Digital Single Market Strategy: IT Law Highlights

May 5, 2015

You can access the full document here. We set out edited highlights below.

Cross-border Rules for Consumers and Businesses in E-commerce

Immediate action is required to break down barriers to cross-border online activity including differences in contract and copyright  law between Member States. …… In a single market, companies should be able to manage their sales under a common set of rules. 

… the Commission…will make a modified legislative proposal to take the law of the seller as the point of reference while harmonising the main rights and obligations of the parties to a sales contract; and provide remedies for non-performance and the minimum periods for the right to a legal guarantee. …

There is also a need for more rapid, agile and consistent enforcement of the rules to make consumer rules for online and digital purchases fully effective. The Commission will clarify and develop the powers of enforcement authorities and improve market surveillance and alert mechanisms to detect infringements faster. 


The Commission will make a modified proposal before the end of 2015 covering (i) harmonised EU rules for online purchases of digital content and (ii) the application of the trader’s national law with a focused set of key mandatory EU contractual rights for domestic and cross-border online sales of tangible goods.

The Commission will review the Regulation on Consumer Protection Cooperation3 and develop more efficient cooperation mechanisms. 


in many cases online geo-blocking is not justified. These practices should be prohibited so that EU consumers and business can take full advantage of the single market in terms of choice and lower prices. 


The Commission will make legislative proposals in the first half of 2016 to end unjustified geo-blocking. Action could include targeted change to the e-Commerce framework, assessment of the application of Article 20 of the Services Directive and a review of the Unfair Commercial Practices Directive.

In parallel the Commission is launching a Competition Sector Inquiry focusing on the application of competition law in this area. 


Restrictions on access to online media content are still common, particularly for audiovisual programmes. Many times when consumers cross an internal EU border copyright reasons are used to prevent them from using the content services (e.g. video services) for which they have paid in their home country.

There is a need for legal certainty which will enable researchers and education institutions to make wider use of copyright-protected material, including across borders, allowing them to benefit from the potential of these technologies and cross-border collaboration.

A more effective cross-border civil enforcement system against commercial scale infringements of intellectual property rights is central to investment in innovation and job creation. In addition the conditions for the use of copyright protected works by online intermediaries require clarification, given their growing involvement in content distribution. 


The Commission will make legislative proposals before the end of 2015 to reduce the differences between national copyright regimes and allow for wider online access to works by users across the EU, including through further harmonisation measures. The proposals will include: (i) full portability of legally acquired content, (ii) uninhibited access to legally paid for cross-border online services while safeguarding the value of rights in the audiovisual sector, (iii) greater legal certainty for the cross-border use of content for specific purposes (e.g. research, education, text and data mining) through harmonised exceptions, and (iv) launching a process to modernise the cross-border enforcement of copy right, initially focusing on commercial-scale infringements and the ‘follow the money’ approach. 


The complications of having to deal with many different national systems [on VAT] represent a real obstacle for companies trying to trade cross-border both on and offline.

… [the] electronic registration and payment system … should be extended to tangible goods ordered online.

Currently goods ordered online from a third country can benefit from the small consignment import exemption to ship its goods VAT free to EU private customers. This gives them a competitive advantage over EU suppliers and market distortions have already been signalled in various Member States.

… as regards direct taxation, the Commission will shortly present an Action Plan on a renewed approach for corporate taxation in the Single Market, under which profits should be taxed where the value is generated, including in the digital economy. 


The Commission will make legislative proposals in 2016 to reduce the administrative burden on businesses arising from different VAT regimes including (i) extending the current single electronic registration and payment to cross-border online sales of tangible goods, (ii) introducing a common EU-wide simplification measure (VAT threshold) to help small startup e-commerce businesses, (iii) allowing for home country controls including a single audit of cross-border businesses for VAT purposes and; (iv) removing the VAT exemption for the importation of small consignments from suppliers in third countries. 


The telecoms sector is the backbone of digital products and services which have the potential to support all aspects of our lives, and drive Europe’s economic recovery. Successive adaptations of the EU’s telecoms rules as well as the application of the EU competition rules have been instrumental in ensuring that markets operate more competitively, bringing lower prices and better quality of service to consumers and businesses. However, the sector still suffers from fragmentation along national lines, a lack of regulatory consistency and predictability across the EU, particularly for radio spectrum, and under-investment, problems which will not be fully resolved in the context of the ongoing discussions on the Telecoms Single Market package.  


The Commission will present proposals in 2016 for an ambitious overhaul of the telecoms regulatory framework focusing on (i) a consistent single market approach to spectrum policy and management (ii) delivering the conditions for a true single market by tackling regulatory fragmentation to allow economies of scale for efficient network operators and service providers, (iii) ensuring a level playing field for all market players in the market and consistent application of the rules, (iv) incentivising investment in high speed broadband networks (including a review of broadband obligations in the context of the Universal Service Directive) and (v) an effective regulatory institutional framework.

The Commission will review the Audiovisual Media Services Directive focussing on issues such as the roles and responsibilities of all market players, measures for the promotion of European works, advertising and protection of minors. 

‘Online platforms’

Although their impact differs depending on the types of platforms and their market power, some online platforms can control access to the benefits of the Internet and can exercise significant influence over the how various players in the market are remunerated. This had led to a number of concerns over the growing market power of some platforms. These include a lack of transparency in the way they use the information they acquire, strong bargaining power compared to that of their clients, promotion of their own services to the disadvantage of competitors, potentially unfair terms of conditions (particularly for SMEs), and nontransparent pricing policies, or restrictions on pricing and sale conditions. 

… the removal of illegal content can be slow and complicated while content that is actually legal can be taken down erroneously. … Differences in national practices can impede enforcement (with a detrimental effect on the fight against online crime) and undermine confidence in the online world. … It is not always easy to define the limits on what intermediaries can do with the content they host without losing the immunity conferred on them by the e-Commerce Directive. 


The Commission will launch before the end of 2015 a comprehensive assessment of the role of platforms, including in the sharing economy, which will cover issues such as (i) transparency i.e. in search results (involving paid for links and/or advertisement), (ii) platforms usage of the information they acquire, (iii) clarifying the conditions for the use of copyright protected content by intermediaries (iv) constraints on the ability of individuals and businesses to move from one platform to another, and will analyse (v) how best to tackle illegal content on the Internet. 


Cybercrime is a borderless problem and a threat to citizens’ fundamental rights and to our economy and society at large.

…The EU is committed to the highest standards of protection of personal data and privacy and to providing enforceable rights for its citizens and authorities. A major step will be achieved once the new general EU rules on data protection are agreed and come into force. Special rules apply to electronic communications services (e-Privacy Directive) which may need to be reassessed once the general EU rules are agreed, particularly since most of the articles of the current e-Privacy Directive apply to providers of electronic communications services… 

In the first half of 2016 the Commission will propose to establish a Public-Private Partnership on cybersecurity in the area of technologies and solutions for online network security.

Once the new EU rules on data protection are agreed, which should be by the end of 2015, the Commission will review the ePrivacy Directive with a focus on ensuring a level playing field for all market players.


A fragmented market does not provide sufficient scale for cloud computing, Big Data, datadriven science and the Internet of Things to reach their full potential in Europe. … Restrictions, such as those related to data location (i.e. Member States requirements to keep data inside their territory) force service providers to build expensive local infrastructures (data centres) in each region or country. Fragmented implementation of copyright rules and lack of clarity over rights to use data further obstruct the development of cross-border data use and new applications of technologies (e.g. text and data mining). The lack of open and interoperable systems and services and of data portability between services represents another barrier for the cross-border flow of data.

Businesses and consumers still do not feel confident enough to adopt cross-border cloud services for storing or processing data due to concerns relating to security, compliance with fundamental rights, and data protection more generally. … contracts often exclude, or severely limit, the contractual liability of the cloud provider if the data is no longer available or is unusable, or they make it difficult to terminate the contract. This means that the data is effectively not portable. In the field of data protection, both the current and the future legislative frameworks prevent restrictions to the free movement of personal data within the Union. 


The Commission will propose in 2016 a ‘Free flow of data’ initiative that tackles restrictions on the free movement of data for reasons other than the protection of personal data within the EU and unjustified restrictions on the location of data for storage or processing purposes. It will address the emerging issues of ownership, usability and access to data in situations as business-to-business, machine generated and machine-to-machine data. The Commission will launch a European Cloud initiative including cloud services certification, switching of cloud services providers and a research cloud. 


Standardisation has an essential role to play in increasing interoperability of new technologies within the Digital Single Market. It can help steer the development of new technologies such as 5G wireless communications, digitalisation of manufacturing processes, data driven services, cloud services, cybersecurity, e-health, intelligent transport systems and mobile payments. 


The Commission will launch an integrated standardisation plan to identify and define key priorities for standardisation including essential sectoral standards in areas such as health (telemedicine, e-health), transport (transport planning, e-freight) and energy (smart metering). 


Online public services are crucial to increase the cost-efficiency and quality of the services provided to citizens and companies. …E-government services that are being developed in different Member States should be able to communicate with each other and not develop in isolation. 

The Commission considers that any established company should be able to expand its operations cross-border online and be pan-European within a month building on the interconnection of business registers and the ‘Once-Only’ principle.


The Commission will present a new e-Government Action Plan 2016-2020 which will include (i) making mandatory interconnection of business registers a reality by 2017 (ii) proposing to make the European Interoperability Framework mandatory for public services, (iii) launching in 2016 an initiative with the engagement of Member States to demonstrate and pilot the ‘Once-Only’ principle for businesses; (iv) working towards a ‘Single Digital Gateway’ to create a seamless, user friendly information system for citizens and business and (v) accelerating Member States’ transition towards full e-procurement and interoperable esignatures.