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The Sorry State Of The Digital Union

· September 18, 2017

When European Commission President Jean-Claude Juncker gave his State of the Union last week, he called the rise of the continent’s long dormant economy a sign of clear skies. In a burst of rhetorical flourish, Juncker proclaimed that “the wind is back in Europe’s sails”!

But for Europe’s digital economy, the wind is blowing in the wrong direction. Back in 2015, the Commission launched an ambitious reform plan. A wave of proposals – including a revamp of copyright and an overhaul of telecom rules – promised to build a thriving European digital single market.

Since then however, only a few successes are visible: Consumers won this past summer when telcos were forced to stop gouging them with expensive data roaming charges. A new proposal could end national data localisation rules which harm competition and block startups from scaling up.

Overall, though, Juncker’s digital Europe is drifting way off course, imposing heavy-handed, inappropriate regulations. Instead of creating a unified digital single market encompassing more than 500 million consumers, Juncker’s misguided policies are fragmenting it. New European regulations threaten to be ineffectual or, worse, to throttle business and innovation.

Consider the European success story Skype. Until now, all Europeans enjoyed equal access to these types of free or nearly free online messaging services. New telco rules will oblige these messaging apps to register in each of the 28 different EU member states and comply with inappropriate telephone era rules such as obligatory connections to emergency services. In response, companies may end up being forced to shut down and block their popular messaging services in small countries.

The EU’s audio-visual proposal also runs counter to the goal of a single market. Currently, streaming video providers operate under a single set of home country rules. The new audiovisual proposal forces them, in potentially all 28 member states, to subsidize local national productions and to comply with national content quotas of probably 30%. This, too, is a disincentive to serve smaller national markets. 28 national rules, versus one today makes it all but impossible for European startups to scale up their activities across the EU. It’s a giant missed opportunity.

Just as businesses rush to comply with Europe’s new broad data protection framework, Juncker has proposed new, incompatible provisions for communications. This e-Privacy regulation, if adopted, would make it almost impossible to offer innovations as instantaneous spell checkers or translation tools.

In coming months, Brussels’s interventionism threatens to undermine the Internet’s basic building block – the e-Commerce directive, which since 2000 has set clear limits on liability for digital platforms. Under the e-Commerce directive, online companies aren’t held responsible for material uploaded by users to their sites. Instead, they are responsible only for bringing down illegal material when informed.

Without this protection, many of the Internet’s success stories would never have gotten off the ground. Imagine if DailyMotion were held responsible for every upload, Blogger for every blogpost, and TripAdvisor for each restaurant or hotel review? Much user-generated content would suddenly have been too dangerous to publish.

A copyright proposal is hotly debated as it will make all hosting websites directly liable for content uploaded by their users and force companies to actively monitor user behavior. This would violate European fundamental rights. The proposal also includes what critics have called a “link tax”, a proposal which has already failed in Spain and Germany.

These rules threaten to force Internet platforms to err on the side of caution and surveil users. There’s another word for such actions – censorship. Is this handcuff on Internet freedom what Mr. Juncker wants for his rejuvenated, newly confident Europe?

I hope not. Internet companies must take additional responsibility – and they are increasingly doing so. But let’s keep true to the initial promise of the Internet as a vehicle to promote free speech, innovation, growth and consumer choice.

A true European Digital Single Market remains a laudatory goal. But when European leaders convene at the Tallinn Digital Summit later this month, they should acknowledge that Europe’s digital agenda has drifted dangerously off course under Captain Juncker’s watch.

European Union

DisCo is dedicated to examining technology and policy at a global scale.  Developments in the European Union play a considerable role in shaping both European and global technology markets.  EU regulations related to copyright, competition, privacy, innovation, and trade all affect the international development of technology and tech markets.