The EU is struggling to realise the potential of the internet to boost the European economy.
The European Council will next week be looking for ways to deliver jobs and growth to the ailing European economy. One much talked-about route, which has yet to deliver on its potential, is the development of a digital single market.
In theory, an electronic single market would open up myriad opportunities for businesses to supply goods and services – whether to other businesses or to retail customers – that they cannot currently reach.
The European Commission published a fortnight ago (13 January) an action plan for a digital single market that sets an objective of doubling the internet’s share of retail sales by 2015, from the current paltry level of 3.4%. Another aim is to double the internet’s contribution to the European Union’s gross domestic product (GDP).
“In the difficult circumstances facing Europe we must seize every source of activity and new jobs as a matter of urgency,” said Michel Barnier, the European commissioner for the internal market and services. He was one of three commissioners at the launch – accompanied by Neelie Kroes, the European commissioner for the digital agenda, and John Dalli, the European commissioner for consumer policy – reflecting the breadth of issues that are involved in constructing a digital single market. The action plan was accompanied at its publication by two significant annexes. One is a review of the e-commerce directive, which dates from 2000. The other is, at its core, a survey of attitudes to doing business online.
Commission research suggests that one in five people shopping online in the EU had experienced problems and that consumer reluctance was seriously holding back growth in the sector. Almost half of all consumers questioned said that they were wary about undertaking cross-border transactions because of worries about delivery. They said that uncertainty about remedies if the item was not delivered or was damaged in transit was deterring them from online purchasing.
Even in countries where broadband internet is widely available and reliable postal deliveries and secure methods of payment exist, shoppers are reluctant to make purchases online across borders.
Businesses are demanding urgent action. According to a study conducted by Accenture for the European Retail Round Table (ERRT), released on 17 January, retailers believe the EU’s diverse laws and regulations are obstructive. A quarter of them believed that, if they could sell more effectively online, revenues could be increased by 25%.
Digital single market action plan – the main points
The European strategy for intellectual property rights will be “quickly implemented”, with the Commission conducting a review of the directive on copyright in the information society this year and presenting a legislative initiative on private copying in 2013.
By the middle of this year the Commission will issue a report on the outcome of the consultation on the online distribution of audiovisual works.
Officials want to make it easier to buy products online, by card and by smartphone. The Commission’s e-payments green paper was published at the same time as the digital single market action plan.
The Commission is to investigate how postal delivery can be improved and made less expensive. Officials see this as an integral part of any e-commerce strategy. The Commission is to launch a consultation on parcel delivery, presenting conclusions by the end of 2012.
The Commission wants to see more company information on the internet and greater transparency about prices. The development of transparent, cross-border, price and quality comparison sites “will be encouraged”. A ‘European consumer agenda’ is going to be adopted this year, which will propose action to guarantee an appropriate level of information and customer care online.
The Commission wants to strengthen the capacity of the consumer protection co-operation network, which consists of national authorities enforcing consumer legislation.
The Commission is to present a European action plan for online gambling this year.
The internal market information system and the consumer protection co-operation network will be extended to ensure the correct application of the e-commerce directive and other directives protecting consumers online.
There will be more work done to boost the protection for patients purchasing medicines online through the application of the directive on falsified medicines. This will include contributing to the creation of ‘trust marks’ to allow the identification of legal websites.
The Commission is to propose a strategy this year for internet security that it says will increaseprotection against cyber attacks.
This year will see a Commission recommendation on pricing of telecoms infrastructure, which it says will stimulate investment in the fibre-optic cable that is needed for very high-speed broadband.
The radio spectrum policy programme, laying out which parts of the spectrum can be used for mobile broadband, should be implemented this year.
The Commission is to adopt an overall strategy on cloud computing this year.
E-payments
Easy and secure means of paying for goods are vital for a successful internet economy. The European Commission has also published a consultation document including a number of proposals to boost e-payments. It looks at what needs to be done to make the market more competitive and increase transparency.
The Commission also asks how to improve and accelerate the standardisation and interoperability of payments by card, over the internet and by mobile phone. It also questions how the level of security and data protection can be improved.
The Commission is to present conclusions of the consultation by the middle of this year.
Obstacles
The European Commission says there are five main obstacles to a true digital single market:
Too few legal online services that work cross-border within the European Union.
Insufficient protection for consumers and information for online service operators.
Too many cases of abuse and disputes that are difficult to settle.
Lack of high-speed communication networks.
Inadequate payment and delivery systems.
“The faster any obstacles can be removed, the sooner retailers will be able to boost the digital single market and bring added benefits to European consumers,” said Dick Boer, president of the ERRT. He suggested an ‘e-commerce test’ for a targeted set of European legislation and for all new relevant proposals.
Boer cited specific policies that he believed could be improved, including the treatment of electronic waste, contract law, consumer rights and labelling legislation, which are implemented differently in member states. “The differences in these national regulations become a real handicap and create uncertainty when a retailer sets up a cross-border e-commerce operation,” he said.
The plan also includes initiatives aimed at ensuring that high-speed internet reaches as many people as possible. According to the Commission, an investment in infrastructure of €180 billion-€270bn, which it says cannot be met by traditional telecom providers alone, is needed to modernise the internet infrastructure in Europe. Commission officials say the mix of public and private funds, the use of new financial instruments and the adoption of new investment models will provide new opportunities for investment.