Member News

European digital single market entering the final stage

By Dr. Torsten Kraul, LL.M. Noerr

The ambitious project of a European digital single market is entering its decisive phase. The European Commission released a digital single market strategy as a central part of its agenda in May 2015. The strategy provides for far-reaching measures to facilitate better access to digital goods and services, create the right conditions for digital networks and services and maximize the growth potential of the digital economy. The aim is to create an open, interconnected and digital single market.

Of the 29 legislative proposals proposed by the Commission, 17 have since been agreed upon by the European legislative bodies(Commission, European Parliament and Council). These are accompanied by numerous non-legislative measures, such as a European strategy on artificial intelligence.

Tight time frame to achieve digital single market’s completion:
Twelve other initiatives are still pending however, including the prestigious project to reform the EU copyright law.

In line with this status quo, the 2018 Digital Economy and Society Index by the Commission indicates that despite the EU’s increasing efforts regarding digitization, this progress is not yet sufficient to catch up with the global elite. The Commission therefore urges to complete the digital internal market quickly.

The time frame to achieve this is tight, as the Commission’s current term ends next year. In addition, the elections to the European Parliament will take place in May 2019. This explains the increased rate at which the EU has been pushing ahead with the remaining initiatives since the beginning of the year.

Mixed success regarding remaining initiatives so far
There have already been several achievements. A Regulation on geo-blocking was adopted in March and will come into effect on 3 December 2018. It is intended to promote cross-border online trade by preventing unjustified geo-blocking.

The EU institutions also reached a political agreement in June to reform the rules governing the telecommunications sector in order to prepare for new high capacity networks with high transmission rates. The current regulatory framework consisting of four separate directives are to be replaced by a new European Electronic Communications Code; its formal adoption is expected in autumn 2018.

The EU’s Audiovisual Media Services Directive will also be amended, according to a political agreement reached by the Commission, the Council and the European Parliament. It will govern on-demand services in addition to broadcasts. Moreover, they agreed on a Regulation on the free flow of non-personal data, which will allow data to be stored and processed anywhere in the EU without unjustified restrictions. These measures are equally expected to be adopted in autumn.

Meanwhile, the status of other measures is still unclear. The proposed ePrivacy Regulation is intended to comply with the GDPR and to substantially update the current legal framework. An agreement in the so-called trialogue between the Commission, the EU Parliament and the Council has not yet been reached however. The goal of creating a modern European copyright law has not yet been achieved either. The EU parliamentarians recently rejected a draft bill. Leading up to the vote, certain measures in the bill concerning the ancillary copyright protection of publishers and so-called upload filters had caused strong controversy.

Digital single market both opportunity and challenge for companies:
In view of the initiatives outlined above, the emerging digital single market offers a great opportunity for Europe. According to a forecast by the Commission, it could add €415 billion to the EU’s economy per year. At the same time, the large number of new regulations bring challenges for companies which have to adapt to the new legal regimes. It is therefore necessary to monitor the status and development of the relevant proposals and analyze their possible impact on business models and the competitive environment.

Compliments of Noerr, a member of the EACCNY