The EU recently unveiled plans for a Digital Single Market (DSM). These regulations will affect all aspects of online business, from e-commerce through to copyright rules, and is designed to create a level playing field in which smaller UK tech businesses will be able to compete with digital Goliaths such as Google and Facebook.
The Digital Single Market builds on the European Commission’s “Digital Agenda”, and consists of three pillars designed to allow businesses to operate in a joined up digital marketplace across Europe:
- enabling better access to online goods and services across Europe
- creating the right conditions for digital networks and services
- maximising the growth potential of the European “Digital Economy”
This approach is designed to support EU tech talent because it implements a single EU law, intended to remove fragmentation and ‘smooth’ the user experience for digital services across borders.
The timeline for implementing the DSM is short; the rules are due to come into play over the next 12 - 18 months. This ambitious timeline means that UK technology businesses need to delve into the ruling and what it means for their organisations now. Then they can make any necessary changes to the way they operate to be able to take advantage of the opportunities the DSM presents once it is implemented.
Here are the four main issues that businesses should be aware of:
- Rules on the purchase of online content
Businesses providing online content will benefit from the knowledge that they’ll have only one set of rules to follow to sell in to markets across Europe, rather than separate sets of rules for individual territories. Sectors like ecommerce will be affected in numerous ways. The DSM will simplify the VAT rules governing commerce across the EU, incorporating the use of single electronic registration and payment. The idea is that as more businesses offer international services online and provide great customer experiences, consumers should have more confidence in shopping abroad.
- Preventing unjustified geo-blocking (the denial of access to websites in other countries)
This means that people visiting other European countries will have access to content from other European nations and means the start of truly cross-border content which is open to all under the same rules. Digital content providers in the UK are being urged by the EU to make their content available across the EU, whereas at the moment users are often blocked from accessing these sites from other markets. The BBC has said it will look into how iPlayer restrictions might be eased, and the organisation is also reportedly looking into the technical and legislative implications of these changes.
- Modernising the copyright framework to deal with the issues raised by mobile devices and increased spend on digital content
Copyright often prevents consumers from using content services across national borders within the EU or on multiple devices. The EU wants to promote innovation through research and states that copyright laws hampers this “because of an unclear legal framework.” The DSM aims to let researchers and educational institutions make wider use of copyright-protected material.
- Reinforcing trust and security in digital services and handling personal data
At the moment many companies have complicated and obscure privacy policies buried at the bottom of their websites or hidden in terms of service. But the new General Data Protection Regulation (GDPR) will seek to change all that, and build consumer trust in how businesses store and use their data. All companies will need to look carefully at the processes and controls which surround their services and their use of their consumers’ personal data.
- Act now
Ignoring the implications of the DSM even at this stage would be a significant error for a UK tech company. Businesses should start reviewing how they operate with regards to this regulation now so that they are fully prepared to comply with and maximise the potential business value which can be extracted from changes in the legislation.
In addition, acting now means that businesses have the power to shape the DSM via lobbying and trade associations. For example, online retailers looking to benefit from cross-border commerce could look to join EuroCommerce which has long campaigned for the promotion of digital skills and simplified VAT arrangements.
Many existing laws could be seen as “analogue legislation in a digital age” but the DSM is a complex and ambitious bid to bring the law up-to-date. Gaining expert advice on how to interpret this regulation will allow companies to exploit the new opportunities that the increased openness and portability will provide, while ensuring compliance at the same time.
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