Europe don’t help and we need to find our way.
In a continent where there’s an important digital divide between nations, where you can find 28 different data privacy and copyright laws, where U.S. companies are going to remove services in some countries because of their local laws, what are the solutions to bridge the gap and create growth and jobs with innovation?
I guess the only answer possible is going ahead with the Digital Agenda explained by the Digital Commissioner Gunther Oettinger. Everybody right now is focused on Net Neutrality and the openness of the Internet, but Europe’s Internet is already open.
If you want to take your business online today, you can. We must not follow the current US approach led by President Obama and FCC. The real point, as ever, is to create the conditions to stimulate investments and entrepreneurship. To create a digital single market with efficient, modern policies across the continent that remove the burdens of becoming the next Google, Facebook or Amazon.
Half of European productivity growth over the past fifteen years was already driven by information and communications technologies and this trend is likely to accelerate. The European Commission identified seven priorities on which the first is creating a “Single Digital Market”.
As Oettinger said in February at the Berlinale “I want Europe to understand the advantages of digitalization. In an age where consumers are spending most of their time online, we should work together to ensure that our creative potential and European diversity are preserved and are accessible for everyone”.
That said, Italy is doing its part and Prime Minister Matteo Renzi pointed out we need to increase the digitalization of our country, beginning from the public administration, and the challenge is not against American telecoms or OTT but to create the right conditions to bring back Europe in the Olympus of the digital innovation.
This column was originally published on E!Sharp
photo credit: Thomas Hawk
Much of what the Commission proposes goes in the right direction although some actions, such as plans to harmonize copyright, could stir controversy. Even US tech giants might be less worried than expected.
On May 6th, more quickly than expected, the European Commission released its much anticipated “Digital Single Market Strategy” (DSM).
The Juncker Commission has made the DSM the top priority of its five-year term, claiming €340 billion in potential economic gains, an exciting figure that should be supported by quantitative research analysis.
Much of what the Commission proposes in the 20-page document seems to go in the right direction, setting out three main areas to be addressed:
– Better access to digital goods and services. The Commission claims that delivery costs for physical goods impede e-commerce, pointing the finger to parcel delivery companies; that many sellers use unjustified geo-blocking to avoid serving customers outside their home market; that copyright needs to be modernized; and that VAT compliance for SMEs should be simplified.
– Creating the right conditions for digital networks and services to flourish by, encouraging investment in infrastructure; replacing national-level management of spectrum with greater coordination at EU level; looking into the behavior of online platforms, including consumer trust and the swift removal of illegal content and personal data management.
– Maximising the growth potential of our European Digital Economy by, encouraging manufacturing to become smarter; fostering standards for interoperability; making the most of cloud computing and of big data, said to be “the goose that laid the golden eggs”; fostering e-services, including those in the public sector; developing digital skills.
It is understandable that the Internet provides a channel for businesses to reach consumers more widely than traditional media, both in their own markets and abroad, and for consumers to have a wider choice and bargain-hunt more effectively.
In a truly single digital market there are opportunities to scale up that are not present in the much smaller national markets.
More controversial are the commission’s plans to harmonize copyright law, in particular its plan to ban “geo-blocking”, the practice of restricting access to online services based upon the user’s geographical location.
However, the most problematic point concerns “platforms”: the digital services, such as Amazon, Google, Facebook, Netflix and iTunes on which all sorts of other services can be built upon and which have come to dominate the internet.
Worried that the mainly American-owned platforms could abuse their market power, the Commission will launch by the end of this year an assessment of their role.
However the fact that most of the 32 internet platforms identified for assessment by the Commission are American and only one (Spotify) is European, hints more towards the fact that it is harder for new firms to scale up rapidly rather than abuse of market power.
What it is interesting is that Mark Zuckerberg doesn’t seem to consider a Digital Single Market a disadvantage for Facebook.
Instead, he supports the idea. Facebook has to deal with different laws in every country and a single set of regulation for the whole European continent would actually make things easier for Facebook.
The digital economy also depends on the availability of reliable, high-speed and affordable fixed and mobile broadband networks throughout Europe. There are no good reasons to still have national telecom laws in this field.
How will Europe successfully deploy 5G without enhanced coordination of spectrum assignments between Member States?
Let us not forget that these networks do not only have an economic value; they are increasingly important for public access to information, freedom of expression, media pluralism, cultural and linguistic diversity.
The following two pieces of legislation are related to the DSM:
– The General Data Protection Regulation (GDPR), replacing the 1998 Directive that generated the data protection regimes of 28 Member States, with a single one, was proposed by the Commission in 2012, has undergone amendments by both the EP and the Council of Ministers and could be adopted in 2015 or 2016.
– The Telecoms Regulation, reviewing the 2002 Telecoms Regulation to cover net neutrality and roaming fees, was proposed by the Commission in 2012, was amended by the EP and is currently with the Council, which has scaled back the EP’s amendments.
The upcoming negotiations on the Telecoms Single Market will give a hint of the challenges to come in creating a Digital Single Market over the next years.
eFacilitators are key actors in providing digital competences for vulnerable people. Getting this profession officially recognised will multiply further formal training and mobility opportunities.
Dr. Bastian Pelka: Co-ordinator of the research unit “Education and Labour in Europe” at Social Research Centre – Central Scientific Institute of Technische Universität Dortmund. His fields of research are digital inclusion, education, occupational orientation, social innovation and ICT for learning and inclusion. He is working on EU level predominantly, engaged in several LLP, FP7 and H2020 projects. He earned his PhD in communication science, holds a position as research council and is senior lecturer at Faculty of Rehabilitation Sciences, lecturing on ICT for vulnerable people.
The European digital single market strategy is largely dependent on the ability and interest of citizens to behave as online consumers. In this regard, a complex issue policy-makers should pay more attention to is the fact that still an 18% of EU population aged 16-74 has never used the internet (EUROSTAT 2015).
Despite the role informal intermediaries like family and friends can play to help the latter profiting from the online market, still a large group of adult citizens are excluded from it – not to say from online education, eHealth, wide parts of the labour market or eGovernment.
The European digital single market needs more digitally competent citizens to succeed.
A comparative analysis of figures across countries shows an unbalanced distribution between Northern/Western and Southern/Eastern countries, evidencing the relevance of regional and national differences.
Indeed, digital exclusion seems to depend socio demographic factors: correlations with socio demographic background of internet users and “offliners” indicate that vulnerable people not only are less active on the web but do also draw less profit from their activities if they are online.
This group of “digitally excluded” persons is largely made up of people aged 65 to 74 years old, people on low incomes, the unemployed and the less educated. On the other hand, the European economy is concerned about the increasing shortage of ICT practitioner skills.
The Digital Agenda Scoreboard (2014) alerts that while “39% of the EU workforce has insufficient digital skills, 14% has no digital skills at all”. This competence gap results in a growing deficit of ICT professional skills, with an estimate of around half million unfilled ICT vacancies today, which could grow to 900,000 by 2020 (Empirica 2015), challenging the EU’s development targets related not only to inclusiveness, but also to innovativeness.
While policy on digital inclusion in the past decade focussed on providing ICT access, remarkable success can be seen in the spread of ICT access throughout Europe.
Cheap digital devices (like smartphones, TV and tablets) and sinking connectivity costs lead to an increasing percentage of Europeans having access to digital means.
The Digital Agenda Scoreboard indicates that those targets related to internet access (broadband subscriptions, regular internet use) will be mostly met by 2015, while targets related to the competence of use (using e-government, using returning forms, buying online) are in danger to be missed.
This raises the question of adequate means to mediate and multiply digital skills.
Accelerating population’s digital skilling requires targeted strategies to multiply and develop the capacities of intermediaries enabling digital learning and empowerment opportunities for all.
A survey study prepared by Telecentre Europe for the European Commission (2014) demonstrated that there are “almost 250,000 eInclusion organizations in the EU27, or an average of one eInclusion organization for every 2,000 inhabitants”.
These institutions, predominantly publicly funded, operate with few employees and small budget – meaning that while the “physical” eInclusion support structure in Europe is widely spread, it consists of small institutions.
These are telecentres and other forms of ICT community centres, public libraries, municipal centres or local NGOs, who are providing digital literacy to excluded groups as well as using ICT to support social inclusion of groups at risk of exclusion.
Among the targeted categories of the population are disengaged youth (e.g. NEETs), long-term unemployed people, domiciliary carers, migrants, or housewives – making the telecentre a space of eInclusion for a broad variety of vulnerable or marginalised groups at risk of digital exclusion.
Telecentres cover the intersection of ICT based learning (for any purpose, such as employability or leisure, lifelong learning or personal development), ICT competences (learning how to use applications, how to surf the web or how to handle a tablet) and community building (local based communities or groups of interest like senior internet cafes or telecentres for migrants).
Half of the surveyed organisations provide employability and a quarter entrepreneurship related services.
They can be categorized by the type of support they offer and the proximity to their target groups. In this respect, a four-level pattern developed for Telecentres in 2010 (but applicable to every eInclusion actor) includes the following categories:
Their local base and pedagogy are aiming at providing a low-threshold environment, empowering vulnerable people to access the digital world. This institutional setting seems a perfect match for targeting the socio economic dimension of the digital gap.
However, there is a constant need for further professionalization of eInclusion actors, as this is a quite new branch of social welfare. Existing institutions, networks, organisations and approaches need further reflection, improvement and recognition in order to expand their impact.
The actual low-threshold space of the telecentre can be regarded as one key ingredient in providing ICT access and competences; the other one is the person that interacts with those seeking ICT access, competences or social activities – such as connecting and collaborating with peers.
People who are disconnected from the digital world today show a multitude of disadvantage features: this group has little option to access the formal education system, so non-formal adult education becomes their unique option (apart from family and friends, i.e. informal learning) to get acquainted with e-skills and digital opportunities.
This makes this target group a multi-faceted disadvantaged group that will need special support on their way to the digital society. Education staff with abilities in dealing with this target group plays key role in providing digital competences.
eFacilitators are key for providing digital competences for vulnerable people, but they are in need of further professionalization.
Recent years have seen a constant rise in requirements for the educational staff working in telecentres. Telecentre staff meets challenges like reduced public funding, new labour market demands for employability concerning ICT qualifications and changing technological systems (tablets, cloud applications, apps).
On the other side, end users are requesting new services (mobile devices, online job searching, certification of competences) and new target groups are entering the digital world and face competence gaps.
These developments lead to an increasing demand in professional training for the educational staff of telecentres. Telecentre Europe (directly or through its members) has been involved in a strand of four EU financed development projects (Lifelong learning programme, 2011-2014) aiming at supporting the professionalization of telecentres, their services and staff.
One of the outcomes was the branding of the profile of the “eFacilitator” as a vocational profile of educational staff for ICT competences in telecentres. But more work has to be done: professionalization has to reach other countries, all levels of staff in telecentres and other welfare organisations that do not understand themselves right now as “telecentres”.
It is difficult to estimate the number of persons working with end users in the field of eInclusion, but taking 250,000 organisations as a basis, it seems safe to argue that around 250,000-375,000 persons in the EU are working on digital competences of disadvantaged persons.
Only tentative research has been done on the socio-demographic characteristics of this field of employment, but it seems to prevail a young, female and highly educated workforce with a high diversity of educational profiles.
This staff can be regarded as persons with high interest in social innovation and strong links between this group and social innovators could be traced through different social entrepreneurship organisations.
This staff is in need of constant training and issues such as means to initiate and sustain fundraising, certification of competences and a regular crew change rate have all to be tackled.
Recent research and development activities are aiming at these issues by developing customized and certifiable curricula for telecentres’ staff.
The aim of this on-going research and development activities is to support and secure professionalization within this new arising working field in order to make it more efficient for end users and more attractive for staff working on Inclusion issue.
Getting the profession officially recognised – either as a stand-alone profile or as specialization of an existing one – tends to multiply further formal training and mobility opportunities.
Employment prospects for e-facilitators stretch beyond telecentres, ranging from advising schools or libraries on digital training to supporting collaboration inside co-working spaces or providing ICT guidance to small business.
While one of the main issues faced by the e-skills mismatch in the IT industry is the limited interest shown by females on IT careers, the eInclusion sector is attracting women on a much higher degree (2 women every 1 man on average).
A window to increase the number of women in IT can be opened if they can experiment the social dimension of IT by acting as e-Facilitator.
The situation described above is calling for a constant development of telecentres as low-threshold specialised providers of ICT competences as a permanent jigsaw piece in providing employment and welfare support in the digital society – either for personal wellbeing or for employability.
With requirements both on the demand side (which competences are needed?) and on the individual side (which restrictions and options do users have?) telecentres are requested to constantly develop their efforts and approaches.
This process calls for a constant professionalization process that cannot be afforded without an extended formal recognition of the eFacilitator professional profile and the engagement of formal education in their preparation.
European and national/regional policy initiatives in this direction would help building a more sustainable, flexible and high quality ICT competence supporting infrastructure, ultimately redounding to the benefit of the Digital Single Market.
A growing movement of innovators in civil society, tech and social entrepreneurs are now developing inspiring digital solutions for a variety of social issues. The European Commission and other public institutions should invest more resources and formulate better policies focused on the emerging field of Digital Social Innovation.
Digital Social Innovation, a relatively new concept
Digital Social Innovation (DSI) is an emerging field, with little existing knowledge on who the digital social innovators are, which organizations, and activities support them and how they use digital tools for social change.
The development of open data infrastructures, knowledge co-creation platforms, wireless sensor networks, decentralized social networking, free software and open hardware, can potentially create the condition to raise awareness and spur collective actions.
A growing movement of innovators in civil society, tech and social entrepreneurs are now developing inspiring digital solutions for a variety of social issues in areas such as health, democracy, consumption, money, transparency, and education. We call this Digital Social Innovation.
However, today it still fails to deliver anticipated solutions to tackle large-scale problems, and the growth of digital services has resulted in an imbalance between the dramatic scale and reach of commercial Internet models and the relative weakness of alternatives, mainly filling marginal niches and unable to gather a critical mass of users that can adopt the services.
The main question is whether digital social innovation can provide fundamentally new forms of power that are capable of tackling large-scale social, and even global crises, while empowering citizens and allowing democratic participation.
DSI organizations and initiatives all over Europe
One of the main results of our just published DSI final report is the identification of more than 1,000 rising examples of digital social innovation all over Europe, and the hidden links among them.
The most promising DSI projects are the ones combining novel technology trends such as open data, open hardware, open networks, and open knowledge in new ways to achieve social impact.
We also have identified key socio-economic trends that we believe will have a bigger impact such as “open democracy”, which means a wider citizen participation in policy making; the “collaborative economy” that is the emergence of new economic models based on knowledge commons and sharing platforms or digital currencies; and “new ways of making” based the open hardware and open manufacturing revolution.
Some exiting DSI projects are collaborative online platforms for network democracy, such as Open Ministry and Your Priorities, part of the European D-CENT project funded within the EU CAPS initiative; Open spending that uses open data to create more transparency about public spending; social networks for those living with chronic health conditions such as Patients like me, or Safecast that has made possible large-scale crowdfunding of environmental sensor data.
These examples show how communities can mobilize collective intelligence, create awareness, promote collective action, and then contribute to meaningful social change.
To make a real difference DSI should be fostered and scaled at EC level, through targeted policies, investments in infrastructures and new financial models for bottom-up innovation.
What are the challenges in the EU for the DSI?
There are many challenges with regard to its governance, technological options, societal impacts including ethical aspects and ownership of data and infrastructure.
The World Wide Web became successful because it was built on a set of royalty-free open standards decided through an inclusive and transparent process. But, despite the founding ethos of technologies like the World Wide Web being aligned to social good, the last 20 years or so have seen the commercialisation of the Internet taking precedence.
A major risk for the Future Internet is the realisation of the “Big Brother” scenario, with increasing concentration of power. Few big industrial players could reinforce their dominant position by implementing platform lock-in strategies, enforcing extensions of copyright and patents, appropriating users data, discriminating network traffic, and carrying out even more pervasive surveillance.
Today Europe risks losing competitiveness in the digital economy and its technological sovereignty, since the main players determining future standards, business models and critical applications in fields such as the Internet of Things or Smart Cities are mainly based outside Europe.
One challenge for Europe is how it might acquire a competitive advantage in digital innovation by developing open, public and distributed infrastructures and experimenting with new economic models that are inclusive and sustainable, based on solidarity and the common good rather than winner-take-all marketplaces whose dominant players set the terms of innovation and competition.
The alternative is to accelerate innovations that align the capacities of the Internet better to social needs, and that decentralise power to citizens and communities.
Distributed and citizen-centric innovation should play a central role in the development of the Future Internet. Furthermore, privacy-aware solutions and encryption should be used by all citizens to regain control over their data, enhance their privacy and digital rights.
What policymakers should do to lend more support to DSI in Europe
DSI has been mainly driven by grassroots social movements, hackers, civil society groups, and social entrepreneurs. Huge sums of public money have supported digital innovation in business, as well as in fields ranging from the military to espionage. But there has been far less systematic support for innovations that use digital technology to address social challenges.
We think there should be a better balance between top down and bottom in the digital transition. The EC and other public institutions should invest more resources and formulate better policies focused on this emerging field. We can suggest 4 main actions for policy makers:
1. Invest in digital technologies for the social good, and promote specific regulatory and funding measures that support non-institutional actors driving innovation in areas such as the collaborative economy, cities and public services; and direct democracy.
2. Make it easier to grow and spread DSI through public procurement, providing support for evidence generation, common standards and integration with public services.
3. Expand the European DSI network and invest in training and skills development
4. Promote open standards, open technology, common frameworks and distributed architectures together with strong digital rights and data protection. This can support the development of an underlying platform with European values and ethics on top of which a digital social innovation ecosystem with applications for the common good could flourish.
photo credit: Nesta
If the latest leaked version is a good indication of where things will come out, there are serious grounds for optimism about the Juncker Commission’s Digital Single Market
As a Brussels veteran, it is tempting to lapse into cynicism when confronted with a new Commission’s policy programme. Recent Commissions have often re-packaged existing policy initiatives and added generous doses of jargon and waffle, guaranteeing under-delivery.
But if the latest leaked version is a good indication of where things will come out, there are serious grounds for optimism about the Juncker Commission’s Digital Single Market strategy.
There are several reasons for this:
First, the Commission’s starting point is exactly right.
In striking an optimistic tone that is positive about Europe’s strengths, assets, and potential (“Europe has the assets to succeed in this global digital economy”), the Commission is allowing space for a shift in mind-set for the many decision makers who have been tempted to associate Europe’s digital prospects with doom and gloom.
It seems to be rejecting the politics of despair and defensive policy options that would simply guarantee Europe’s future as a consumer and importer of foreign digital services and technologies, rather than a producer and exporter – a follower rather than a leader.
Second, the Commission understands the barriers and challenges.
There has been a considerable amount of consultation, both formal and informal, and it looks like the Commission understands many of the key barriers to the digitalisation of the European economy.
It’s very important that the resulting policy initiatives stay focused on achieving the objectives of the DSM, rather than developing some kind of independent existence, or carrying on because they respond to political pressure from one or other interest group.
Just as importantly, it seems to be clear about the landscape of competing interests and to have an idea of where it wants to come out in terms of some of the big debates.
In other words, it looks like there is political will to tackle strong opposition from vested interests. It is to be hoped that this level of ambition can be matched by the Member States and the Parliament – no small challenge in a time of such economic uncertainty.
Third, the Commission understands the importance of evidence and problem definitions.
It’s too often been the case that the Commission has brought together stakeholders to discuss and find solutions to “problems” that are not clearly identified or proven.
This strategy has a welcome emphasis on tackling actual, rather than perceived, problems. It’s good to see that on some of the vaguer concepts like “platform regulation”, it is intending to deepen its understanding of the problems by consulting, and indeed via a sector enquiry.
This is obviously the direction that policy making must take. But it will not only be challenging for the policy makers. It will be just as tough for industry and civil society, which have relied on silver-tongued lobbyists in Brussels for decades.
Fourth, the Commission wants to integrate enforcement of existing rules with the development of new ones.
The launch of the DSM is an early test of the effectiveness of the new Commission structure and working method. Many of the key drivers in the policy debate on the DSM relate to competition and consumer protection.
In deliberately launching both open consultations and formal tools like the proposed e-commerce sector enquiry – policy responsibilities that are held by different Directorates-General, the Commission seems to be delivering on its promise to improve coordination in policy making. The debate on “platform regulation” is the best example.
Although there is considerable political pressure from Paris, Berlin, and Madrid to “do something” about “GAFA” (the playful French acronym for Google, Amazon, Facebook, and Apple), the Commission is rightly giving itself the chance to prove its executive and enforcement credentials, notably in the antitrust area.
Apart from the crucial tests that the Google cases constitute, DG COMP will be given an important opportunity to reinforce its position as the world’s leading antitrust regulator through the launch of a sector enquiry on e-commerce.
This position is one of the biggest achievements of the European Union writ large, and without it, the European project would lose a significant amount of respect among Europeans.
And of course, it’s very important to develop strong ex post enforcement capabilities if the Commission is serious about becoming a modern and digital-friendly government institution. This is because digital markets are so fast-moving that traditional, long-winded legislative processes will no longer be adequate to regulate with.
1. As noted above, the Commission’s starting point is excellent. However, it could go even further and embrace the concept of digital disruption and the value it provides, while noting some of the attendant challenges. The primary source of opposition to a pro-digital agenda like the DSM will come from disrupted industries, and it is important for the Commission to nail its colours to the mast from the start by laying down a challenge to them to modernise.
2. As it prepares a final version of the DSM strategy, we would urge the Commission to consider being explicit about which anti-competitive or anti-digital practices it is targeting, where these have been identified. One example would be some of the specific ways that big brands segment the Internal Market along national lines in order to control prices, to the detriment of SMEs, competition, consumer welfare, and the potential of the DSM. This is not to say that the Commission has to spell out all of its policy plans in detail, especially where these are not yet fully formed or where the evidence base is still missing (e.g. platform regulation). However, where the targets are already clearly defined, the pressure exerted by publicly “outing” them will go a long way. Another excellent reason to take this approach is that it will contribute to a more straight-talking tone. This is preferable to the usual euro-speak because it sounds more honest and dynamic, and because it’s obviously more measurable.
3. It would also be helpful to couple the regulatory agenda with a more explicit de-regulatory push. This is certainly present in the leaked draft, but could be emphasised more clearly. The benefit of emphasising the de-regulatory agenda is that it will provide the carrot that some industry actors need in order to engage more constructively than they might otherwise. Good examples that can be more explicitly enumerated could include the ePrivacy Directive and other rules that apply to the telecoms sector (on SMS, for example, since that will soon be completely overtaken by other messaging services), or aspects of the Audiovisual Media Services Directive, which also contains outdated provisions.
4. Linked to this is the need to take a much closer look at legislative initiatives that are already underway. In particular, versions of the Data Protection Regulation, the Network and Information Security Directive, and the Payments Services Directive being debated by the Parliament or the Council each contain provisions that could seriously undermine the objectives of the DSM. These could be addressed by carrying out impact assessments of texts adopted by one or both legislative institutions.
5. When promoting an investment agenda, the Commission would do well to ensure that investment is promoted up and down the value chain, and not just in infrastructure. This is important because applications and services drive the demand for capacity that is capable of raising consumers’ willingness to pay for Internet access. Too often, telecoms companies have been allowed to get away unchallenged with passing the message that net neutrality is somehow inimical to investment in infrastructure, when the opposite is likely to be the case.
photo credits:Howard Ignatius
What Europe’s tech sector needs is a real pro-growth agenda: bogus antitrust prosecutions against US-based companies will not enhance its ability to innovate and compete — they will only make it more reliant on the whims of bureaucrats.
Last week, as Commissioner Vestager stood at the podium to announce that the EU Commission was finally issuing a Statement of Objections regarding Google’s search practices, long-time commentators of EU competition-policy matters thought back to the infamous Microsoft wars of the early 2000s—not just because it made them feel some ten years younger.
The two cases at hand bear striking similarities: both targeted the most visible company in the computer industry at the time; both were preceded by analogous proceedings in the United States, but ended up following a different path; both focused on extremely sizable market shares, but failed to take into account changes already occurring in the marketplace; and both arguably marked exemplary instances of a politically-oriented approach to the allegedly technical field of competition law.
Indeed, the current Google case seems to rest on shaky foundations—if anything, an investigation that lagged for five years and survived three settlement attempts should be proof of that. According to the Statement, Google favoured its own comparison shopping service at the expense of competing “vertical” services. However, it’s now hard to tell horizontal from vertical search, as they become increasingly intertwined. Long gone is the era when search engines worked as the internet’s yellow pages—and luckily so.
Yesterday, Google’s job was to tell users where they could find answers to their questions; today, Google is in the business of providing them: it looks only natural that those should be Google’s own answers.
But since the Commission launched its investigation, search evolved in another important respect: mobile ate up desktop computer time, apps displaced the browser, the social web did the rest. To be clear, traditional search engines are far from marginal, but they no longer are the primary tools for gathering information, particularly in specialized niches. This applies to Google, as well. For years it’s been said that competition was just a click away: users are now beginning to click away, only in a different direction than expected.
Irrespective of its merits, the case gained momentum over the last few months. In November, the EU Parliament resolution called for the unbundling of search engines. Just days before last week’s Statement of Objections, digital commissioner Oettinger said Europe’s online businesses were “dependent on a few non-EU players world-wide” and urged to “replace today’s Web search engines, operating systems and social networks”.
Europe’s digital shortcomings are a reality, but going after US-based tech companies won’t help overcome them.
In fact, the only industry that stands to benefit from a new season of muscular antitrust enforcement is the lobbying industry. What Europe’s tech sector needs is a real pro-growth agenda: bogus antitrust prosecutions will not enhance its ability to innovate and compete—they will only make it more reliant on the whims of bureaucrats.
photo credits: vango
The EU Commissioner for the Digital Economy is calling net neutrality a “Taliban-like issue,” Google has started sending out sarcastic GIFs as on-the-record-statements, and the European parliament is caught in a Mexican standoff about data protection.
Communication is a delicate art. Both communicating about technology, and using technology to communicate require a touch of finesse. Two months since I left Brussels, I’ve been busy getting used to life in the UK and writing about politics; realizing it was time to get back up to speed on tech and EU, I wandered back over to that section of the internet. Well, all I can say is:
Gunther Oettinger is calling net neutrality a “Taliban-like issue,” Google has started sending out sarcastic GIFs as on-the-record-statements, and the parliament are going all Mexican standoff about data protection. It was as if I’d walked outside a quiet country pub to take a call on my mobile (LOL I know, so old-fashioned) and walked back in to find a fist-fight in full flow in the bar.
While the technology portfolio has always been a good one for raising eyebrows — who can forget Neelie Kroes’ “Chanel no. 5 and nothing else” moment, Mr. Oettinger has taken things to another level. Within his portfolio, as well as the Taliban comments — video below — he managed to give conflicting messages about geoblocking.
Ending geoblocking — so that users can watch content that’s been paid for in one country across the single market — is a very popular idea, especially with border-hopping Brussels bubblers. While Mr. Oettinger’s Tweets show enthusiasm, he said in an interview with FAZ that “we shouldn’t throw the baby out with the bathwater” and should look at the impact on the film industry first.
That’s within his portfolio. The Commissioner hasn’t held back with his views on areas well outside it, either. He’s also told a German radio station Greece are like “elephants in a China shop.” Well, it takes one to know one. Let’s not forget one of his first moves on becoming commissioner was to take a pop at France’s efforts to sort out its deficit — not really an obviously digital issue.
He’s trampled on Competition Commissioner Margarethe Vestager’s territory with his views on the Google competition case. Also, it’s old but brilliant: remember that time he said there was no civilization West of Paris?
The next thing I thought I’d check up on is the Data Protection legislation, which was meant to be done by summer. The “one-stop shop” idea was a nice, easy-to-communicate policy: you have a query about online privacy, you got to the data protection authority in your country, they talk to the one in the country where the company is based, it gets fixed. Then I read this piece (by the excellent BrusselsGeek) and suddenly it wasn’t so clear. Lead supervisory who with the what now?!?
As well as the actual reworking of the data protection laws — meant to be completed this year — the European Parliament is flexing its muscles on the Transatlantic Trade and Investment Partnership (TTIP), saying there must be sufficient safeguards for Europe’s data protection laws. The parliament has to give its agreement to TTIP as a whole, and the civil liberties committee said it would have doubts about doing that without enough protection for EU citizens’ data. So it’ll be interesting to see how that one works out too…
So much drama! Perhaps the problem is simply words. They can be complicated, ambiguous and do as much to obfuscate as enlighten. We live in the age of Vine, Meerkat and Periscope, where live pictures of anything can be beamed into the ether at will. So Google have fixed this: instead of a boring old on-the-record statement (snooze) made using words (whatever, Grandpa) they decided to respond to a Wall Street Journal story about the Federal Trade Commission with a selection of Buzzfeed-tastic GIFs.
I guess that’s how it is now: two months away from covering technology in Brussels and I’m all like
photo credits: Chris Murphy
Copyright levies have existed in national legal systems for almost 50 years since first being introduced in Germany. However, instead of evolving alongside consumption behaviours and new means of distributing copyrighted content, copyright levies have become a burden for consumers, retailers, manufacturers, authors and thereby ultimately for the Digital Single Market as a whole.
A compensation scheme for private copying?
Copyright levies were designed to compensate rights holders for the ‘losses’ incurred by reproductions of works within the terms of the private copying exception recognised in international treaties and in the European Union’s Copyright Directive.
The act of copying was considered detrimental to the economic interests of rights holders, as it would be practically impossible to grant permission to lawful acquirers to carry out such acts for their own non-commercial and domestic use.
As such, the purpose of the system is to provide compensation and not remuneration. Authors are remunerated by way of the licences legally acquired by users according to and conditional on the distribution rights negotiated with their representatives.
Furthermore, the Copyright Directive is ‘device neutral’ concerning the means by which the private copying is carried out. It does not require a device-based levy system. However, European legal provisions do require any compensation scheme for private copying to take into account the application of technologies (‘Technological Protection Measures’ or TPMs) regulating users’ possibility to actually and legally carry out the act of copying.
A case of consumer detriment
From a consumer perspective, copyright levies constitute an unfair and outdated system for compensating rights holders for what amounts to a legitimate use of legally bought content.
Consumers expect to be able to make copies in order to make the content interoperable by way of converting the file to another format or simply transferring the downloaded file between devices. The same applies to back-up copies which consumers make of content carried on their computers and personal servers in order to protect the content against data loss.
However, the consumer concerns around levies extend beyond this and compromise the very functioning of the Single Market. The consumer detriment caused by existing systems of copyright levies can be attributed to three principal sources:
1. Territorial discrimination
National copyright levy systems differ substantially from country to country. In the 22 EU Member States who have adopted such a compensation scheme, there are inconsistences regarding the tariffs, the manner of calculation, the media or equipment affected and the beneficiaries.
For example, the French consumer association UFC-Que Choisir reported that in 2012 French consumers paid 4.8 times more in levies than the European average.
In a Single Market which should benefit all consumers equally, is it not unfair that some must pay more for an act which corresponds to their own legitimate expectations?
More fundamentally, these differences affect the free circulation of goods subject to copyright levies as national laws apply differently with the manufacturer or retailer having to clear these taxes in every Member State wherein the products are marketed before transferring these costs to the consumer.
2. Lack of transparency
In most cases, consumers do not know what copyright levies are, whether they are included in the purchasing price nor what they stand for.
Currently, there is inconsistency among retailers and manufacturers when it comes to informing consumers about copyright levies. Even within the same country and for similar products, there is an asymmetry of information given to consumers when it comes to levies (see picture below). Although the Consumer Rights Directive implemented in 2014 requires that consumers are informed of the “total price of the goods or services inclusive of taxes”, there is no obligation to provide a clear breakdown of the copyright levy rate.
Consumers have an incontrovertible right to know what they are paying for, especially if such a tax embodies the uses which consumers are entitled to make of the content they have legally bought.
3. Double payment
Current European systems of copyright levies apply irrespective of the uses consumers make of devices or blank media. They are sold and levied under the presumption that consumers will make private copies of copyrighted content and that this will cause economic harm to rights holders.
When consumers purchase online content, the cost of making private copies is already included in the purchasing price. This is controlled in different ways, for example by linking access to the content to a specific account or by the application of TPMs enforced in contractual clauses which restrict the consumer’s usage of the content.
Therefore, when consumers buy copyrighted content online they would be also paying for the possibility to exercise the private copying exception although they have already paid for this when purchasing the device. This amounts to a case of double payment by consumers for the very same act of private copying.
Copyright levies are not fit-for-purpose in the digital economy
Technologies themselves are suppressing the need to count on a ‘levy-like’ compensation scheme. The more digital content consumers are able to acquire in the form of licensing agreements, the less need there is for private copy compensation as rights holders would be directly remunerated and compensated at the same time. Therefore, the future of copyright levies must be a phasing-out.
Today and tomorrow’s technology will lead us to a Copernican revolution about the way consumers access and use digital content and so legislation must keep up with such changes while safeguarding the interests of creators and those subsidising the system: consumers.
The way forward – Life after Vitorino’s recommendations
In January 2013, the European Commission published the recommendations resulting from the stakeholder mediation process on private copying and reprography levies, also known as the Vitorino recommendations, in which various sectors were invited to give their views on different issues, including those mentioned above.
This document represents a first step towards thoughtful, considered reform of the current media-based compensation scheme. However, changes must occur at the heart of the European legal instrument legitimising national levies systems: the Copyright Directive.
Although it seems to be difficult to imagine the phasing out of copyright levies in Europe in the short-term, EU decision makers must urgently take legislative measures to balance the interests of the different parties concerned, including consumers.
Therefore, it is necessary to:
a. Establish harmonised criteria to define the harm suffered by rights holders for the act of private copying, whilst maintaining the possibility for Member States to decide alternative compensation mechanisms.
b. Clarify that certain acts of private copying are within the consumer’s legitimate expectations and cause minimal harm to rights holders therefore shall not trigger the application of copyright levies.
c. Make it mandatory to disclose a clear breakdown of the copyright levy rate in the retail price of the product (in those countries which have opted for such compensation schemes).
Like in the worst nightmare of Gregor Samsa, copyright levies have failed to transform themselves into a system which could have actually contributed to the development of the European cultural identity.
If decision-makers do not want copyright levies to become the ‘ungeheuren Ungeziefer’ of EU copyright law, they cannot miss the opportunity to make a real change in the forthcoming reform. After all, even the most unattractive caterpillar can always turn into something beautiful.
Photo credits: Dauvit Alexander
On paper (almost) everyone in Europe is lining up to praise the benefits of building a digital single market, including national governments. However, of late, member states have shown little appetite for “europeanising” their digital policies.
“One response to the digital revolution must be the Europeanisation of digital policy,” EU digital commissioner Gunther Oettinger proclaimed on Monday 16 March at the CeBIT fair in Hannover. His statement comes not as a surprise. Ever since its early days the European Commission has expressed the intention of going after national silos in the digital market.
We have also known for some time that such ambitions are being packed into a grand strategy due to be unveiled in May which will comprise a set of reforms in as many areas as copyright, telecommunications, audio-visual services, e-commerce, and so forth.
On paper (almost) everyone in Europe is lining up to applaud the move, including national governments. Only two weeks ago, a Council meeting of EU Competitiveness Ministers gave its blessing calling various actions aimed at removing unnecessary barriers in order to enable a smooth and quick transition to the digital age.
Building a European digital market is also one of the 10 key actions outlined in the German government’s digital plan for 2014-2017 that was presented by Angela Markel in person at the opening of CeBIT.
Yet behind these rosy appearances the reality may be way more challenging for Mr. Oettinger and his fellow commissioners. In fact, of late, member states have shown little appetite for “europeanising” their digital policies. The perfect illustration of this ill-concealed reluctance is the recent agreement reached by the Council on the so-called “Connected Continent” package.
Originally, the proposed regulation provided for less red tape for operators (for instance by creating a single authorisation to provide services across the EU), more coordination of spectrum use, a higher level of standardization for fixed access products as well as for consumer rules.
None of these proposals has survived the compromise text endorsed by member states, who removed from the package everything but its provisions on net neutrality and roaming charges.
At the end of the day, the irony is that the amended text of a proposal named “Telecom Single Market” would do nothing to sort out Europe’s fragmented telecoms market and regulatory imbalances.
And this is not an isolated case. From the data protection reform to the EU cyber security directive (most) national governments have so far appeared more prone to water down than to embrace the Commission’s drive for more common rules (and, conversely, less national powers) in many key areas of the digital sphere.
This is a worrying signal taking into consideration that the balance of EU power is tilting back towards governments at the expense of Brussels’ supranational institutions (European Commission and the European Parliament).
Things may perhaps change. No doubt the European Commission will try its best to build consensus using all its diplomatic leverage to push through digital reforms.
But given the precedents, as the forthcoming plan on the digital single market will entail several legislations that will touch upon sensitive national interests, not to mention the pressure coming from corporate lobbies, the fundamental question that should be asked is: Are our governments enough serious about building a truly digital single market? Or will they persist in striking “watered-down” and unambitious compromises that would clearly harm Europe’s chances to link its future prosperity to the digital economy?
photo credits: Mark Fosh
In Europe several countries already promulgated rules on civil drones. As the number of operators is expected to increase by 10 times in the next five years the EU is now focusing on developing a common policy.
2015 could be the year of drones in non-military aviation, marked by the ICAO Manual, the EU Riga Declaration and the American Notice of Proposed Rulemaking (NPRM) issued by the Federal Aviation Administration (FAA).
In February the International Civil Aviation Organisation (ICAO) released the first edition of the “Manual” (Doc 10019) on the international use of drones for civil applications. The basic ideas are that the drone should be airworthy (no wonder), but also that the person flying it from the ground is a pilot: “remote pilot”, but still executing the tasks and be accountable as a pilot.
Furthermore, and this is quite new in the ICAO literature, a chapter in the Manual is devoted to the “operator”, i.e. the entity taking responsibility for the entire cycle of operations: maintenance, qualification of the remote pilot, procedures, authorisations, insurance, privacy and data protection, etc.
In the EU several Member States (MS) already promulgated rules on civil drones, which, below 150 kg, are still a national responsibility. The most important common denominator across all these rules is indeed the central role of the operator: the operator has to apply to the civil aviation authority to obtain permits to fly, even for commercial purposes.
Consequently the holder of the authorisation has privileges (i.e. flying within certain limitations) and responsibilities (e.g. liability).
On 6 March the EU aviation leaders gathered in Riga, invited by the Latvian Presidency, and delivered a declaration which states that rules are “necessary now” and that the operator of a drone is responsible for its use: “When a drone service is delivered, the authorities should be able to act and hold the operator accountable”.
The approach based on regulating the responsibilities and privileges of the operator, already adopted by several MS, is hence expected to become a central pillar of the EU policy for civil drones.
In the MS there are already around 3,000 civil operators of drones legally authorised to fly. This number may increase by 10 times in the next five years, not only based on market forces and technology, but also on clear and proportionate rules on the internal market, without which no business case is credible, while insurers would be very hesitant.
But, after the Second World War, the USA have been the leaders guiding the development of civil aviation around the globe. Is this still true for the drones? On the technology side, no doubts, the Americans have excellent products, which represent a fierce competition to EU manufacturers. But on the regulatory framework, which is also a key enabler for the internal market, is the FAA leading the world? I believe not.
The USA in fact, were the first in the world to introduce (1926) the idea of a “type approval” for the design of an aircraft model, which is then industrially manufactured in several individuals.
This idea proved effective and contributed to make traditional commercial aviation as safe as we know it today. But a type approval requires a lot of technical effort and documents to be submitted to the aviation authority. Is it thinkable for drones of few kg which anyone can buy through the web? Possibly not.
And in fact, through section 333 of the reauthorization act of 2012, the USA legislator obliged the FAA to grant “exceptions” for small unmanned aircraft, including their possible commercial use.
The approach is hence diverging across the Atlantic: the FAA has been extremely cautious, since, due to the novelty of drones, they were not sure about the technical approach to be followed.
Their delay has forced the political authorities to act and presently the FAA is granting case-by-case “exceptions”, without any general rule yet promulgated. Again no wonder: this is since centuries the approach of the “common law” still greatly influencing the American culture.
In the EU, on the contrary, we are heavily biased by the Illuminist top-down approach and therefore we started from the operator and its responsibilities and privileges, even if technical standards were not yet mature…. and we are ahead of the USA for the regulation of civil drones.
Unable to further resist the political pressures, the FAA on last 23 February has published a NPRM on “small UAS” to allow routine use of certain small unmanned aircraft systems (UAS) in the USA aviation system, while maintaining flexibility to accommodate future technological innovations.
The FAA proposal offers safety rules for small UAS (under 55 pounds, which around 25 kg) conducting non-recreational operations (commercial or non-commercial, but always professional). The rule would limit flights to daylight and visual-line-of-sight operations (VLOS).
It also addresses height restrictions, operator certification, optional use of a visual observer, aircraft registration and marking, and operational limits.
This proposed rule is for some aspects similar to the European approach, since it finally accepts that for small UAS formal airworthiness certification may not be necessary, while operations could be limited to VLOS in day light conditions, below 150 meters of altitude and below a given speed.
But still it uses the term “operator” and the term “pilot” as equivalent, while in Europe the distinction is clear and the former is responsible not only for safety, but also for security, liability, insurance, privacy and data protection.
Anyway the FAA NPRM is a good step in the right direction: “rules now, even if technology is not standardised”. But still the semantics and the cultural approach (i.e. no sufficient attention to the “organisations”) are not fully aligned with ICAO and EU.
At worldwide level the Joint Authorities for Rulemaking on Unmanned Systems (JARUS) are also applying the ICAO and EU approach and presently developing a set of requirements (JARUS-ORG) for the organisations, including operators, involved in civil operations of drones.
In conclusion the expansion of the civil market for drones is unavoidable and will also bring benefits to society in terms of new services and new jobs.
In this context ICAO, JARUS and Europe are going towards a comprehensive regulatory framework whose central pillar is the operator and they have jointly the possibility of influencing the rest of the world. The FAA is, at least for moment lagging a little bit behind.
Photo Credits: David Rodriguez Martin
Last December Estonia became the first country in the world to offer “e–residency” for people interested in using its advanced digital services. Although the initiative is still in its pilot phase, figures show that it is generating strong interest worldwide.
In December 2014, the government of the Republic of Estonia launched a novel initiative called e-residency. Anybody and everybody from all over the world (EU included) can apply to become Estonia’s e-resident.
They can now get a digital identity (based on a smart ID-card) issued by the state in order to use the digital services that both public and private sector have on offer.
Although e-residency entails neither residency in traditional sense nor citizenship or not even any right to travel to Estonia/EU, more than 17,000 people have signed up to the interest list.
They are drawn by the possibility to get everything done digitally, like it has been the case for Estonian regular residents for quite some time already.
Indeed, Estonia has become known as e-Estonia because of the extent to which digital solutions have penetrated everyday life of people and companies, also public servants and ministers even.
Due to a strong digital identity and the fully legally valid digital signing it allows, Estonians literally do nearly everything digitally: sign any documents, set up a company online (and really fast – Estonia holds the world record for company registration with 18 minutes), do all banking transactions or send reports and applications to government.
Estonian citizens can even vote online for the parliament, which 31% of voters just did these past 2 weeks in latest elections.
Now such opportunities will be open for e-residents as well (except online voting perhaps). This is appealing for the rising number of digital nomads and companies out there.
60% of people interested in e-residency have signed up for business reasons. They want to be able to launch and run their company digitally, with no middlemen and little hassle on the way.
Truth be told, e-residency is still in its beta or pilot phase. Currently you can apply only in Estonia itself, plus have to visit the police and border guard service station twice (once to apply, the other to get the card). At first, only core services are open like signing, banking, business registry.
Still, close to 1,000 people have already come to apply for the e-resident ID-card and large majority already carry one in their pockets.
The reason for quick and preliminary beta launch was greater-than-expected interest by potential e-residents, once the initiative was announced. Also, Estonia is a strong start-up country (check out #Estonianmafia) and our government tries to act the same way.
We try to act and develop fast, build the services with the first users that we now have, iteratively improve and scale the offering all the time.
By end of April 2015 we will extend the application opportunities to our embassies and representations abroad, while also requiring only one visit to our offices from there-on. Applying for e-residency will become much more convenient rather soon.
Second, we are working with a variety of private sector companies and also public agencies to improve the services available to e-residents. We are improving the existing ones but more importantly launching complete new services that are useful for e-residents, in particular.
2/3 of the first 1,000 applicants hail from EU member states. 37% of first e-residents come from Finland alone. This reflects well the scope of the beta phase (you have to physically come to Estonia), plus the initial target group.
E-residency first and foremost is useful to anyone already having business or other relations with Estonia. They can now manage their investments or trade with Estonian partners or temporarily reside here more easily, handling all necessary matters online and from a distance.
At the same time, 17% of first e-residents come from Russia, 5% from Ukraine, another 4% from US and so on. Altogether some 55 countries are represented in the applicant pool, reaching well beyond EU.
This reflects the further objective and benefit of e-residency – it brings new users and companies here, at least in digital service space.
Besides making business and life more efficient and easier for our existing partners, this aim of increasing the market has been the target of Estonian government behind e-residency.
If we do not make enough babies ourselves, we can at least make Estonia bigger in digital realm! The companies from banks to digital content providers and anybody able to move part of business value creation online have now more and new users for their services, which should bring more revenue, work and tax income for the whole country.
The companies that have new opportunities do not have to born-and-bred Estonian ones only. In the Digital Single Market, these new users from outside EU can have access to the whole European digital service space as the Estonian digital identity is a trusted and accepted one.
So, we welcome partnerships with start-ups and already big players from all corners of Europe to join us in innovating services to these new e-residents.
We already see increasing interest for e-residency from entrepreneurs and other individuals in Asia, US and beyond. These are people who want to enter EU market, but are looking for a suitable gateway and highly like the ability to run their business hassle-free from a distance. Any services that benefit them in this way is more than welcome.
All the Europeans can also apply to e-residency, especially if you do not have proper digital ID on offer in your home country and if you want to make use of efficient and exciting Estonian digital services.
In the years to come, such a need should decrease though as digital IDs hopefully will be offered more in all EU member states. But you do not have to wait all this time, feel free to use the Estonian ID in the mean-time.
Our government will be happy if we reach 17,000 e-residents by beginning of 2018 when we take over EU presidency. Same time, we work under a slogan of 10 million e-Estonians, to set the ambition high and think outside-the-box.
We aim to figure out how to create services and environment that would be useful for a truly wide range of people. Then we will have truly made both Estonia and the EU Digital Single Market bigger.
You can check out more information on e-residency and sign-up to mailing list at www.e-estonia.com
photo credits: Steve Jurvetson
Starting from robust copyright rules, Europe needs to forge a level playing field for smaller European actors who work everyday to deliver a diversified cultural offer in the digital market.
How and why can independent music thrive in a truly European digital single market? What are the best regulatory conditions?
Creating a truly European Digital Single Market means getting rid of restrictions that create barriers to reaching across the EU, and to do that you need the best digital infrastructure with rules to match.
The key asset for independent labels to work in the digital market and break artists in across borders is copyright
Europe needs to strengthen copyright because it represents real value in our digital market. This will create better conditions for smaller music companies to take risks and break new acts. No one wants a market where only bigger labels are visible simply because copyright isn’t robust enough for smaller labels.
This debate is important because smaller labels take the biggest risks and account for 80% of all new releases in Europe today, as well as 80% of the sector’s jobs. Constantly expanding their focus, they are at the forefront of Europe’s digital market.
[Tweet “YouTube’s behaviour reveals why the status quo just isn’t good enough”]
Independent musician Zoë Keating wrote recently about how YouTube, the world’s biggest music service, had been dealing with her. This is the same sort of censorship-style negotiating tactics the Google-owned company exerted on independent labels last summer.
The EU institutions now have the opportunity to strengthen copyright so that we can create new growth and make sure this type of distortion is no longer possible.
A birds-eye view of things is often revealing and the copyright debate in Brussels no less so… Lots of scurrying going on, with those who are trying to undermine copyright often supported by the incumbent big tech sector.
While seeming to stand for the interests of users, or in some cases even creators, some voices push an old-world view which promotes transferring value from creators and their partners to global online superpowers who, in typical incumbent fashion, show scant regard for innovation and responsibility while trying to get rich and powerful from other people’s creations, property and data.
Avoiding tax is another hobby it seems. One independent music company was reported in recent years to have paid in the UK more tax alone than Google, Apple, Facebook and Amazon combined.
To liberate the Single Digital Market the EU needs a new rulebook. Europe’s citizens and businesses look to the EU to take the lead. From search, to data protection, to taxation, to how big online players engage with smaller actors, the time to act is now.
[Tweet “Clear rules on what global online powerhouses can and can’t do are a must”]
Together with robust copyright, a new rulebook could deliver a dynamic market. An innovative and secure online world for citizens is essential. And so is a level playing field for smaller European actors who work everyday to deliver a diversified cultural offer in the digital market.
A key element to achieve this is the principle of non-discrimination which should apply to how online music services deal with labels and artists. Of course it should also apply to search and data.
[Tweet “Independents don’t need special treatment. They need a level playing field”]
Independents see the digital market as a fundamental leveller, full of opportunity for smaller cultural and creative actors. For that promise to be fulfilled, the digital market needs to become more open, competitive and diverse and of course safe and fair.
What priorities should be addressed in the Digital Single Market proposal?
IMPALA has identified ten areas of work in a recently published Digital Action Plan. A top priority, in order to strengthen copyright and stop the transfer of value already mentioned, is to stop abuse of the so-called “safe harbours”, to use an American expression.
The “safe harbour” provision in Europe was designed to exempt neutral carriers or “hosts” of information online from liability as regards the copyright in creative works.
Today it is being abused by giant media businesses who act as distributors but try to take on the responsibilities of a host. As part of the review of copyright, we believe it is time for the EU to intervene.
The doubt around this has helped big tech to capture the lion’s share of the value created online through the distribution of creative works, to the detriment of creators and their partners.
[Tweet “The EU #copyright framework should ensure online distributors cannot pretend they are mere hosts”]
By clarifying that companies who build a business around facilitating access to creative works cannot rely on the host exemption, the EU will take a big step towards establishing the healthy online environment that the Digital Single Market initiative is meant to foster.
Creating a healthy online environment also involves taking a robust view on how it works, and of course this touches on the wider debate, including how certain operators deal with liability and anonymity for example.
[Tweet “IMPALA’s Action Plan is about delivering a distortion-proof Digital Single Market”]
The ten points of IMPALA’s Digital Action Plan:
1. Reinforcing the rights that drive the digital market and grow Europe’s copyright capital
2. Giving citizens the best digital infrastructure in the world
3. Improving pluralism and diversity online as well as offline
4. Revisiting the “rules of engagement” online
5. Growing Europe’s “missing middle” by improving conditions for smaller actors
6. Effectively tackling websites which are structurally infringing
7. Increase investment through a new financial approach to culture
8. Introducing greater fairness in taxation
9. Mapping how creativity works and measuring the sectors adequately
10. Placing culture and diversity at the heart of Europe’s international work
[Tweet “We need Europe to build a regulatory framework that provides a diverse and safe online ecosystem”]
Better transparency rules are also needed for organisations, think tanks and other voices such as coalitions and lobbyists. Policy makers need to know who is really saying what.
“Astroturfing” is a tactic commonly used in Brussels by deep-pocketed companies wanting to make it appear as though a message is coming from many different corners when it’s really just their own view being echoed and amplified, often via projects and organisations that are supported directly or indirectly.
Decision makers need a guide to another world wide web – the web of influence. Better transparency rules and monitoring are the answer.
[Tweet “We need the world wide web of influence to be fully transparent”]
A right balance between the need for more digital/harmonized rules on copyright and the necessity to protect authors/creators
The reason why people who work in the music ecosystem need copyright to be robust is that it is the fundamental trading tool which allows them to be remunerated. If creators don’t have copyright, the fruits of their labour can be transferred and they don’t have the economic and moral freedom to decide what happens to their work. Even the essence of freedom of expression is undermined.
Copyright also allows for innovative business models to spring up in the digital market. Spotify and Deezer are just two examples. They are world leading European streaming businesses giving unprecedented access to citizens to the widest diversity of music while remunerating artists and their partners such as labels and other rightholders.
To get the balance right, it is also important to understand the role of the various players in the creative process. Independent labels are more solicited today then ever before by artists wanting to partner with them.
Independents take their responsibilities seriously and are proud of their track record. Being the biggest investors in the process, they take risks and work with their artists to help them build a career.
They have a range of deals and revenue options which they work out with their artists (royalty splits, profit share after costs, advances, etc.). Again it’s all about balance and flexibility. What suits one artist and label won’t necessarily suit another.
[Tweet “Labels need sufficient revenues for today’s artists and to invest in the next generation”]
Independents work hard to open new opportunities for their artists and are often ahead of the pack. They were the first to license Napster, in 2001, and they have been at the forefront of the digital market’s evolution ever since.
Independents see those who love music not as mere consumers but as fans, as people who are eager to experiment and this is a great match.
To facilitate this dynamic, independent music companies and other rightholders have developed licensing systems for platforms such as YouTube on which fans can upload “content”.
By licensing platforms, the dissemination of user-generated content is covered. This allows creators and their partners to be remunerated for the use of their works, while ensuring that music fans can upload and share their artists’ favourite works without having to “worry” about copyright rules.
The system also gives creators freedom to say no to any use of their work they don’t agree with, a vital part of any creator’s personal rights over their own work, and of course their freedom of expression.
In other words, these platforms generate money on advertising, creators get a share, and users enjoy free access and sharing of music. So, beware of any push for exceptions that could help these platforms argue they can share even less revenue with creators or worse, no revenue at all.
To strike the right balance, decision makers need to get rid of barriers to this type of innovation, which certain players stifle by trying to hide behind the host exemption, either by not taking a licence at all or by under-licensing and not paying properly.
When it comes to harmonisation, it is crucial to look at how the market works in Europe. Independent labels build networks all over the continent. Local independent companies work with other European companies, but also with partners from outside the EU. Repertoire gets licensed country-by-country to different independents who have local market expertise.
From this, they generate revenue that they re-invest in new talent. With a music market already marked by high levels of concentration, it is vital that Europe fosters this way of working.
For creators, territoriality is part of the fundamental principle of freedom to decide what happens to their works and this must be reinforced. Creators choose territorial partners who give them the best chance to break borders.
[Tweet “Birds have wings, creators have copyright”]
So the EU can achieve balance by delivering digital rules that improve protection of creators and other rightholders in the online environment, and ensure that European cross-border cooperation is promoted through territoriality, and not undermined.
Access to “content” is one of the main reasons people go online. The market in Europe is the strongest and most diverse anywhere in the world. So let’s not undermine Europe’s strengths to the benefit of a few multinationals. Let’s build on our strengths.
[Tweet “Let’s make Europe the best place in the world to invest in copyright, take risks and be an artist”]
How streaming services can help independent music in Europe
Streaming is crucial. Streaming services are open platforms, where music fans access the music they want to listen to at their convenience. This effectively works towards levelling the playing field for smaller artists and labels.
Independent music companies created Merlin (www.merlinnetwork.org), a digital rights licensing organisation representing the rights of independent record companies on a worldwide basis. Merlin negotiates and concludes contracts with music services, including streaming services such as Spotify, Deezer, Beats, YouTube and many others.
The results are impressive. Independents are seeing considerable growth in streaming. This is due to the nature of those platforms and the ways independents use them. With streaming platforms, there are multiple entry points (social media, email, artists’ own channels, etc.) which independents capitalise on.
As Merlin CEO Charles Caldas puts it: “Once you liberate consumers from tightly controlled storefronts, and give labels direct access to consumers in the way these platforms allow, our sector will continue to grow, and thrive.” Building on streaming is imperative.
[Tweet “Building on streaming means fostering healthy trading practices, licensing and competition”]
The challenge for Europe now is to take the steps required to build the right environment for creativity.
photo credits: Pablo L. Alvarez
If Europe aspires to recover its global competitiveness becoming a truly innovative, knowledge-based economy, and aspires to grow by consolidating a digital single market, it needs not only to change legal frameworks and business paradigms. One essential element of the equation remains the digital education and skills of its population, without which there would not be suitable workers, potential consumers or smarter citizens.
Not only economic interactions but also other spheres of our daily life are increasingly mediated by new technologies, whether we are communicating with friends or making a bank transaction, looking for a job or studying.
While Internet access is progressively available even in the most remote areas of Europe and devices like smart phones and tablets are each time more affordable, a good number of Europeans remains digitally isolated.
Either because they do not perceive its value or have not the right skills. Today digital participation depends largely more on competences than on access to and use of technologies.
The lack of digital competence of a large part of the EU population has dramatic repercussions on their employability perspective. Regardless of overall high unemployment rates, in areas like ICT paradoxically the job offer exceeds the demand and the gap is widening, while it is expected that 90% of jobs in the near future will require ICT skills of some level.
There is a pressing need to develop the digital component of “new skills for new jobs” in the European labour market.
Despite the long record of policy developments in the field since at least 2002, reducing skills mismatches and preparing the population to face the challenges of an ever-increasing adoption of technologies in everyday life are still two urgent challenges that require pressing and focused policy action and endorsement.
The focus on digital competence in formal schooling is recent and still insufficient. The importance of learning about digital competence in non-formal and informal settings becomes a central aspect of education of the EU population with an employability perspective.
However, formal validation and recognition of competences acquired in such ways remains an issue for job-seekers (whether unemployed or already active in the job market) to be able to demonstrate to prospective and new employers their competence portfolio.
This validation and recognition was until recently provided mainly by the ICT industry and was of operational nature (product-based).
It is nowadays necessary to adopt a transversal model, widely recognised by key stakeholders, which takes stock of digital competence richness.
Somehow like the Common European Framework of Reference for Languages already did in its domain, standardising and leveraging the training supply.
A common European framework that allows a shared understanding of the meaning and implications of digital competence and that presents its components and levels of proficiency might ease comparability across Europe and the alignment and harmonisation of training offers.
Not one but three frameworks hat touch upon digital competence have been developed recently at the request of the European Commission – the eCompetence Framework for ICT professionals; the eCompetence framework for end users; the DIGCOMP framework.
While eCF is becoming increasingly the referent framework for ICT professionals and shall then be used in the context of ICT-related jobs, in the case of non-ICT professionals the picture is less clear and somehow confusing.
The eCompetence framework for end users is a framework that explains in a granular way five areas of digital competence, namely: Word Processing, Spreadsheets, Presentation, Communications, Web Browsing and Information Search.
For each area, a series of competences is developed and explained along three proficiency levels. This framework was developed to allow ICT users to describe and develop their capabilities and specifically to allow employers to identify which individuals possess the skills and abilities they require.
DIGCOMP is a competence framework developed for all citizens comprising 21 competences divided in 5 areas and including for each competence a description of three proficiency levels.
The DIGCOMP framework aim is to provide an exhaustive view of digital competence, so that various initiatives could be mapped onto its matrix. It recognises that initiatives, programmes, and certifications do not need to cover all 21 competences.
The DIGCOMP five competence areas are Information, Communication, Content-creation, Safety and Problem-solving.
In my view, this framework is currently the most adaptable tool to the needs of a diversified population looking for employment opportunities, and could be used as the main referent to develop the transversal component of digital competences that are necessary for a variety of job profiles, while the eCF for end users can be adopted when more operational skills are required.
But is highly desirable that the two become just one unique, richer framework that, like with languages, becomes a standard of the ICT training industry.
In conclusion, given the current economic crises, and given the premises of skills and vacancies mismatching, given the rising digitalisation of society which is not followed by a higher digital competence level of the population, as key stakeholders and players in this field we propose the following measures with the scope of nurturing digital skills for employability:
the endorsement of a unique, common reference framework of digital competence to create a shared language and understanding between education and employability and among different initiative for fostering digital competences. The existing frameworks can evolve and converge to better reflect the competence requirements of individuals and organisation
the creation of support material and sharing of good practices to facilitate the implementation of such a framework (with the creation of guidelines and of examples of job profiles to be mapped against it)
the recognition of digital competence as an ability that goes beyond operational skills and that support several aspects of everyday life
the promotion of the recognition of competences acquired in non-formal and informal settings, as the vast majority of the population did not receive a formal education on digital competence, and those who have might need to update their knowledge and skills.
 CEN, e-Competence framework for end users, p. 9. http://j.mp/1FUI68k
 Ferrari, A. (2013). DIGCOMP: A Framework for Developing and Understanding Digital Competence in Europe. Seville: IPTS. http://j.mp/1FpCGP5
An explanatory brochure is available here: http://j.mp/17vkJn2
photo credits: Mathew Knott
European efforts to create a Digital Single Market mean much more than the usual work on finalisation of legislation. A comprehensive approach is needed to understand and unleash the benefits of a truly connected continent.
The key question today is to understand the scale and the real impact of the digital revolution. The internet is a general purpose technology, as few inventions in the history have been and like those of Gutenberg or Bell, has completely changed the world.
We need to use an holistic approach to understand the different aspects of the forthcoming digital challenges, so that we can build tools that will allow us to fully exploit and benefit from new technologies.
The impact of the creation of the European single market has been crucial on many areas. The process of building the single market itself has provided already valuable lessons to the European economy. Notably the resulting common set of rules that simplified the legal framework for business and consumers alike.
[Tweet “The idea of the digital single market works as a multiplier”]
The digital single market adds value through the digital drivers that are present in all sectors of the economy.
Today, we are not only seeing a massive development of the ICT sector – we are also experiencing the spread of “ICT development” in all sectors and all branches of the economy. The benefit and value this spread brings, is a result of the growing number of digital factors found in the economy today.
Those digital factors create new opportunities.
First, the contribution of a new phenomenon: data processing that fuels the data driven economy. This changes the way we manufacture, increases the productivity, provides new ways of allocation of resources, improves energy and transport efficiency, supports the smart cities development and lays the basis of a future of internet of things.
The result is that we are confronted with a completely new economic reality. It extends from the “connected car sector” delivering various types of content – via the neutral platforms model, (defined as collection of goods and services provided in a fair way) – to the “app economy”, enabling everyday decisions of users while influencing their environment and the economic landscape.
This new reality is leading us to a new model of products and services; consumer oriented, aiming to meet our expectations, our needs. So the phenomenon of the personalisation emerges. Everything can be personalised, tailor made to our individual taste. But very often the trade off is disclosing the knowledge of our habits, our needs and eventually giving up privacy.
Therefore we are faced with the conflicting realities this new economic landscape presents. On one hand, disclosures that contribute towards the profiling of individual behavior as the means to monetise privacy and on the other our will to defend “the digital I”.
This is the reason why we need to have a data and privacy protection regulation in place, where trust is fundamental for the new digital economy.
Only by ensuring more trust we can build the right framework for the growth of new kinds of public services: the m-health in healthcare; new forms of teaching and dissemination of MOOCs influence in education; access to open data and public knowledge; and as far as the cultural activities are concerned, access to more opportunities thanks to the new European copyright rules, related to the authors and clearer definitions of the public domains.
Hence is obvious, that Big Data development, personalisation of products and services, data protection and digital security are relying on internet access and the framework for global connectivity.
The connectivity is the other great opportunity and challenge as it needs to serve the previously mentioned services and the ever growing number of connected devices. It is evident the need for investments in the area of infrastructure tailored to these future requirements of a digital, fully connected economy.
This translates into considering systemic, structural incentives for European operators to complete their work on 4G networks while beginning the preparation for next generation 5G infrastructure.
The internet is changing all aspects of our life: from the economic to the social and private. It redefines our position as consumers, as producers, as workers and as citizens.
[Tweet “The internet represents today a new and important opportunity to rethink our democracy”]
A new concept of citizenship is taking shape, opening new possibilities for participatory democracy, by enabling online consultations, rendering the decision making processes more transparent and making the citizens a valuable source of knowledge for the public authorities.
This new model of shared democracy is a good foundation for the shared economy. Moving forwards towards its implementation, by developing further the internet, its governance and its infrastructure, we should not forget the dark aspects it also brings.
As the virtual aspects, values and principles of the internet are crossing over to the real world, we should highlight the interconnections that these form related to: the clear rule of law, the respect for fundamental rights, the transparent tools for law enforcement.
The digital era is challenging us. The new is the added value of the paradigm shift.
We have a unique opportunity to move from open, creative minds to open societies and via the open governments to an open, much more collaborative economy with new competitive advantages.
But it requires the awareness that European efforts to create the Digital Single Market mean now significantly more than the usual work on finalisation of legislation. “More” means an holistic approach that will allow this digital package to provide comprehensive results and benefits.
The way for the paradigm shift is: from a new technology to a new socio-economic model of development.
photo credits: Dan Foy
Absurd, not of this time, incomprehensible. This is what the current copyright framework in Europe feels like. It is time to make it fit-for-purpose in the 21st Century.
Have you ever tried to explain copyright to a teenager? I did. It doesn’t make any sense to them. Funnily, the idea of a fair remuneration to creators is met with understanding.
The fact that things that are legal in your own country could be illegal in another Member State, that a funny mash-up they made on a social media platform could be pulled down for copyright infringement…I even tried going into the fact that some interpret copyright as meaning that reading lots of documents with your own eyes could be fine, but reading those same documents through the eyes of a computer using an algorithm (the ‘text and data mining way’) could create problems.
Absurd, not of this time, incomprehensible. This is what the current copyright framework feels like, whether you are indeed a teenager, or a grown up trying to be part of the whole ‘let’s increase Europe’s competitiveness’ mantra.
It’s not the fault of the existing legislation (even though, as any compromise that took nearly five years to emerge, it has its beauty problems). The Copyright Directive (also referred to as the Infosoc Directive) was adopted in 2001.
Pre-YouTube, Twitter, pre-pretty much everything we consider a given today.
[Tweet “There’s just no way legislators could have anticipated what would happen in the next decade”]
Thankfully, the European Commission has been convinced by the overwhelming response to its 2014 consultation on copyright that it needs to do ‘something’.
That something has been fleshed out a bit more in the draft Own-initiative Report on the evaluation of the Copyright Directive (2001/29/EC) of MEP Julia Reda, though that Report still needs to go through the full-blown European Parliament procedures, a process which could be quite painful and with uncertain results.
Does anyone think copyright is there to protect creators?
Actually, most people expect that’s what it does.
Yet copyright has lost its purpose some years ago. At least, in French, it sounds right: ‘droit d’auteur’. That’s what it should be about, no? Protecting the rights of creators.
[Tweet “Yet, nothing is further from the truth. Copyright is about protecting ‘rightholders’”]
That could be the scientific publisher a researcher had to give away all his rights to in order to ensure publication in a so-called ‘A-listed scientific journal’ (a requirement in many universities to be granted funds).
Or it could be a band of musicians that saw a big cut of its rights go to recording studios and other intermediaries.
Only this week, Techdirt went through the data produced in a new report put together by Ernst & Young with the French record label trade group SNEP to discover that, when it comes to the revenues generated from streaming music (e.g. Spotify or Deezer), ‘The labels end up with nearly 75% of the total payout, with actual artists and songwriters left with the scraps’.
That does not mean intermediaries are not useful. They can, in some cases, play a valuable role. But it should not be claimed that protecting the acquis of these right holders equates to protecting creators and creativity, as that would be one shortcut too far.
Does anyone think that current copyright rules make any sense to normal human beings?
As a law student, I discovered an interesting concept called ‘legitimate expectations’. It was in the context of administrative law and the fact that citizens could claim they had certain ‘legitimate expectations’ in their handling with public authorities.
The legitimate expectations of consumers around Europe are that (1) they like to access content regardless of their device or location (2) they like to create content using multiple platforms (the so-called ‘user-generated content’) and multiple media, and that (3) when content is available easily in a legal form, studies show they buy it.
Copyright rules and the contracts that have been built upon (or beside) them are so out of step with these expectations that there is now a real disconnect between reality and the rules in place.
It is telling that a 2011 Consumer Focus report showed that 73% of UK users are never quite sure what is legal and what is illegal under copyright law (a result which makes one wonder if the remaining 27% are all IP lawyers are merely blissfully ignorant?). That leads to frustration and a lack of sympathy for something that at its root does make sense, i.e. creators deserve to be rewarded.
Does anyone think research, education, consumption of content and production of content are things that do not go across borders?
Actually, some people do.
Even officials of EU institutions! Yet at the same time, these institutions talk about creating a European Research Area or promoting Massive Open Online Courses (MOOCs). Thinking that researchers work within set geographic boundaries is absurd. Thinking copyright is not an issue for them in that context, is even more absurd.
Researchers, educational institutions, cultural heritage bodies, libraries…all of these stakeholders have been set up – often with public money – with a public interest mission: discovering new methods and tools, teaching, giving access to culture and preserving it, etc. Yet at the same time, laws are in place that make it increasingly difficult to fulfil this public interest mission.
Digitising a newspaper with multiple collaborators, means libraries have to become actuarians that try to guess what the life expectancy possibly may have been to then add 50 to 70 years according to the ‘life plus 50 or 70 years’ term of protection rule. The result: digitized newspapers are not published to the general public beyond ridiculous cut-off dates in the 1850’s.
Does anyone believe a legal framework can work when private stakeholders can just ignore the rules through technical gizmos or contractual terms?
That one is difficult to grasp.
The reality of copyright is that most of the content we consume these days is covered by:
– contractual terms and conditions: for example, the T&Cs we never read before clicking ‘I agree’ or the licensing terms publishers impose on anyone wanting to buy items out of their catalogue, and/or
– technical protection measures: for example, the technical limitations that do not allow you to convert the movies you bought on DVDs and that you would now like to copy on a USB stick to plug directly in your Smart TV, even though the law says you can make a private copy and the price of your USB stick probably included a private copy levy.
So there is no point in going through a copyright review, without including a prohibition for contractual or technical measures to bypass the rules in place.
So what’s the magic recipe?
Sadly, there is none, as starting from scratch does not seem to be on the agenda. But as many cooks know, sometimes changing a couple of ingredients can do a lot to save a dish that looked like a lost cause.
Looking at the rules we have, the C4C Copyright Manifesto identifies four key elements in getting Europe to Fix Copyright, namely:
1. a Copyright review that simplifies and modernizes the rules to bring them into line with today’s reality and comprises a flexible norm to cope with future evolutions;
2. Increased harmonization based on a mandatory list of limitations and exceptions, that enables both users and businesses to understand their rights and obligations across the EU;
3. A shortening of duration that does not extend beyond what international treaties require as well as a faster transfer to the public domain; and,
4. A review of the implementation and enforcement of copyright rules, based on demonstrated harm and the rule of law, including an in-depth reassessment of private copy levies and the preservation of intermediary liability rules.
MEP Reda’s report suggests many of those ingredients. Up to the EU institutions to show that they are serious about making copyright fit-for-purpose in the 21st Century.
photo credits: Ben K Adams
As an understanding of ICT is a requirement in nearly 90% of professional occupations, embedding coding skills in both formal and non formal education should become a priority – especially in Europe where a massive shortage of tech workers is looming
As technology becomes further integrated within our society, it has become increasingly important for young people to understand the world around them. Few stakeholders in employment and learning doubt the importance or relevance of learning programming.
[Tweet “Europe is expected to face a shortfall of over 900,000 technically skilled employees by 2020”]
In the UK alone, it is estimated that there will be a shortage of approximately 249,000 workers for technology based jobs by the same year. The creation of a European Digital Single Market is one of the top 10 priorities of the European Commission.
As an understanding of ICT is a requirement in almost 90% of professional occupations, the lack of skilled experts which Europe is currently experiencing, will hinder the advancement of a hyper-connected single market.
To overcome the the gap, coding skills need to become embedded in both the formal education systems through curriculum development, and in non formal education such as after school clubs. The success of this will depend on a strong collaboration between Government, civil society and industry.
CoderDojo is a global community of after school, free programming clubs for young people. It is focused on giving kids and young people all over the world better access to the magic behind the technology that surrounds us.
CoderDojo clubs (Dojos) run all over the world on a weekly basis, giving young people between the ages of 7 and 17 the opportunity to learn how to develop computer code, websites, apps, programs, games, and to explore creatively with technology.
Young people who attend Dojos also learn complementary skills of logical thinking, problem solving, presentation and communication skills. As of January 2015, there are over 560 active Dojos in 56 countries, 370 of these clubs are spread across 27 European countries.
In England, schools are introducing aspects of computer programming to children as young as five. Estonia has assigned €70,000 to an e-enabled program called Proge Tiger which aims to teach children from 7-19 how to code.
The program offers teachers resources and training as well as supporting their schools financially in order to buy the equipment they need. These initiatives are part of the reason that the English and Estonian governments some of the most proactive institutions in promoting and supporting coding among young people.
A recent survey of 20 EU countries, conducted by the European Schoolnet, delivered encouraging results in relation to the introduction of programming to school curriculums. Twelve of the countries already have integrated coding at a secondary school level while 7 countries plan to do so. However the introduction of coding into curriculums is not enough.
For young people to become truly immersed in coding, afterschool clubs like Dojos are required to facilitate this extended learning. Children attending Dojos are driven by their own motivation, learning at their own pace, exploring and creating technology in a way that interests and excites them.
[Tweet “Acquiring an understanding of computer coding is extremely important within our society…”]
…if we want to create a European Digital Single Market. Without it, the majority of citizens will remain passive consumers and will be at the mercy of programmers and technology giants.
The creation of a European Digital Single Market will bring with it great opportunities, with the European Commission estimating that it could produce up to €250 billion in additional growth and could also counteract rising unemployment rates.
Commissioner Ansip recently wrote in a recent blog on the development of the DSM strategy that, ‘ We should only set out what is realistic, what is achievable and what can be easily understood. This should not become a ‘catch-all’ strategy, in the sense that it promises and talks a lot – but does not contain anything that can be done properly, or has any real impact’.
I would echo his sentiment, but apply it to digital education. For Europeans to develop the necessary skills to succeed in the Digital single market, a combination of supporting of informal learning programs, like CoderDojo, and the implementation of computational thinking courses into formal education systems is required. But most importantly, real tangible support is needed from a range of stakeholders including European institutions, national governments, and industry leaders.
There are many ways to get involved in CoderDojo, if you are intersted in mentoring at a local Dojo please see zen.coderdojo.com and get in touch with the Champion. For more information on starting a club see www.coderdojo.com. Or Get in touch e-mail: [email protected], Newsletter: Sign up, Twitter:[email protected]
photo credits: Crown Copyright -Arron Hoare / www.coderdojo.com
The draft Data Protection Regulation (DPR), as it has been amended by the European Parliament, would seriously impair Europe’s competitiveness in medical research and innovation, which in turn will have a negative impact on health and wellness in the population.
The right to privacy and the consequent need for data protection is an aspiration of the great majority of people living in Europe. The draft Data Protection Regulation (DPR) is designed to provide the legislative framework for protecting peoples’ right to privacy and generally it does a very good job.
However, there is another right to which a great majority of citizens aspire.
[Tweet “The right to a healthy life, which implies the right of access to the best possible medical care”]
Excellent medical care is impossible without excellent medical research, which provides the new diagnostic instruments, drugs and other measures for keeping people healthy.
Balancing these two rights is critical if we are to protect individuals’ data, while avoiding harmful unintended consequences for research. As a practicing doctor and active medical researcher I believe there is a danger of that happening if the Parliament’s amendments to the DPR are adopted.
Medical research has increased the average European life span from around 40 to over 80 years in the 20th century. It has eliminated polio with vaccination; turned AIDS into a non-fatal disease; protected young women from cervical cancer; and cured stomach ulcers with antibiotics, eliminating the need for surgery.
The list is enormous. Medicine has also provided much employment in Europe in the last century.
Effective medical research requires a large number of different types of data, from varied sources, ranging from laboratories to hospitals to census information or medical records. Epidemiological and association studies often require very large data sets, based on information from thousands of people, to get the answers we need for disease prevention and to maintain “wellness”.
There is a tried and tested system for protecting the privacy of individuals. It is based primarily on local ethics committees that include lay representation and which work to an international standard expressed in the Helsinki Declaration.
In addition, peer review guarantees scientific validity and medical importance and eliminates unnecessary experimentation, or experimentation that cannot achieve a result to the question posed. This culture includes developing new methods to protect data, which are refined as science and technology progress.
Europeans view their health as being as important as their right to privacy. In a Eurobarometer survey from 2014, 40 per cent of respondents said that “treatments that work” are one of their criteria for high quality healthcare.
[Tweet “Health research is essential for discovering and testing better treatments”]
In Europe’s socialised health systems, the vast majority of people contribute to funding health care through taxes. Data collected during the care of an individual clearly belong to that individual.
But perhaps we should consider whether every citizen who pays for the health system also has a right for this rich information to be shared – safely and securely – to improve the health and wellbeing for all of us.
At present, the legal framework and the culture of safety in medical research respects the balance between the right to privacy and the right to health. That important balance will be maintained if the final version of the Regulation retains the substance of the medical research exceptions proposed in the initial Commission draft.
I believe that the adoption of the Parliament’s amendments to the Regulation would seriously impair medical research by preventing some studies and creating ambiguous rules and unwieldy, bureaucratic processes for others.
Europe’s competitiveness in medical research and innovation will be blunted, impacting negatively on opportunities for job and wealth creation, which in turn will have a negative impact on health and wellness in the population. This is a vicious circle that must be avoided.
This post was originally published on the website of the European Data in Health Research Alliance (www.datasaveslives.eu / @datamattersEU)
Dozens of players keep running to EU competition authorities amid current wars around tech and telecoms policy. Anxious decision-makers are also weighing in by calling for more antitrust action. Yet the idea that competition law is a panacea for every market problem is misplaced. In fact, it could delay Europe’s innovation dividend.
The fundamental rule in any market economy is that market forces, rather than public interventions, should be the predominate factor. If you have an idea or a problem – you try to address it first on market terms.
If you think the market has changed so much that there is no real level playing field, then you lobby to have the rules changed. Only in the case that all these efforts fail, or in the case that the rules were appropriate but broken in ways that significantly harm consumers and competitors, do you then think about getting competition law involved.
There are few instances in the current wars around tech and telecoms policy handling where these tests are met. Yet dozens of players keep running to the European Commission competition regulators to fix their problems.
Competitors who are failing in the market find it financially rational to roll the dice with regulators in the hope they catch a break.
“Five millions euros on a fake grassroots campaign and a bunch of mega-bucks lawyers – no worries! We could win a billion!” On the other side of the coin, companies under investigation or threat of investigation find it handy to string the process out. “Why settle now? Sure that would be simpler but if we string it out we could squeeze another billion out of our business model!” Ker-ching! [Tweet “EU and national regulators risk being turned into service-providers to warring market players”]
In this world-view if only the EU was fairer, tougher, softer, saner, quicker, more inclusive, less obsessed with consumers … pick your adjective, then all their problems would go away.
Let telcos merge! Take on Google! Show the Americans we are not pushovers! Save consumers! All these actors want the EU to be either digital-surgeon-for-hire or digital-death-squad-for-hire. They are wrong to want it, and deluded to think the EU can deliver it, even in the few cases where the current treaty makes it legally possible.
Those problems on their own might be containable. But another factor risks pushing this growing snowball out of control: the market players often misunderstand their own long-term interest.
Let me give you some examples.
1. Telecoms companies that insist on in-country mergers. These mergers are seen as a solution to their failing business models (shrinking margins on non-data services, and cross-subsidising rip-offs like roaming). Such companies run to the EU because their national regulators do not give the answers they want.
In trying to squeeze the Commission before there is a real EU telecoms single market they risk throwing away the last shreds of trust they have with their customers (they are already the most complained-about sector). Recent in-country mergers haven’t improved networks (because you need external finance not medium-term merger efficiencies for that) but they have increased consumer prices.
More broken promises like this will lead to things like the most restrictive type of net neutrality laws and willingness by authorities to let these telcos go bankrupt.
Remember that the privately-owned companies can go bust and their cables and towers will simply be sold onto to someone less greedy. The government-owned companies are the biggest danger. They want mergers because they are too afraid to do what they really need to do: restructure, including making tens of thousands of unnecessary staff redundant.
That is politically difficult today – so it’s much easier to blame EU regulation and run to EU competition enforcers to get them out of the real business choice they face. These former government monopolies risk bringing the whole house down, and it’s really got nothing to do with competition law.
2. Companies that lined up to stall a Google search settlement (including Google). There’s a whole question of whether this investigation was ideal, what’s less ideal is the unseemly harangue around it. I’ve lost count of the number of fake organisations lobbying for certain outcomes. Here’s a tip: any group with an adjective in the title is probably fake. Interests should lobby as themselves or via a neutrally-titled industry association, not via some imaginary group a citizen can’t themselves join.
This endless jockeying over Google is virtually identical to the games around the Commission’s 2012 data protection proposals. And all that won the antagonists was a half-cooked court ruling that posed more new questions than it gave answers.
The other analogy that comes to mind is the copyright policy gridlock in Europe. 14 years without a revision of the law, and Europeans are forced to pirate content to make up for the parallel trench-warfare regulators and stakeholders have built for themselves.
The main companies in all these games think their choice is short-term rational. Maybe. But it isn’t long-term rational because it’s one big distraction from the task of innovation. And it’s downright crazy for European society, because it delays Europe’s innovation dividend: jobs, and keeps European competitors in the thrall of the stupid meta-narrative that everything revolves around DG Competition.
A line needs to be drawn under this nonsense. Is that giving into new digital monopolies? No.
Google is not the monopoly when it comes to the internet – the US government is. Which is why the European Union has long wished to reform internet governance so that the monopoly is broken, and a fair level playing field can exist. Now that the US Government itself agrees to that, the task is to ensure it happens. That is the first big picture. Lining regulatory guns up against one successful player in a sub-market, a player which by definition is not a monopoly, is a fool’s errand.
The second big picture is that of big data. It’s not about the competitive tactics of Google or Amazon or Facebook. The big picture is about how data in a new means of production and how the manipulation of it is going to alter what it means to be human.
Dealing with that question is way above DG Competition’s pay grade, but it is the question that should be consuming all of us – the companies included.
And here’s the ultimate proof of why competition law isn’t going to hit the nail on the head: the only thing the data companies would be scared of is if they were forced to register and publish their algorithms.
That may be a bad idea for lots of reasons, but it is the only thing that would truly allow competition authorities to know what is going on and to fix it. DG Competition can’t force that and the EU is never going to be legally allowed to propose it.
So it’s time to worry less about sideshows dressed up as the main game.
It’s time to realize that competition law is just one instrument of one minority factor in the wider digital revolution.
If we don’t, we’re all shooting ourselves in the foot.