European Union: Cometh The Hour, Cometh The (Imminent) European Internet

Last Updated: 19 January 2012
Article by Vanessa Barnett

Revolution, what revolution?

"The Internet has revolutionised the everyday lives of Europeans in a way comparable to the industrial revolutions of the previous centuries. Electronic commerce and online services in the broader sense are now at the heart of lives of consumers, businesses (from the largest to the smallest) and citizens in general. The way they compare, purchase and sell goods and services, the way they search for information or make it available, the way they manage their payments and their data, the way they learn and train, the way they interact, exchange and share is not the same as it was five, let alone ten or twenty years ago."

(Opening paragraph of the Commission Communication on coherent framework for building trust in Digital Single Market for e-commerce and online services ("Communication") published on 11 January 2012)

You may well say that this revolution already happened in 2000. But according to the Commission, it's only just begun and we've much left to do.

Where we are today

The view of the Commission is that we have enormous potential which European businesses and consumers are not yet realising. The Internet economy in Europe was 3% of its GDP in 2010 and although it is growing, that growth rate is not fast enough to achieve the aims of the European Union.

The Commission has identified a "patchwork of different laws, rules, standards and practices, often with little or no interoperability" which undermine growth and create an environment where suppliers and consumers are discouraged from cross-border trade.

Obstacles to growth

The five main obstacles to growth identified by the Commission are:

  • The supply of legal, cross border online services remains inadequate
  • There is not enough information for online service operators or protection for Internet users
  • Payment and delivery systems are still inadequate
  • There are too many cases of abuse and disputes that are difficult to settle
  • Insufficient use is made of high speed communications networks and hi-tech solutions.

The Commission uses the labels "Internet", "online services" and "e-commerce" to cover a wide range of activities, covering not just Internet shopping but essentially any services facilitated by Internet/mobile technology.

Overcoming obstacles to double growth

The Communication sets out a specific action plan to overcome these obstacles, with the aim of doubling the contribution of e-commerce to the EU economy. These are:

  • Take steps to provide better access to different kinds of online services for consumers across the EU, which involves:
    • Getting better application of certain consumer laws (e.g. Ecommerce Directive and other Directives which protect consumers online)
    • Implementing a strategy for intellectual property rights, including initiatives on private copying and a wider review of copyright in the information society
    • Reporting on the consultation on online distribution of audiovisual works
    • Ensuring new rules on selective distribution are "rigorously applied".
  • Make it easier to buy and pay for products online, including initiatives which will develop the market for payments by card, Internet or mobile phones (a separate Green Paper has been published on this).
  • Make the delivery of products across Europe more efficient and affordable, in particular by identifying and overcoming cross-border delivery problems encountered by businesses and consumers.
  • Have more transparency on companies and prices on the Internet and better consumer protection, which involves:
  • Improving training for traders to better understand obligations
  • Encouraging price comparison sites on a cross-border basis
  • Enabling enforcement of consumer legislation across Europe
  • Adopting a "European Consumer Agenda" this year to guarantee appropriate consumer protection online
  • Having a European action plan for online gambling which focuses on European co-operation, consumer protection and the development of a legal Market
  • Ensuring adequate protection of patients purchasing medicine online, including trust marks.
  • Have better protection against abuses on the Internet by:
  • Adopting notice and action/take down procedures
  • Having an overall strategy for Internet security in Europe that will increase protection against cyber attacks.
  • Enable citizens to have better high speed Internet and better communication infrastructure for more citizens by:
  • Adopting recommendations on access pricing schemes in the wholesale market to stimulate investment in fibre deployment
  • Implementing a radio spectrum policy programme
  • Adopting an overall strategy on cloud computing

Implementing the revolution

A Communication is a non-binding recommendation, but is highly influential. More detail on each item is set out in the Communication, including the various individual next steps to drive forward the policies at EU level.

Does it matter?

This is the first time the EU has taken such a detailed and 'joined up' look at the online/mobile market. The tone of the Communication is supportive of trade rather than the creation of more red tape – in other words, the revolution is coming and it will pay to take advantages of the opportunities offered. This applies to all forms of stakeholders in the Internet economy, ranging from communications providers to consumer facing businesses like supermarkets and media companies.

Not convinced? Perhaps this will put it into context: the global e-commerce market is worth €6 trillion.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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