EC aims to generate €415 billion of economic growth with 'digital single market'

Will Green is news editor of Supply Management
12 May 2015

The European Commission (EC) is aiming to create a digital single market in the EU that will make it easier for businesses and consumers to make cross-border purchases.

The EC proposals include harmonising rules on contracts and consumer protection when buying online, making parcel delivery “more efficient and affordable” and reducing the administrative burden to businesses caused by different VAT regimes.

The plans include an end to “geo-blocking”, where online sellers deny buyers access to a website based on their location, or re-route them to a local store with different prices.

The role of online platforms, such as search engines, social media and app stores will also be examined in terms of non-transparency of search results, pricing policies, relationships between platforms and suppliers and how personal information is used.

As part of the work an antitrust competition inquiry into the e-commerce sector in the EU has been launched, which will focus on “potential barriers erected by companies to cross-border online trade in goods and services”. A preliminary report is expected in mid 2016 and a final one in early 2017.

The EC said a digital single market could generate €415 billion (£302 billion) of additional growth per year and create hundreds of thousands of new jobs.

However, just 4 per cent of the EU digital market is currently composed of online cross-border services, with national member state services making up 42 per cent and US-based services 54 per cent.

Only 7 per cent of SMEs currently sell cross-border and small online businesses hoping to trade in another EU country face extra costs of €9,000 (£6,550) to adapt to national laws.

EC president Jean-Claude Juncker said: "I want to see pan-continental telecoms networks, digital services that cross borders and a wave of innovative European start-ups. I want to see every consumer getting the best deals and every business accessing the widest market – wherever they are in Europe.”

The digital single market will be discussed by the European Council in June.

Niklas Hedin, CEO of logistics software firm Centiro, said: “It’s crucial for businesses to create an agile carrier network if they are to take advantage of the proposed digital single market for Europe. This opportunity for easier cross-border e-commerce will be squandered if retailers fail to provide delivery options for customers from other European Union countries."

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