Documents considered by the Committee on 13 November 2017 Contents

33Digital Single Market: E-commerce package

Committee’s assessment

Politically important

Committee’s decision

Cleared from scrutiny

Document details

Commission Communication: A comprehensive approach to stimulating cross-border e-commerce for Europe’s citizens and businesses

Legal base

Department

Business, Energy and Industrial Strategy

Document Number

(37817), 9610/16 + ADD 1, COM(16) 320

Summary and Committee’s conclusions

33.1On 25 May, as part of its Digital Single Market (DSM) Strategy, the Commission published a Communication, accompanied by a package of legislative proposals, aimed at increasing cross-border e-commerce in the EU by enabling consumers and companies to buy and sell products and services online more easily and confidently (the e-commerce package). The e-commerce package comprises the following ‘three-pronged plan’:

33.2In its report on 22 March 2017, the Committee requested that Minister provide “a case-by-case assessment of the extent to which, post-exit, the policy objectives of each of the different Digital Single Market (DSM) proposals could be achieved solely through domestic legislation or would require some form of bilateral agreement with the EU.” The Minister does not provide this type of case-by-case analysis, but accepts that most DSM proposals require reciprocal commitments between the participating countries, and are therefore a matter for trade negotiations.

33.3The Committee notes the Minister’s assessment that the “cross-border dynamic” which characterises a large majority of Digital Single Market (DSM) Strategy policy initiatives means that “for most of these initiatives, achieving an equivalent policy outcome from outside the EU would require reciprocal commitments and arrangements between the parties involved” and, by implication, could not be achieved solely through domestic legislation. This leads logically to the Minister’s conclusion that “the nature of the UK’s future relationship with the DSM is a matter for negotiations with the EU”.

33.4We clear this Communication from scrutiny on the basis that the legislative initiatives to which it refers are being scrutinised separately, and the Mid-Term Review557 of the implementation of the Digital Single Market Strategy has provided a more up-to-date overview of progress with regards to the DSM.

Full details of the documents

Commission Communication: A comprehensive approach to stimulating cross-border e-commerce for Europe’s citizens and businesses: (37817), 9610/16 + ADD 1, COM(16) 320.

Background

The Digital Single Market Strategy

33.5The completion of a DSM is Commission President Juncker’s second highest political priority, aimed at creating jobs and growth in the EU.

33.6The Commission published its strategy for boosting the Digital Single Market in May 2015. It proposed a mix of legislative and non-legislative initiatives to be tabled by the end of 2016, with initiatives centred on three ‘pillars’.

33.7On 30 May 2016, one year after the launch of the DSM Strategy, the Commission adopted an e-commerce package, consisting of a range of DSM initiatives with a strong focus on reducing barriers to cross-border trade in the digital economy, and an accompanying Communication explaining the relationship between the proposed interventions.558

33.8In its most recent report in relation to this Communication, the previous Committee concluded:

“Greater clarity is needed on the range of issues that the Digital Single Market Strategy seeks to address in the context of the UK’s imminent exit from the EU. Some of these policy issues are inherently cross-border in nature (e.g. abolishing roaming charges for consumers) and necessitate reciprocal commitments from more than one country, entailing an element of regulatory harmonisation or mutual recognition. Post-exit, achieving policy objectives of this kind would appear to require some form of bilateral agreement. On the other hand, proposals that do not contain a reciprocal dimension might be achievable through UK law in the absence of any bilateral agreement.

“We request that the Government provide the Committee with a case-by-case assessment of the extent to which, post-exit, the policy objectives of each of the different Digital Single Market proposals could be achieved solely through domestic legislation or would require some form of bilateral agreement with the EU. “

The Minister’s letter dated 5 June 2017

33.9The Minister (Lord Prior of Brampton) responds to the Committee’s question as follows:

“You asked about the extent to which the policy objectives of individual DSM initiatives could be achieved solely through domestic legislation or whether some form of bilateral agreement would be required.

“The Committee has already noted in its 36th report that the policy objectives of the large majority of DSM initiatives are cross-border in nature—we are in broad agreement. As a consequence of this cross-border dynamic, for most of these initiatives, achieving an equivalent policy outcome from outside the EU would require reciprocal commitments and arrangements between the parties involved. The nature of the UK’s future relationship with the DSM is a matter for negotiations with the EU. These negotiations will help to inform whether any changes to domestic legislation are required.”559

33.10In terms of next steps, the Minister states that the European Commission has released a Mid-Term Review on the implementation of the Digital Single Market Strategy which takes stock of progress and looks forward to potential future areas of work.560

The Minister’s letter dated 13 March 2017

Responses to Brexit questions

33.11The Minister answers the two questions the Committee raised in its previous report in relation to the Communication. Asked how the Government would continue to approach negotiations on the DSM, the Minister states:

“As the Committee will see from this letter, the UK continues to play an active role in the DSM, influencing negotiations and voting in Council to ensure that the UK’s views are heard. Through developing strong and constructive relationships with likeminded Member States, we have achieved successes on the DSM, both in terms of policy content and the speed at which some key policies have progressed through the EU’s legislative process—for example, the recent agreements on geoblocking and portability represent a near record turnaround in EU decision-making. We aim to maintain this momentum and influence across other DSM files, working with our Member State partners and the EU institutions.

“The UK has been an active proponent of the DSM since the strategy was launched in May 2015, pushing for an open, flexible market with a framework that reflects the dynamic nature of the digital economy.”

33.12In response to the Committee’s second question—which proposals the Government considers a policy priority and would wish to apply regardless of the withdrawal of the UK from the EU—the Minister responds as follows:

“Our EU exit negotiations are yet to begin. It is therefore premature to comment publicly on the nature of future agreements with the EU or on potential changes to domestic law following our EU exit.

“Whatever the nature of our relationship with the EU, it is in the UK’s economic interests to work with international partners on building a fully functioning global digital economy. For this reason, we continue to push for an open, competitive and flexible Digital Single Market. For example, the free flow of data is fundamental to the functioning of the digital economy and realising its full potential. The Government sees global data flows as being of high importance, hence the desire to tackle unjustified data localisation not just at the EU level, but also in data flows between the EU and third countries.

“We also recognise the importance of consumer rights in enabling the digital economy. Tackling rogue traders and unscrupulous business practices will remain important to the UK, as our citizens and businesses continue to trade with EU partners.”

Update on progress of Digital Single Market initiatives

33.13In late 2016 the Government committed to sending the House of Commons European Scrutiny Committee and the House of Lords European Union Committee quarterly updates on the DSM, and the Minister now provides the first such update.

33.14The Minister states that “notable progress” has been made on a number of DSM files in recent months. In particular, a General Approach was reached in Council in November 2016 on the Geoblocking Regulation. Furthermore, trilogue agreement was recently reached on the portability proposal, which will allow consumers to access their digital content when travelling in the EU, and the roaming proposal, which will see mobile roaming charges eliminated from the middle of this year. All 3 of these agreements were supported by the UK Government. The Committee is separately scrutinising each of these proposals.

33.15The Minister also provided a detailed overview of the state of play in relation to twelve specific strands of the Digital Single Market package which are currently under negotiation, as outlined below. A summary of this overview is provided in the Committee’s previous report on the E-commerce package, published on 22 March 2017.

Previous Committee Reports

Thirty-Sixth Report HC 71–xxxiv (2016–17), chapter 1 (22 March 2017); Seventh Report HC 71–v (2016–17), chapter 2 (6 July 2016).


553 Geoblocking refers to commercial practices that prevent online customers from accessing and purchasing a product or a service from a website based in another Member State, or which automatically re-route them to a local site. As a result, consumers may face price discrimination (i.e. be charged more for products or services purchased online) on the basis of their IP address, their postal address or the country of issue of their credit card.

558 European Commission, Communication: “A comprehensive approach to stimulating cross-border e-Commerce for Europe’s citizens and businesses” (30 May 2016) https://goo.gl/P0mAQu.




20 November 2017