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
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
The Digital Single Market strategy lacks focus on digital inclusion and e-skills, says Scottish MEP Catherine Stihler. Nonetheless, she explains, the European Commission has made a step in the right direction but now the real challenge is to translate it into effective legislative measures. As digital is changing all the time and technology is running ahead of us, Europe’s push to unleash the potential of the digital single market ought to be future-proof, argues Mrs Stihler.
Photo credit: Josu Gonzalez
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.
The Commission is expecting European leaders to give strong political support to the DSM strategy, says spokesperson for Digital Single Market Nathalie Vandystadt, signalling that all the actions listed in the initiative have been called upon by a vast majority of Members States and MEPs.
What about the criticism that the strategy is lacking in both grand vision and on practical implementation? This is only the start of a long journey, she replies, and the commission is already working on concrete proposals. We cannot say the strategy is not ambitious enough – It is realistic.
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
The European Commission has taken an important first step in outlining possible elements of an EU action plan on Big Data. It is now essential to get the policy framework right. The faster the better.
A second wave of digital transformation is coming.
The first one revolutionized the way we order information and spans technological advances from the advent of the mainframe computer to the arrival of Internet search.
[Tweet “This second wave will reinvent how we make things and solve problems.”]
Broadly it can be summed up in two words: Big Data. The expression ‘Big Data’ is used to describe the ability to collect very large quantities of data from a growing number of devices connected through the Internet.
Thanks to vast storage capacity and easy access to supercomputing power – both often provided in the cloud – and rapid progress in analytical capabilities, massive datasets can be stored, combined and analysed. In the next five years Big Data will help make breakthroughs in medical research in the fight against terminal illnesses. Per capita energy consumption will decline sharply thanks to smart metering another application of Big Data.
Traffic jams will be rarer, managing extreme weather conditions will become more science, less guesswork. Makers of consumer goods of all kinds will be able to reduce waste by tailoring production to actual demand. This new ‘data economy’ will be fertile ground that will allow many new European SMEs to flourish.
Broad adoption of such Big Data applications can only happen if the data is allowed to flow freely, and if it can be gathered, shared and analysed by trusted sources. Size definitely does matter. The bigger the dataset, the more insights we can glean from it, so it’s important that the data can flow as widely as possible.
[Tweet “Some elements of Big Data might involve personal data.”]
People need to be confident these are protected by laws and agreements (such as safe harbour). All actors in the data economy must work hard to ensure that data is as secure as possible against theft and fraud.
The European Commission has taken an important first step in outlining possible elements of an EU action plan for advancing towards the data-driven economy and addressing Europe’s future societal challenges.
To complement this initiative DIGITALEUROPE has drafted a paper outlining what we see as the policy focus in relation to Big Data.
We have identified eight priorities:
– Adopt a harmonised, risk-based and modern EU framework for personal data protection that creates trust while at the same time enabling societally beneficial innovations in the data economy
– Encourage the protection of Big Data applications from cyber attacks, focusing regulatory efforts on truly critical infrastructures
– Support the development of global, voluntary, market-driven and technology-neutral standards to ensure interoperability of datasets
– Clarify the application of EU copyright rules so to facilitate text and data mining
– Boost the deployment of Open Data by transposing the Public Sector Information Directive into national law by June 2015 at the latest (EU Member States)
– Create trust in cross-border data flows by supporting the implementation of the Trusted Cloud Europe recommendations
– Continue addressing the data skills gap by supporting initiatives like the Grand Coalition for Digital Jobs
– Continue encouraging private investment in broadband infrastructure and HPC technologies with public funding DIGITALEUROPE is ready to engage constructively with the European Commission, Parliament and Council to help them formulate a European action plan for the data economy
It is essential to get this policy framework right, but it is also important to move fast. While Europe is preparing the ground for widespread adoption of the new digital age, the rest of the world is not standing still.