Realising the Digital Single Market

7 December 2011

“Future growth and jobs in the EU will come from the Single Market, if we can find ways to unlock its full potential,” said Jonathan Faull, director-general for the internal market and services at the European Commission.

Admitting that the EU economy was “desperate for growth and jobs,” Faull said European countries were in no position to spend their way out of the crisis. “But what we can do is finally tap into the potential of the Single Market to boost growth,” Faull insisted.

“The world is being transformed by the digital economy, but its contribution to EU GDP is very small. It was no more than 3% in 2010. There’s a lot of potential but we’re missing opportunities,” he lamented.

Faull outlined the European Commission’s plans for the coming months:

  1. In spring the Commission will publish proposals on collective rights management for artists and composers: part of so-called ‘pan-European digital services’. This will require a legal framework and governance for online music, Faull said.
  2. The video-on-demand market remains stubbornly national. This is partly down to language and culture, “but many other aspects deserve EU scrutiny”.
  3. Print media are still very important and the industry has a great future ahead of it, Faull insisted. Commission proposals on out-of-print works are currently being discussed by EU governments and the European Parliament.
  4. The Commission may decide to legislate on private copying levies in 2012, he said.
  5. In 2012 the Commission will launch a study on the application of the Copyright Directive in the Digital Single Market to analyse whether more legislation is required.
  6. The Single European Patent. Faull insisted that 25 member states were close to striking a deal. “We hope that our Spanish and Italian friends will join us,” he said.
  7. Boosting IPR enforcement. “Progress is needed on access to justice. In theory it’s open to everyone, but there are money and time constraints,” the director-general said.
  8. Boosting e-commerce for SMEs, particularly by introducing contract dispute settlement systems, new payment systems and new means of improving trust in websites.
  9. Boosting e-procurement would “save states and companies money, and open up investment opportunities for firms in foreign countries”.

“Europe has missed a lot of opportunities to complete the Digital Single Market,” said Erika Mann, director of Facebook’s Brussels office.

Mann complained that Europe held “too strong a belief that regulation can solve everything”. “Yes, it’s very important, but openness to the global market, innovation and entrepreneurship are also crucial,” she explained.

“Many innovators move out of Europe, frustrated at how long it takes to get ideas to market,” Mann said, urging Europeans to understand the importance of opening and connecting the EU economy to the global marketplace.

She urged businesses to “think big and get out of the European box”. “Social business is crucial for Facebook. We partner with companies all over the world, such as Spotify. That’s a European company based in Sweden, but it’s now the world’s most important,” Mann said.

“Current rhetoric indicates that the EU institutions have finally embraced the need to establish a Digital Single Market,” said James Waterworth, director of Nokia’s Brussels representative office.

In his view, the European Commission’s performance had been “neutral” so far. “We’re only halfway through its mandate and we’ve seen some progress. But passing legislation takes time,” Waterworth said.

“We’ll publish a Communication and Action Plan on e-commerce on 11 January,” said Kerstin Jorna, deputy head of cabinet for EU Internal Market and Services Commissioner Michel Barnier

“My commissioner doesn’t believe in regulation for regulation’s sake. It’s the chain of events after clicking on a website that concerns us,” Jorna explained.

“Do we trust websites? What about counterfeit products? And which law applies?” she wondered, explaining why the European Commission had proposed a ‘28th regime’ to which consumers and companies alike could opt in.

“Article 20 of the Services Directive forbids discrimination on the grounds of nationality,” said Jorna, adding that the Commission would look into whether this offered scope to fight delivery restrictions.

“On 11 January we’ll also publish a Green Paper on payment systems on the Internet,” the EU official announced. This will have to deal with micro-payments as well as credit cards if e-commerce is to become a reality, she said.