The European Commission will release its technology policy communication on May 25, and depending on exactly what’s in the document, it could have significant impact on digital business communications between the United States and the European Union.
According to James Waterworth, Europe vice president of the Computer and Communication Industry Association, the EC’s plans include new policies on Telecoms, audio-video media services, copyright issues, electronic privacy and demands for what some in Europe call a “Level Playing Field.”
Waterworth told reporters in a morning press conference on May 24 that he has seen the draft documents that will be released the next day. However, he also said that it will take about two years and likely much compromise before they become formal regulations and three years after that to take effect.
Waterworth also said that EC Vice President Andrus Ansip has said that the EC will not try to force the technology sector into a one-size-fits-all regulation. Instead, the regulations will be tailored to individual industries.
There are two areas where there will be significant international impact, Waterworth said. One is in the area of copyrights, where there is an existing treaty on the use of intellectual property in the form of the Bern Convention. He said that some of the proposed changes could potentially put the EU in breach of that convention, but he also said that he didn’t think the EC would intentionally create such a conflict.
However, according to Maud Sacquet, CCIA’s public policy manager for Europe, there’s strong support for a requirement that would force video-on-demand providers to contribute to national funds that are then used to subsidize local content producers.
She also said that video-on-demand providers may be required to have 20 percent European content in their mix of programming. In addition, she said that she expects there to be consideration of what she called the value gap in giving content creators visibility into their royalty payments.
Perhaps the biggest change that’s being considered under the copyright rules would be to push platforms such as Facebook, Google and others out from the existing commerce directive, which is the European equivalent of the U.S. Digital Millennium Copyright Act, and make them liable for copyright infringement by their customers. This could have major international implications because it would put the EU in violation of a number of treaties.
The level playing field in communications could also have a major impact, although exactly how it would be implemented remains unclear. The idea is that there is strong support in Europe for requiring all forms of communications to have the same rules.
This means that the heavy regulations that apply to telephone services would also apply to Voice Over IP services such as Skype. According to Waterworth, this could mean that any form of voice or video calling, including voice chat services in Websites for things like customer service, would be hit with those regulations.
European Commission Preparing to Release Technology Regulation Plans
As you might imagine, this is being pushed by European phone and wireless companies, and by their supporters in some European countries. Waterworth said that in his opinion some form of the telecom level playing field has a reasonably good chance of being included in the initial proposals that will be formally announced in September.
However, offsetting all of this is a joint letter to the EC and to The Netherlands (which currently has the rotating office of President) from 14 of the 28 nations in the EU strongly pushing for a light touch and for avoiding anything that would interfere with the free flow of data between the United States and the EU. The letter was from the United Kingdom and most of Northern Europe, but notably not from two major powers, Germany and France.
“We share the vision of a Digital Single Market with a simple, transparent and stable regulatory environment that stimulates digital entrepreneurship and spurs digitization across the economy to the benefit of business and consumers,” the letter said. “The Digital Single Market should be characterized by openness towards innovation and new business models, by stronger competition and minimal barriers, and a favorable environment for new entrants.”
“As both consumers and businesses can benefit significantly from cross-border e-commerce within Europe, we need to step up efforts to make it easier to trade online across the internal market and not impose new burdens on businesses,” the letter continued.
While the letter from the 14 nations to the EC stressed a limit on barriers to electronic trade within Europe, observers, including Waterworth, say they think such a limit on impediments to international trade will also apply to trade outside Europe. However, recent revelations about U.S. cyber-surveillance in Europe have reduced the level of interest in reducing trade barriers with the U.S.
Still, for U.S. companies, the news isn’t all bad. While the European plans will likely mean an additional layer of regulation, it won’t prevent the flow of data between the United States and the EU. However, it may make it tougher for smaller businesses to start cross-border operations if they lack the legal expertise to comply with the new (and so far constant) changes in rules.
The letter from the 14 countries will certainly reduce any likelihood of protectionism aimed at companies outside of the EU, but it won’t eliminate it. The next two years will be a period of compromise and companies with significant operations in Europe will need to keep track of developments in this area. At this point, there’s no guarantee that U.S. companies will get the consideration they were used to in the past and this is something they will need to watch for as well.