The Digital Single Market – are the Dutch up for the challenge?

January 12, 2016

The Netherlands is facing Europe’s toughest stress test for Member States – the EU Presidency. The task of the Netherlands Presidency is to give Europe its mojo back, as the continent is faced with a refugee crisis, internal security issues, a looming Brexit, remnants of an economic crisis and an ongoing problem in Greece.

Generally speaking, EU presidencies are memorable when they manage to conclude difficult or valuable dossiers, to overcome barriers in advancing legislation, or to promote a transformation in the direction or spirit of the EU. The rotating Presidency has an influential position among the institutions, as its role is to chair Council meetings and set its work programme, but, most importantly, to lead negotiations on important legislative files with the European Parliament and the European Commission. The Netherlands Presidency is under significant pressure to be successful, since it is a highly respected country, with a strong reputation for efficient administration, focused on pragmatism and problem-solving. The country also enjoys a high degree of geopolitical strength, making it fit to play the role of an ‘honest broker’.

What is the Dutch Presidency’s focus?

It is usually the case that the Presidency’s work programme is closely aligned to the Commission’s work programme and the Dutch Presidency is no exception. The Netherlands Presidency has announced that it will focus on four major areas: migration and international security; making Europe stand out as an innovator and job creator; finance and the economy; climate and energy policy.

What about digital?

What is less straight-forward are the Dutch Presidency’s plans for the tech industry and the Digital Single Market (DSM). One of Commissioner Juncker’s flagship initiatives, the DSM is set to put the European Union on the digital map, but, if regulated too heavily, it can handicap its potential to be a technology leader. Thus, many hope that the Dutch will lead the agenda in the right direction, with their ‘no-nonsense’ approach to politics and pro-business attitude.

While the DSM has not been called out as one of the Netherlands Presidency’s top four priorities, it is included in almost each one of them, as it is one of the most far-reaching initiatives. The main reason for the lack of outspoken support for the DSM is that the process has already started, leaving the Dutch Presidency with the not-so-sexy job to put together the nuts and bolts to finally create a digital single market.

More specifically, there are still quite a few legislative proposals left for the Netherlands Presidency to finalise, and even though they might not be as controversial as the General Data Protection Regulation completed during the last days of 2015, there are still important consequence for citizens and businesses alike.

Perhaps one of the most burning issues at the moment for the technology industry, especially in light of the current internal security question, is encryption – a means through which privacy is protected by encoding private messages, emails and others, so that only authorised parties can read them. After the Paris attacks in November, concerns of national security in a digitalised world grew. As a consequence, national governments called for restricting encryption, as it can lead to back-doors which can be used for criminal purposes. The Dutch government has released its position recently, and it has taken a strong stance against weakening encryption programmes, saying that tech firms will not be forced to share encrypted communications with the Dutch security agencies. The position of the Dutch government provides an indication that there will be no EU-level plan on weakening encryption, at least not on their watch.

When it comes to the DSM, the Netherlands Presidency will mainly plan to:

  • Remove barriers to e-commerce. During their term two proposals are planned, on platforms and geo-blocking. The Commission is trying to regulate online platforms, such as search engines, social media and app stores, which can affect the way businesses use them to sell their goods online. On geo-blocking, the Commission is reviewing the way businesses tailor their online services offerings based on the audience’s geographical location in order to offer better suited services. These are just two of the major issues facing any business using e-commerce.
  • Review the fragmented telecoms regulatory framework, which includes issues affecting landlines, broadband and mobile, and harmonise the current legislation. On telecommunication, the Council is usually the institution where legislative proposals get stuck, because of the differing positions of Member States. Telecommunication companies used to be state-owned, and in past EU-level negotiations have been able to influence national governments. The Netherlands Presidency’s role is to handle the roadblocks and foster efficient communications at this level.
  • Broadband spectrum is also an area of focus for the Presidency, and possibly one of the final pieces in the DSM telecommunications framework. 5G network, for instance, is of crucial importance for innovation in a wide variety of areas, such as connected cars. Member States usually try to block the harmonisation process because the current national system can be profitable to national governments. Consequently, the Dutch Presidency might face challenges when trying to push through major reform in this area.
  • Modernise copyright rules. The current copyright framework is outdated and highly fragmented, with each national government having its own rules. The current system is also not fit for the digital world, where content is accessed more and more online. A proposal on copyright is expected to come out during their term.
  • The same situation applies for the Audiovisual Media Services Directive. The Dutch will also advance the debate on reviewing the directive, with the aim to promote “the circulation of European audiovisual productions”.

Last but not least, the Dutch Presidency has also inherited Safe Harbour. The European Court of Justice ruled in October that the Safe Harbour data transfer agreement between the EU and the US is invalid, as it believed that EU citizens’ data was not properly safeguarded in the US.  Following the ruling, the European Commission is working to create a ‘safer’ Safe Harbour, and it will fall under the Dutch Presidency’s term to facilitate negotiations if a proposal from the Commission is presented during its term.

What are the engagement opportunities for businesses during the Netherlands Presidency?

The Dutch Parliament is set to have an influence, thus making engagement at a national level valuable. Furthermore, national delegations linked to the Dutch government can also play a very important role in the European Parliament and can prove to be influential during negotiations. However, at this time, engagement with the Council is low during the Netherlands Presidency, as it is vital for them to be seen as facilitating compromise and they cannot take a strong stance on any issue.

Even though most EU Presidencies come and go and are quickly forgotten, the Netherlands Presidency seems to meet the necessary criteria to make significant contributions during its six months term. As a business-focused Presidency, it is noticeable from their work programme that each priority area, including digital, is planned with a business-friendly approach in mind. As such, on critical issues such as geo-blocking, spectrum and data transfers, this type of approach might prove to be beneficial for the tech industry.

Andreea Ghita

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