Influencers: digital single market performance worst on copyright, cross-border data

Two years after its launch, copyright and media remain Commission’s weakest digital links.

Two years after its launch, the European Commission’s digital single market (DSM) still has a lot of hurdles to clear, according to a group of influential industry insiders, observers and lawmakers.

More than a third of 44 representatives from media and technology companies and politicians who make up POLITICO’s Tech Caucus said copyright and media are the DSM’s weakest links. The European Commission’s own midterm review of the DSM is expected to be adopted Wednesday.

One respondent said anyone conducting activities online has “total legal uncertainty” because copyright is still based on one “harmonized exclusive right complemented by 21 voluntary exceptions.” Another said: “Copyright is increasingly seen as hopeless.”

DSM has also performed poorly on streamlining cross-border data flows and cloud storage, according to more than a fifth of respondents. “Data flows in Europe are still restricted by customary and legal factors. This in turn affects virtually all spheres of the DSM, from e-commerce to digital health,” one participant said.

According to another, the Commission “resists to touch some issues that are politically sensitive for some member states,” such as phasing out copyright levies, because “they are a source of cultural funds for collecting societies in some major countries, such as France and Germany.”

Although respondents are skeptical about the DSM’s success, it has proven to be positive on some issues. More than a third (36.4 percent) said the Commission did well on privacy and data protection issues as well as on telecoms and connectivity.

“Irrespective of rows over spectrum reform, the EU has actually done a stellar job in creating affordable and ubiquitous connectivity for all,” one respondent said, while adding that it should still work on how to invest in technologies such as 5G.

According to another, “telecoms is the only legislation up and running.”

New kids on the block

Tools that pick up content from newspapers, blogs and podcasts — so-called online news aggregators — should stick to existing copyright rules for written material rather than implementing rules for the music industry, according to half of the respondents.

One of them said the current set of copyright laws is “perfectly adaptable” for the online market. Others say that “while the current rules are not good enough, there is not a compelling case for the current proposals,” and “there is no evidence for the need of new exclusive rights.”

New communications services such as Whatsapp and Skype will have to be subject to e-commerce rules just like other internet services, rather than being subject to existing rules for telephone operators, say just under half of the respondents.

“The telco framework is not appropriate for internet-based services and such an approach would restrict innovation,” according to one respondent.

Another said that imposing telephone operators’ rules might seem good when it comes to privacy. But as a consequence “privacy protections against state surveillance will be eroded as these services are required to break their end-to-end encryption technology to enable government surveillance or are prohibited to introduce privacy enhancing features because they would constitute interference in the communication.”

More than a third of the respondents picked a third option and said they want other rules in place. According to one, services such as Whatsapp and Skype should primarily stick to e-commerce rules, “but it should allow fair competition for traditional players.”

Another pointed out that “these communication services will have to be included in the e-privacy regulation and have rules in place regarding interoperability between different services and end-to-end encryption.”

Cross border data, internet

The Commission should come up with new legislation to manage cross-border data flows, a large chunk of the respondents believe (43.2 percent). According to one of them, that “would send a powerful message that data can be stored with the same protection anywhere in the Union.”

A third of respondents, however, said the Commission should enforce existing rules before coming up with new laws, with some saying “new legislation is likely to have so many carve-outs and exceptions that it will be useless. Non-legislative guidance on how to interpret existing rules, and better enforcement, will be more effective.”

A majority of respondents think the best way for the Commission to ensure fair competition on the internet would be to rely on antitrust regulators to police sectors (36.4 percent), or to give guidance to adapt existing laws to the internet age (25 percent).

“A combination of ‘guidance on existing laws’ and ‘antitrust enforcement’ would probably work best,” said one respondent.

According to another: “The existing toolkit of competition, data protection and consumer law is broadly speaking functioning and sufficient,” while adding that this might require adaption to the digital economy.

“But the last thing the digital economy needs is additional layers of regulation which will suffocate innovation and hamper cross-border scaling.”

Click here for a list of participants.