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Vera Demary IW News 6. May 2015

Digital Single Market: Nothing ventured, nothing changed

Europe needs the Digital Single Market: Digitization is spreading quickly and influences companies radically. Regulation, however, so far does not keep pace. There are still a lot of grey areas, national frameworks and cross-border digital services are often incompatible. Now, the European Commission strives to change that with its strategy for the Digital Single Market. Unfortunately, it is very general, albeit ambitious time-wise.

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In 2014, 90 percent of German companies across all industry sectors ventured that digitization influences their business processes. A major part of digitization is that it allows companies to network easily: Examples are networks of suppliers and manufacturers that often span across borders. The legal frameworks in the EU member states lag behind the possibilities of new technologies and digital developments in general, however. Property rights, data protection and data security, as well as standards for interfaces and cross-border regulation of online trading are prime cases in points.

The strategy for the Digital Single Market addresses those and other relevant aspects. It aims to

  • improve access to online goods and services for consumers and businesses.
  • create conditions for successful digital networks and services.
  • maximize the growth potential of the digital economy in Europe.

Accordingly, the content of the strategy is manifold. The EU Commission attempts to cover all relevant topics in one go. Yet, the listed measures are worded very general and the planned implementation until 2016 is more than ambitious. Consequently, the strategy might not be feasible. A comprehensive analysis of platform markets including the sharing economy is planned for 2015, for example. It is doubtful that specific measures can be determined within such a short time.

Europe needs more than just an expression of intent. Concrete proposals that provide legal certainty for businesses are essential. Barriers like restrictions to online trading have to be addressed quickly. Only then can European businesses profit from the possibilities of cross-border digital products and services and succeed in the competition with American companies.

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