Perhaps the best way to understand the EU's plan to create a so-called digital single market in Europe is to think about video streaming. Americans understandably take it for granted that if they’re from, say, California and go on holiday in New York, then their Netflix subscription will work just fine when they reach their hotel. But if someone from the UK goes on holiday in Portugal (less than half the distance between Cali and NYC), they'll find themselves locked out of their account, all thanks to the patchwork of European copyright laws, which require Netflix to negotiate rights for its shows one country at a time. This is the sort of problem that EU politicians want to fix.
The way to do this, they say, is by tearing down the digital barriers between the EU’s 28 member states. In plans that have been in circulation for months but were officially announced today, EU politicians laid out 16 key targets to make this happen. These points cover not only video streaming, of course, but touch on everything from cross-border parcel delivery to encouraging continent-wide telecoms companies. The end goal is to enforce a set of regulations that will not only make life easier for the EU’s 500-million-plus population, but also boost the prospects of European tech companies. It's also possible that some US companies will be investigated by the EU in the process — but it's worth remembering that what Americans tend to attack as "protectionism," Europeans are more likely to call "a level playing field."
Such plans were only really alluded to in the EU's official brief, described as the need to "comprehensively analyze the role of online platforms" such as search engines and social media. Such a broad description could cover a variety of actions, but it's previously been reported that this is likely to mean more probes into US tech companies. These probes could include looking at how paid ads appear in search results (something that would be separate to the ongoing antitrust case leveled at Google), how firms look after their customers' data, and whether the regulations governing "old media" companies should also apply to the digital new kids on the block. In the case of telecoms, for example, this might mean things like making VoIP services offer emergency calls, just like traditional phone companies do.
For EU politicians, the benefits of the digital single market are clear. The European Commission — the part of the EU responsible for promoting the interests of the European Union as a whole — claims that the digital single market would add €340 billion to Europe’s GDP and create 3.8 million jobs. The main driver of this growth, say analysts, would be fairly straightforward: extra customers. In the US, startups can hit the ground running, scaling quickly by hoovering up domestic users. But in the EU, companies have to negotiate their way through obstacles like differing tax codes before they can sell their wares to their neighbors.
"Too often US companies start investing in London in the hope of later on replicating their approach for continental Europe," says Forrester analyst Thomas Husson. "[But] this rarely happens this way because the European digital market is still way too fragmented." Removing internal barriers in the EU wouldn't only help European firms, but would also boost their US rivals. After all, if the European Commission had its way, Netflix would only have to sort out licensing in the EU once, for all 28 countries at the same time.
Husson notes that the same problems also hamper the growth of European companies within the EU, and points to the example of the telecom industry. Here, the growth of companies like Vodafone, Orange, and Telefonica has mainly come from markets outside of the EU. "The same could be said for e-commerce," he says.
However, while bringing some legal uniformity to the EU looks good on paper, it’s hardly an open goal. To return to the example of streaming media again, critics argue that getting rid of geo-blocking for the whole of the EU could actually be harmful. For a start, the current system allows media companies to pick and choose where they promote their content, using a country’s licensing fees to offset the cost of localizing shows or movies (there are 24 official languages in the EU after all). Some EU politicians even believe that Europe’s uneven copyright terrain acts as a natural barrier to foreign invasion. In February, the French government office dedicated to the EU warned that "overhauling the principle of territoriality […] could lead to the decay of European culture."
Whatever happens next, though, will only happen slowly. Proposals for the digital single market have been under discussion for years, and the EU’s economically and culturally diverse member states mean disagreements are guaranteed to hobble any negotiation. In addition, many of the laws under discussion go "well beyond economic issues," notes Husson. "This is also a political and societal debate." Rules about how personal data is handled, for example, are bound to run into trouble when countries like the UK and France continue to demand greater powers of surveillance in the name of security. But with the digital world so intertwined into all of our lives — both in Europe and in the US — no one can deny that these are problems that need tackling.
Comments
Europe is doomed with its obsession for restriction and 1000 laws for the same thing, instead of looking forward in the name of progress
By mikedemoda on 05.06.15 12:09pm
Yes it’s those obsessive restrictions and rules that have led to the EU countries having such high prices for broadband and phone contracts…..oh wait it’s the other way around.
By Luke Hopkins on 05.06.15 12:26pm
At the end of the day cheap broadband is meaningless if companies see little incentive in offering services to your market.
Europe has cheaper internet pricing. The US actually has a decent Netflix selection.
By My Only Name Change on 05.06.15 12:30pm
OP statement still is weird.
This whole Digital Single Market thing is to reduce all those rules, so Netflix an others can operate easier. It’s also not like we have so much more rules than the US, it’s just that we are 28 countries, where everyone has their own set of rules, that basically say the same, but not quite.
So what we try to do here is to create rules that apply to the whole EU, so the companies can adhere to these laws, instead of figuring out 28 different rules.
It’s also easy to bash EU for having that problem – but then again, we are not one nation like the US, we are 28, each with their own laws. EU only came after that, so we have to work hard to unify – and not everyone is on the same page all the time.
By VoxMediaUser1493029 on 05.06.15 12:40pm
US has a similar problem. Not all rules and regulations in US are the same in all states. Health insurance, investment and retail banking are good examples.
For example – I can open an account with SaxoBank in Europe and trade in more securities than any well known online broker does in US. Investment services in Europe are easy to get access to and that is a result of a common regulation.
By jalexoid on 05.06.15 6:02pm
Yes, single market for EU banking was already created a few years ago, it was not so before.
Still this is only one exception, mostly there are still many divides accross conutries.
By Lonsargg on 05.07.15 1:12pm
My point is that EU can wipe out the economic borders and US is not free from economic borders as well.
By jalexoid on 05.08.15 1:10am
One thing doesn’t have any to do with the other.
This regulation will actually open up the european digital market instead of having to deal with 24 distinct sets of regulation with smaller countries almost never receiving decent internet services because it’s only viable to bet on the bigger ones.
By Deckard Cain on 05.06.15 12:58pm
who cares about netflix when you have popcorn time
By Samir Dubois on 05.06.15 1:00pm
Maybe you mean this as joke? Some of us like to, you know, pay for stuff rather than stealing it…
By Mha71 on 05.07.15 5:48am
It’s a joke indeed, but the funny part is that if you’re from Europe you can’t pay for them even if you want to because "this content has been restricted in your country" by Hollywood corporations.
Hooray, liberty!
By devland on 05.07.15 6:51am
an other point is netflix is not that useful or needed in Europe.
By Oomu on 05.07.15 6:55am
I’d love to pay… but these people that setup the borders tell me that I can’t pay for it. At the same time spending a craptonne of money actually pushing their product into my face. (See Game of Thrones marketing and actual accessibility)
By jalexoid on 05.08.15 1:15am
Netflix availability has nothing to do with technology but rather with Hollywood distribution companies. Talk about backwards restrictions that prohibit progress, right?
By devland on 05.07.15 6:48am
it’s true that if we, at last, have an unified market for cultural goods, it will ease the job for Netflix.
By Oomu on 05.07.15 6:57am
netflix is not the end of all things
there is many services in Europe, and most important, the ones US citizens forget, the services by european providers
For example all internet providers in France installs a custom internet routers with tons of TV, pay per view, on demand and rentals contents. Loaded with local content and international (of course, mostly all US, we are human aren’t we ) movies, music and so on.
so, it’s not simply "cheap", it’s VERY efficient.
By Oomu on 05.07.15 6:54am
France is one thing, but then there are 27 more countries. Where most of them will never warrant same levels of coverage unless the rules are unified.
By jalexoid on 05.08.15 1:16am
I think what he means is, if barriers were ever truly lowered, the beneficiaries would of course be the biggest companies with the most brand name awareness: Google, Amazon and Netflix. The intent of this is to help EU companies compete with those guys, by creating a large market along the lines of America.
It helped Netflix enormously that they could gestate in a huge marketplace. That would never have happened in some little country. But the problem here is, to truly create an open marketplace will hurt EU companies, so are they going to do that? Hahaha, I have a bridge to sell you if you believe that.
By nerdrage on 05.06.15 12:34pm
There’s a lot of truth to that. But also it’s shortsighted. A well functioning market (which is not necessarily a completely deregulated market) is helpful to all companies in the end. Domestic and foreign companies.
That’s the main reason why the EU is starting this thing. In the last years it became evident that European internet companies are having a hard time competing because of all the regulations in different countries.
By bafford on 05.07.15 4:23am
"A well functioning market (which is not necessarily a completely deregulated market) is helpful to all companies in the end."
only if european companies can build a strong business BEFORE huge US juggernaut comes.
But to me, it’s already too late, ten years too late. Apple is already in Europe, quietly building whatever services and contents with Disney and others.
"In the last years it became evident that European internet companies are having a hard time competing because of all the regulations in different countries."
the problem is they can’t build a big audience even in Europe to sustain their growth and improvement because of complex regulation in each states.
We should do like China (to cheat all the time with international market laws ^^; ) but we are too honest : create a huge market first for local companies.
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To me, it’s impossible to fight US companies. because it’s not simply content and distribution ("hollywood") but also hardware and software.
Apple, Disney, Netflix, Intel, Microsoft, Google, Warner and so on : they may be in competition but they’re working together when pushing new technologies, new hardware to sell new contents.
For example, Europacorp, an european film producer would want new opportunities to sell its content. Who will be its computing and network partners ? An european telecom companies ? none has a global presence in software and cloud on Windows, Mac, Android.
An european hardware company selling a thriving computing platform with who to create an exciting catalog/player software ? none.
So, that company can try to push on internet routers like Orange or Free, for tv, yes.
But all the ipads, best androids phones, xbox and playstation of the work are using US technology and/or controlled by US/asian companies, already filled of american produced content.
Worse, mostly all new connected smart tv are now asians (and sometimes just american) with american software (android) and working with american companies for contents.
An US producer can work tightly with an other US hardware company : they are near, they share the same market, the same laws, the same language. It helps a lot to start something nicely integrated.
In Europe, we need more hardware companies and more software companies, more cloud companies, to be easier to work with.
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Only that month a french-german channel was added to the Apple TV. when there are dozens of US channels coming since 2014.
The USA understood a long time ago hardware and software works together, you have to control BOTH (at least, by the same country, at leas the intellectual property/abilities to create internally).
For all their faults, the US content industry understood the fight will be digital and about computing platform and so US has now an integrated industry, able to fight on both content, software and hardware.
European industry is disorganized, rogue companies working alone, difficult and fragile deals to publish contents from an european company on some network from an other company, and slowly, never before a similar US offering.
No more big consumer european hardware maker to work tightly with european content.
The loss of Nokia for the US-based company Microsoft is a huge blow to Europe’s ambitions. One more european consumer hardware player lost. One more platform maker which will now work first with american contents.
it’s simply too late. The US was smarter and focused a long time ago.
Or Europe should first build domestic market, to recreate big hardware industry able to compete with US and Asia for chips, operating systems, and so on. We need europeans google-disney-apple-intel and to support them both politically and with money. More STMicroelectronics.
In fact we need to give up on national pride and create true european-sized companies for content AND computing. not simply "internet" but HARDWARE too.
I’m not sure we could simplify AND open the whole market now without be destroyed (I mean, Disney buying EVERY publishers ^_- and stomping France.).
By Oomu on 05.07.15 7:33am
You don’t get it is NOT about existing markets and companies, it about 10+ years longterm benefits.
Its about making possible that a new Netflix is born in EU instead of America.
And also don’t forget, this is not only about companies, it is a BIG plus for consumers!
By Lonsargg on 05.07.15 1:19pm
He means that, by necessity, if you want these long-term benefits, you’ll need some way to quickly incubate these native companies in order to inoculate against foreign companies that would immediately dominate an open Europe. That way will inevitably be some form of protectionism because emulating China’s model of studying and spring-boarding off incoming IP isn’t going work when the U.S. is still Europe’s largest trading partner. Ultimately, Europe’s concept of a "fair playing field" will come at the present and future expense U.S. companies, and more people than just those employees are going to be justifiably angry about it.
In the meantime, Europe will continue grinding away at the fundamental barriers that continue to hold back its true potential. Too bad we’ll be celebrating the 100th anniversary of the end of World War II (or rather of the near-complete financial collapse of Europe) before it’s all said and done.
By Dante of the Inferno on 05.10.15 3:01am
They will hurt companies that thrive in closed environments, but the goal is to make it easy for other companies to create culturally diverse products like few American companies can.
By jalexoid on 05.08.15 1:19am
Yes US controlled by corporations and secret agencies is better. In US laws are prepared for corporations as they like them to be as lobbying is perfectly legal.
By naos__ on 05.06.15 12:36pm
Exactly in EU lobbying is ilegal(mostly for now) and it should be!
I mean lobbying is another word for paying politians to do your bidding.
By Lonsargg on 05.07.15 1:20pm