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Whitepaper: EU Digital Single Market Strategy

  • Text
  • Digital
  • European
  • Regulation
  • Content
  • Noerr
  • Consumers
  • Pillar
  • Directive
  • Businesses
  • Parliament
In May 2015, the European Commission released a Digital Single Market (DSM) strategy as a central priority of its agenda at the beginning of its four-year term. The strategy’s objective is to create an open, interconnected and digital single market and to maximize the positive impact of the digital transformation on European society and on business activity in the EU. To this end, the Commission proposed a wide range of measures in order to create a stable legal environment, stimulate innovation, tackle market fragmentation and allow all players to tap into the new market dynamics under fair conditions.

Pillar 1: Better access

Pillar 1: Better access for consumers and businesses to digital goods and services Modernized VAT rules for e-commerce Enterprises in the EU generated 18 % of their turnover from e-commerce (2017). Source: Eurostat. To facilitate compliance with the different national regimes for value-added tax (VAT), the Commission proposed a package of two Regulations and one Directive. It includes (i) new rules allowing companies active in cross-border e-commerce to comply with all their VAT obligations through an online portal hosted by their domestic tax authority (one-stop shop); (ii) a simplification for startups and SMEs with yearly cross-border sales up to EUR 10,000 who will be able to continue applying domestic VAT rules; (iii) the removal of current exemptions for small consignments from outside the EU; and (iv) a change to existing VAT rules that allows Member States to apply the same VAT rates to electronic publications such as eBooks and online newspapers as to print publications. Status: Package partially adopted on 5 December 2017 (proposal on reduced VAT rates for e-publications currently still being discussed); Member States will have until 31 December 2018 and 31 December 2020, respectively, to transpose the corresponding provisions of the Directive into their national legislation; measures regarding cross-border sales of electronic services shall be introduced by 2019; further provisions (one-stop shop, elimination of VAT exemption for small consignments) that will apply by 2021 will be addressed in a further Commission proposal under a non-legislative procedure. Impact: The revised VAT rules affect a considerable segment of business activities in the EU. 8

Pillar 2: Creating the right conditions for digital networks and services to flourish Update of the Audiovisual Media Services Directive Viewers, in particular young people, increasingly watch content online rather than on traditional TV. Whereas TV broadcasters are strictly regulated by the current Audiovisual Media Services Directive (AVMSD), on-demand services such as Netflix are only subject to a relatively light regulatory regime. In addition, video-sharing platforms such as YouTube generally fall outside of the regulation‘s scope altogether. These discrepancies are especially stark regarding advertising rules, the promotion of European works, and consumer protection provisions (especially concerning the protection of minors). The Commission therefore proposed a revision of the AVMSD. Its objective is to introduce flexibility when restrictions applicable to TV are no longer justified, while ensuring that consumers are protected in the on-demand and internet world. Status: Commission, Council and EU Parliament reached a provisional political agreement on 6 June 2018; revised Directive to be officially adopted in autumn 2018; Member States will have 21 months to transpose the new rules into their national legislation. Impact: Companies are only affected if they are broadcasters or operate on-demand service or video-sharing platforms. 17 % of Europeans watch videos from on-demand services (2016). Source: EU Commission, Digital Scoreboard. 9

Whitepaper: EU Digital Single Market Strategy
Public M&A Report H1/2018
Legal issues of digitalisation in Europe