Will the Digital Single Market save the EU?

Posted on 23rd March 2016

Matthew McDermott, our Director for Public Policy in Europe, the Middle East and Africa, examines how we might avoid Brexit, and how the conversation Britain’s referendum on leaving the EU has started might present an opportunity.

With 16 separate initiatives on everything from cybersecurity to parcel delivery, the Digital Single Market Strategy (DSM) is either a bold idea from the European Commission to support economic growth across the EU, or the usual turf-grabbing from bureaucrats in Brussels, depending on which side of the argument you sit.  Published the day before the UK general election, which returned a Conservative government committed to an in-out referendum on Britain’s membership of the EU, it struck me its ambition might help save the EU.  (No, really.)

The election result kick-started British Prime Minister David Cameron’s renegotiation of his country’s membership terms, putting the costs and benefits of EU membership under the microscope like never before.  The team around the prime minister certainly realised quickly the DSM would benefit the UK.  With the EU’s largest digital economy, anything making it easier to sell these products in the EU will be a boost to the economy.

What Did the Europeans Ever Do for Us?

But it hasn’t been proposals to turbocharge the economy that have won most support from the British public and press.  We just have to look back at the debate around mobile phone roaming charges. The negotiations were hard-fought (some were of a view that travellers are probably well-off enough to pay extra) but UK negotiators worked hard to convince their colleagues that this was an issue that mattered to the average person in the UK.

The day after agreement to end roaming charges was reached, the UK team brought in copies of the UK’s major daily newspapers to show their EU colleagues. Each one of them carried the news of the end of roaming on the front page – each writing something to the effect of, “finally Europe is doing something useful”.

Netflix is Next

In a similar vein, the most consumer-focused proposal in the DSM aims to allow video-on-demand users, and users of similar products, to carry on using the service when they cross European borders. Spotify, for one, has realised that its subscribers are willing to pay a little bit extra to use the service when they travel, but that making them buy a subscription in every country they travel to is a non-starter. Netflix meanwhile, often watched on the couch at home, has managed to successfully hold on to the model of requiring a subscription in each country.

With the world going mobile, those Brits who want to use their mobile phones when they are on holiday in Spain now want to watch Netflix as well (or, in the jargon, they want ‘portability’).  There are many good reasons why this is harder to achieve than the end of roaming – as a consultant who works on these issues, it makes me faint just to think about it – but you can be sure UK consumers would be happy if it could be done.

Will ending roaming and allowing people to watch Netflix on the Costa Brava be enough to keep the UK in the EU?  Probably not, but it would help dispel the myth that the EU doesn’t do anything useful for ordinary people.  It is hard to get excited about trade blocs, but ending roaming and starting portability can certainly excite travellers waiting for delayed flights.

Digital on the Agenda

The rise of the tech-savvy British consumer – or more importantly, of the tech-savvy soon-to-be voter in the EU referendum – offers a fantastic opportunity for all tech companies. While the European Union institutions are focused on looking good for the digitally minded UK consumer, now is the time to link your policy or regulatory need to them.

And this opportunity doesn’t have the short window of opportunity you might think. The referendum won’t be the end of a rocky period in the UK’s relationship with the EU, nor will it be the end of the role that the UK consumer plays in the minds of policy-makers in Brussels.  Linking your business objectives to the needs of the UK consumer will be a useful approach for some time to come.

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