EU's digital single market faces headwinds, with easy progress already made

22 January 2018 9:08am
Eu Flag on Keyboard

17 January 2018. By Magnus Franklin.

Progress on the EU’s “digital single market” initiative is likely to slow down after a flurry of activity last year. With the low-hanging fruit already plucked, the European Commission’s aim of completing the package in 2018 could prove overly optimistic.

The unfinished part of the package consists of 15 bills put forward by the commission in 2016 and 2017. These include connectivity and e-Privacy rules for the telecom sector; updates to copyright and TV laws; and an assortment of rules on cybersecurity, e-commerce, digital contracting and e-government.

Estonia, which prides itself on its reputation as digital-economy pioneer, struck three deals in the second half of last year, when it held the EU’s rotating presidency, and made progress on many other files.

With three of the 15 files agreed between member states and EU lawmakers, and work done on several more, the work should be completed “by the end of 2018 at the latest,” according to the commission’s roadmap. Bulgaria should wrap up nine more dossiers during its turn in the presidency in the first half of this year, leaving Austria with just three in the second half.

But the bills were not created equal.

The first ones to be agreed include a law that simplifies cross-border deliveries, tighter regulations on geoblocking, and new VAT rules that make it easier to sell goods online. They’re all issues that European consumers can identify with, and which had fairly obvious solutions.

These bills will add to other digital consumer wins in recent years, including the famous “roam like at home” rule allowing citizens to use their domestic mobile tariffs throughout the EU, and rules allowing consumers to access online services such as Netflix outside their home country.

Altogether, they offer tangible benefits to citizens and won easy political backing, as lawmakers prepare for European Parliament elections in May 2019.

What’s left is a collection of technically difficult, and politically divisive, pieces of legislation.

Bulgarian officials have made clear that their presidency will focus on other policy areas. For example: getting countries in the western Balkans on the road to EU membership, new financial policy, and controlling the flow of external migrants. So they have little incentive to spend political capital on the more-difficult parts of the digital single market still on the table.

And in other member states, fatigue is setting in. Arguments are well-rehearsed, and the longer it takes to find a middle ground, the less attention governments are likely to pay to the dossiers.

Partial progress

Estonia managed to get a "negotiating mandate" from other governments to enter talks with lawmakers on several files: a new connectivity law, updated broadcasting rules, legislation to allow "non-personal" data to flow freely in the bloc, and a single digital gateway for government administration.

Bulgaria must now try to translate these mandates into a final deal during its six-month presidency, which began on Jan. 1. Failing that, it will pass the baton to Austria on July 1.

It won’t be easy. On the telecom bill, governments are staunchly defensive of EU meddling with frequency laws, and the bill is marred by traditional in-fighting between incumbent and alternative operators over rules for wholesale access to telecom networks.

The broadcasting, or "satcab" legislation as it is known in Brussels, has also sown deep divisions between those who support a traditional carve-up of TV rights, and others who see value in applying the "country of origin" principle paving the way for pan-European TV distribution. Politicians have so far been reluctant to soften broadcasting borders. And an update to the audiovisual law, negotiated in parallel, affects advertising rules and EU content quotas, which have also proved divisive. All in all, the bill is stuck.

Another bill on the free flow of data has become bogged down in the parliament, despite being given priority treatment from Estonia and other national governments. And the single digital gateway, which helps businesses find information about administrative procedures in other EU states in which they want to trade, has stayed in the shadow of more politically interesting dossiers.

Still in the starting blocks

Bulgaria will also have to do the heavy lifting on several other controversial laws where negotiations have barely begun. A copyright law has turned politically toxic after civil-rights groups said it would lead to unprecedented online monitoring.

An e-Privacy bill, rushed through the parliament, is seen as unraveling many of the delicate compromises struck in the EU's General Data Protection Regulation, which comes into force in May. Updates to contract laws online, and a new EU cybersecurity bill, further add to the workload.

Bulgaria, for its part, is sounding a note of caution, aiming for agreement only on the telecom bill and the data-flows proposal. For the other pending files, the presidency expects to finalize a lot of the legwork, leaving the final compromises — which are often the most difficult — to Austria.

To make things even more complex, the commission is also set to unveil fresh proposals this spring, including potentially controversial laws regulating the business-to-business contracts of online platforms, and a law on e-evidence, which will determine how and when Internet giants need to heed police requests for the data they hold. Fresh proposals have also been proposed recently on cybersecurity and supercomputing, adding to Bulgaria's workload.

When the European Parliament election season gets into gear toward the end of the year, lawmakers can rightly say that they have scored a raft of successes for European consumers. But it would take an extraordinary effort to get the other laws agreed, allowing them to claim they’ve created a single market online.

* Additional reporting by Vesela Gladicheva

CCPA Report