“We need to ensure European people, consumers, companies and industry can benefit from a truly functioning Digital Single Market. This is a top priority of this Commission.” Andrus Ansip, Vice-President of the European Commission, Digital Single Market.
The establishment of the Single Market has been one of the main achievements of the European Union, yet it has not kept pace with changing consumer behaviour and technological change. Therefore, we are trying to build a modern, digital economy by moving from 28 national digital markets into one. If fully realised, this Digital Single Market could contribute €415 billion to the European economy, boosting jobs, investment and innovation. The UK has Europe’s largest digital sector which is worth £113 billion to the UK economy, supporting more than 1.3 million UK jobs. The Digital Single Market, then, is of enormous significance to the UK.
The European Commission has proposed an ambitious Digital Single Market (DSM) strategy, that aims to increase access for consumers and businesses to digital goods and services across Europe, create the right conditions for digital networks and innovative services to flourish, and maximise the growth potential of the digital economy.
UK Conservative MEPs set up a Digital Single Market Working Group in the European Parliament to steer the Commission’s strategy. They have met with senior representatives of the UK Government, including the Secretary of State for Culture and the Minister for Intellectual Property, the European Commission, leading companies, such as Google, Uber and AirBnb, and respected academics.
So what has happened since the strategy was adopted?
In December 2015, the Commission adopted three legislative proposals on consumer rights. The first will ensure that consumers will have a clear set of rights when they buy digital content, including games, music and videos from across the EU. The second will facilitate further opportunities for e-commerce, potentially enabling over half of European companies to start or increase their online sales to other EU countries. Finally, the third proposal looks to ensure that people from the UK will be able to continue to access the online services that they have subscribed to at home, such as Netflix or Amazon Prime, when they are on holiday or travelling in Europe. By opening up markets within the EU we are creating greater competition and giving consumers better choice with lower prices.
The European Parliament, in its report of January 2016, emphasised the need for rules of legal guarantees, defective content and possible unfair contract terms specific to digital content and e-commerce. It also argued that there should be no reason to distinguish consumer rights based on whether content was bought online or offline, to increase consumer protection and trust.
What about VAT on digital?
In 2016 we can expect agreement on the above three files, as well as much-needed VAT simplification. Since January 2015, VAT on digital content is levied where the customer is based, rather than where the supplier is located. This has caused serious problems in the UK and Conservative MEPs have been leading calls to fix the so called ‘VATMOSS’ issue by securing an exemption for small and micro businesses underneath the national threshold.
Our competitors in America and Asia are leading the digital world, and even our successful European technology firms are relocating to Silicon Valley. Without action the UK and EU will lose its competitive edge. The technology industry wants DSM proposals that make it easier for EU companies and consumers to go digital in this fast-paced sector. Conservative MEPs will be working for rules that stimulate growth, innovation and competitiveness in the UK and in the EU.
The EU’s Digital Single Market strategy should create an environment that will be friendly to consumers and businesses in the digital world, by unlocking the benefits of digital advances, removing barriers to trade to stimulate e-commerce, empowering consumers, and supporting businesses, creators and investors.