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Digital Single Market Strategy: consultations on geo-blocking and the role of platforms

posted on 25 September, 2015   (public)

Digital Single Market Strategy: consultations on geo-blocking and the role of platforms

On 24 September 2015, the European Commission has launched two further consultations as part of the Digital Single Market Strategy issued on 6 May 2015: one on geo-blocking and one on platforms, online intermediaries, data, cloud computing and the collaborative economy.

The consultation on geo-blocking and other forms of geographically-based restrictions will gather opinions on unjustified commercial barriers preventing from buying and selling products and services within the EU. It covers, for example, customers who are charged different prices or offered a different range of goods depending on the State Member they live in. These new barriers restrict or even nullify the openness of markets and the potential for increased market transparency, as well as the possibility to offer more product variety and lower prices to consumers. Preventing unjustified geo-blocking has thus been identified by the Commission as one of the priorities of the Digital Single Market strategy announcing that it: "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 and the framework set out by Article 20 of the Services Directive.”

The EU is not starting from scratch to address new barriers to the single market. The current legal instruments in this field notably include:

  • The Services Directive prohibits discrimination based on nationality or place of residence in the provision of services, but this provision is difficult to enforce effectively because of the broad range of possible exceptions.
  • The e-Commerce Directive lays down the country of origin principle for information society services
  • The Consumer Rights Directive requires companies to inform consumers upfront of any delivery restrictions.
  • Finally, EU competition law can address some practices, such as agreements preventing retailers from selling cross-border upon unsolicited request by customers ("passive sales"), as well as anticompetitive practices by dominant companies.

The consultation on online platforms will look at four themes that are strategic for the digital economy:

  • Online platforms (such as search engines, social media, video sharing websites, app stores, etc.): their emergence has been generally seen as beneficial, but it is the way that online platforms operate that raises issues requiring further exploration. Some of them concern the way online platforms collect and make use of users’ data and the transparency with which they do it; the impact of some platforms’ relative bargaining power when negotiating the terms and conditions of access to a given market with other market players; the dual role of some platforms, acting both as marketplace operators and suppliers competing with their customers in downstream markets. There is also a need to further explore the transparency of the information and safeguards provided to consumers on the question whether online platforms act on their own behalf or on behalf of their suppliers.
  • Tackling illegal content online and the liability of online intermediaries: the ambiguous role of Internet intermediary service providers enshrined in the E-commerce Directive 2000/31/EC providing that they should not be held liable for the content that they transmit, store or host, as long as they act in a strictly passive manner but that at the same time when illegal content is identified (such as terrorism/child pornography or information infringing intellectual property), intermediaries should take effective action to remove it, proved to be problematic. That is why, in its DSM Strategy, the Commission announced its intention to analyse the need for new measures to tackle illegal content on the Internet, and whether to require intermediaries to exercise greater responsibility and due diligence in the way they manage their networks and systems by imposing on them a duty of care.
  • Data and cloud in digital ecosystems: the principle of free flow of personal data is regulated under the framework of Directive 95/46/EC and will be enhanced with the adoption of the General Data Protection Regulation, currently going through the legislative process in European Parliament and Council. The European Commission also undertook to launch a “European Cloud Initiative” with the aim to create trust in cloud computing, including cloud services certification and a research open science cloud.
  • The collaborative economy: the questions of the consultation aim at assessing the impact of the development of this new phenomenon on the rest of the economy, as well as the opportunities and challenges it raises. The main question is whether existing EU policy is sufficient to let it develop and grow-further or a new European agenda should be considered in the context of the forthcoming Internal Market Strategy.

In parallel, in an ambitious attempt to adopt a holistic approach, the Commission is also seeking views in DSM-related public consultations on the Audiovisual Media Services Directive, the Cable-Satellite Directive, an evaluation and review of EU telecoms rules, the needs for Internet speed and quality beyond 2020 and ICT standards (more information on consultations).

Source: EPRA Secretariat