Seeing the Forest for the Trees: Why the Digital Single Market Matters for Transatlantic Relations

Rob Atkinson writes for the German Marshall Fund that many of the European Commission’s proposals under the Digital Single Market seek to achieve one goal that will make it harder to achieve other goals.

The European Commission has embarked on an ambitious journey to create a seamless 28-country market for all digital goods and services in Europe. It is a journey that carries great hopes and expectations, because while there has been considerable progress since 1992 in establishing a single European market for goods, there are still significant barriers to a digital single market (DSM), which the Commission’s proposals attempt to overcome.

One of the barriers might be the logic of the endeavor itself. What is the European Commission really seeking to achieve through a digital single market? Why will market forces not be enough? Despite an array of speeches, op-eds, and reports from the Commission and Parliament, the answers remain anything but clear. The document announcing the DSM raises as many questions as answers when it states:

A Digital Single Market is one in which the free movement of goods, persons, services, and capital is ensured and where individuals and businesses can seamlessly access and exercise online activities under conditions of fair competition, and a high level of consumer and personal data protection, irrespective of their nationality or place of residence. Achieving a Digital Single Market will ensure that Europe maintains its position as a world leader in the digital economy, helping European companies to grow globally.

Here and throughout the document, the European Commission alludes to three distinct, goals: 1) to make Europe a leader in digital industries, with the subtext of replacing U.S. digital industry leaders with European ones; 2) to protect consumers in areas such as privacy and prices based on competitive markets; and 3) to spur information and communication technologies (ICT) adoption by all industries in Europe. The problem, however, is that these goals as outlined are contradictory. Many of the Commission’s proposals to achieve one goal (for example, privacy protection) will make it harder to achieve other goals (such as having the EU become a digital industry leader). Pushing for stronger European digital companies could come at the expense of stronger ICT adoption by businesses and consumers. In fact, a number of the measures to achieve any one goal will make it harder to achieve both of the other two.

Unfortunately, the debate in Brussels has largely ignored these contradictions, reflecting the fact that policymakers believe that they can “have it all.” They cannot have it all, but they can make important progress by focusing on the most important goal: fostering more ICT adoption. And if the Commission wants to best achieve that goal, it should pursue a bolder digital agenda that would include new policies for broadband industry consolidation, accept disruptive innovation, and capitalize on public-private partnerships, among other things.