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
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”.
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