Europe’s Digital Single Market strategy: what is it and what does it mean for e-commerce?

20 Jul 2015

European flags image by Markus Pfaff via Shutterstock

What is the European Commission’s Digital Single Market strategy and what can we expect from it? Mason Hayes & Curran explains.

In a recent announcement, the European Commission declared its plans to create a Digital Single Market (DSM), allowing citizens, individuals and businesses to more effectively access and exercise online activities across the European Union.

The aim of the initiative is to overcome the difficulties online and digital operators may have when faced with 28 sets of rules governing electronic commerce associated with each member state.

What is the Digital Single Market?

In the same way the EU aspires to have a single market for goods and services across the EU, the DSM aims to remove regulatory walls and move from the current 28 national EU markets to one single market in the digital sphere. While online operators can already rely on principles of EU law to trade across the EU – such as the Freedom to Provide Services – the DSM is aimed at further encouraging cross-border digital trade.

In May, the DSM strategy was adopted by the Commission, which outlined the barriers currently faced by citizens in accessing the digital market, leading to them missing out on goods and services. The Commission revealed that only 15pc of citizens purchase goods online from another EU member state and that only 7pc of SMEs complete transactions cross-border.

‘Only 15pc of citizens purchase goods online from another EU member state and only 7pc of SMEs complete transactions cross-border’

What are the benefits of the Digital Single Market?

The main attraction of the DSM to the EU is its potential for economic growth and employment.

The Commission projects that the DSM could contribute €415bn per year to the European economy and potentially create hundreds of thousands of new jobs.

The average consumer would be offered greater choice of goods and services and the DSM could positively impact price competitiveness, while business operators would have decreased compliance costs in operating across borders.

What is the strategy?

The DSM strategy sets out three pillars and 16 key actions, which the Commission is tasked with delivering by the end of next year.

The three pillars of the Digital Single Market strategy are:

1. Better access to digital goods and services across Europe

2. Ensuring that the right conditions are created to enable digital networks to flourish

3. Maximising the growth potential of the digital economy

All 16 of the Commission’s key actions are available online and include:

  • Rules to make cross-border e-commerce easier, aiming to provide consumers with a broader spectrum of rights while providing businesses with opportunities to sell across borders more easily
  • A modern, more European copyright law aimed, in part, at ensuring that users who buy films, music or articles in their home country can also enjoy them while travelling across Europe
  • Reinforcing security in digital services, especially with regard to the handling of personal data

With regard to the latter, the new data protection rules have been eagerly awaited for some time and the EU’s Digital Agenda provides that the regulation is to be adopted by the end of 2015.

The Commission also intends to review the e-Privacy Directive, which regulates cookies and spam in Europe.

Where do we go from here and what can we expect?

Although the announcement of the Digital Single Market strategy has been recent, many of the legislative initiatives have already been in development for some time, and some may face uphill political battles.

Significant legislative plans on this year’s agenda include increased harmonisation of copyright law, a modified proposal for a common European sales law, and a new directive on comparative and misleading advertising. The Council of the European Union has recently approved a version of the general data protection regulation, although it may be a year or more before a final version is agreed.

The content of this article is provided for information purposes only and does not constitute legal or other advice.

European flags image by Markus Pfaff via Shutterstock

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