In a recent announcement, the European Commission (the “Commission”) has 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 face 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, such as the Freedom to Provide Services, to trade across the EU, 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 15% of citizens purchase goods online from another EU member state and that only 7% 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. 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.

Pillars

  • Better access to digital goods and services across Europe.
  • Ensuring that the right conditions are created to enable digital networks to flourish.
  • Maximising the growth potential of the digital economy.

Actions

All 16 of the Commission’s key actions are available here 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. The new data protection rules have been eagerly awaited for some time and the 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 has been recent, many of the legislative initiatives have already been in development in some time. 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.