Roundup: Obstacles to EU digital single market remain

The European Union (EU) wants to step up its single market in digital services, but many obstacles remain before it can truly be realized.

On Tuesday Members of the European Parliament (MEPs) discussed the plan set out by the European Commission to make it easier for businesses and consumers in the EU to trade online across national borders.

Some 315 million Europeans use the internet every day, and the Commission says a digital single market could create up to 415 billion euros (462 billion U.S. dollars) in additional growth and hundreds of thousands of new jobs.

But cross-border e-commerce remains fraught with difficulties. The digital market in Europe is currently made up of national online services (42 percent) and U.S.-based services (54 percent). EU cross-border online services represent only 4 percent of the market.

Just 15 percent of consumers bought online from other EU countries in 2014, while 44 percent did so domestically.

Small online businesses wishing to trade in another EU country face an annual VAT compliance cost of at least 5,000 euros for each Member State where they want to provide services. Businesses also face around 9,000 euros in extra costs in order to adapt to Member State national laws.

Not surprisingly, only 7 percent of small and medium-sized enterprises in the EU currently sell across national borders. If the same rules for e-commerce were applied in all EU Member States, 57 percent of companies say they would either start or increase their online sales to other EU countries, a Commission survey found.

The European Commission's strategy for completing the digital single market, unveiled on May 6, comprises a three-step approach.

First, it wants new rules to make cross-border e-commerce easier. This includes harmonised EU rules on contracts and consumer protection when consumers buy online.

Second, the Commission proposes an ambitious overhaul of EU telecoms rules. It will also analyze online platforms, like search engines and social media, covering issues such as the non-transparency of search results and pricing policies.

Finally, to exploit the growth potential of the digital economy the Commission wants to promote the free movement of data in the EU, stating that sometimes new services are hampered by restrictions on where data is located that have nothing to do with protecting personal information.

Addressing the EP, Andrus Ansip, the commissioner responsible for the digital single market, said the proposed strategy should help to prepare Europe for "a bright digital future."

He added that the initiatives must be taken together as a package. "If we only succeed in putting half of them into effect then we will not end up with a true digital single market," he said.

"I hope all EU institutions will agree on a clear timeline for taking this project forward. We have just 18 months to prepare and take all the key decisions," he added.

British MEP Vicky Ford, speaking for the European Conservatives & Reformists (ECR), said: "Unlocking the benefits is key to driving competiveness, jobs and growth. The Commission strategy is good in parts but needs more work in others. The digital market is a global market and building a fortress around Europe will not work."

French center-right MEP Francoise Grossetete noted that the digital single market should spur growth in all member states. "Either Europe gets on board or it simply becomes a digital colony," she said. "We shouldn't just be consuming in Europe, we should be creators."

But, one issue that could meet strong opposition from content providers, such as film and television companies, is the Commission's wish to reduce differences between national copyright regimes and allow for wider online access.

Currently, many consumers who subscribe to domestic online services for films and TV cannot access these same services when they are travelling in other states -- so-called "geo-blocking." The Commission wants to ensure that users who buy films, music or articles at home can also enjoy them while travelling across Europe.

But many EU states are wary of this because their own multimedia companies pay substantial fees to foreign TV networks for the right to broadcast others' films and programs in their own markets. They potentially could lose millions of euros if this territorial exclusivity is ended. Enditem