EU Digital Single Market Should Promote Not Inhibit Digital Economy

May 5, 2015

WASHINGTON (May 5, 2015) – In advance of the release of the European Union’s Digital Single Market policy, Robert Atkinson, president of the Information Technology and Innovation Foundation (ITIF), releases the following statement:

The European Commission is taking an important step with its proposal to create a digital single market (DSM) for Europe. For too long, the fragmented policies of the EU’s 28 member states have held back the development of a unified digital market in Europe. The DSM’s elimination of barriers to the delivery of digital goods and services within the EU is good for European consumers, businesses, and the economy as a whole.

However, ITIF has several concerns with the proposal as drafted. First, it appears to seek ICT regulations and standards that would create a single market for Europe at the expense of the global digital economy. The DSM should be a pathway towards integrating Europe into the global Internet economy, not a strategy for isolating Europe from the rest of the world. In particular, the EU should avoid developing European-only, government-led technology standards. When other nations have attempted this, the results have been bad for all concerned.

Second, while the proposal recognizes the importance of new ICT services and business models, including electronic communications technologies, digital platforms, and digital content providers, the EU appears to want to regulate these 21st technologies to fit 20th century regulation. For example, instead of subjecting Internet platforms to new regulation, the Commission should ensure that rules against particular harmful actions apply to all parties, whether platform or non-platform. The DSM should be used to tear down outdated policies on media and telecommunications, rather than expand regulations to emerging platforms, technologies, and content.

In addition, as ITIF has written, the proposal to prohibit geo-blocking will likely harm at least some consumers of digital content, while the unwillingness of the Commission to take a stronger stand on copyright enforcement shows a poor respect for intellectual property.

Having said that, there is much in the proposal that will help Europe move forward in the digital economy. The Commission proposal rightly recognizes the importance of spurring digital transformation of all sectors. This is a key avenue for enhancing EU productivity.

In addition, it appears that the Commission recognizes that its long-standing telecom policy of unbundling has held back inter-modal broadband competition and hampered investment. In particular, the Commission should be praised for seeking to “inject greater ambition” in the process of achieving a telecom single market, particularly with regard to spectrum reform.

Finally, the Commission should be praised for clearly and unequivocally stating that “any unnecessary restrictions regarding the location of data should be removed and prevented.” We hope that the Commission will apply this ambition to upcoming negotiations over the Transatlantic Trade and Investment Partnership.