What does the Digital Single Market mean for Europe?

Currently, both the Internet and digital technologies are transforming the world. However, there are many barriers that prevent businesses and citizens to benefit from digital processes such as electronic commerce. For this reason, the European Union has decided to adjust its policies to create and implement a single market, known as the Digital Single Market. Let’s see how Europe will be affected by the creation of it.

The Digital Single Market aims to create a single market for the digital age in the European Union. In other words, the 28 Member States, with its 28 national markets can operate as one. The main objective is to remove barriers to cross-border procurement of goods and services online. This would contribute according to the EU itself to generate billions of euros per year and create hundreds of thousands of jobs.

The reality is that today there is a technology that can not be used because we have no joint legislation that fits this unique market. Thus, through policies and treaties, the Digital Single Market will try to remove the obstacles in terms of trade.

This unique state shall consist of three policy areas that will try to break down the barrier between the online world and the offline world.

Policy areas of the Digital Single Market

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1.- Better access to digital services

It is intended to make electronic commerce easier and especially more affordable for small and medium enterprises. Currently, the cost of delivering packages when shopping in another country is very high. This has a negative impact especially on SMEs who has to pay thousands of euros to comply with regulations regarding VAT. Simplifying these rules (such as online tax payment), and try to make common and extensible to all EU member countries (including the creation of a single register), will bring significant savings for companies.

2.- Digitization as a growth engine

In the EU member states, all sectors must be able to integrate new technologies. To this end, there will be an investment in the infrastructure of ICT such as Cloud Computing, the creation of a European Cloud for companies operating in Europe offer services of reliable cloud as more and more users demand globally.

3.- Creating an environment where digital services thrive

This requires a reliable and secure infrastructure and fair competition is required. The European Commission, seeing the proliferation of online platforms, web sites purchase and use of information, and is working on new regulations for data protection.

In addition, the Commission has recently created the European Data Portal, to manage and interpret the amount of data generated by our society and use them in favor of this, what is known as Big Data.

Studies have shown that the size of Open Data has grown 40% between 2016 and 2020. This translated into economic figures mean about 76 million euros.

Do not confuse the terms Open Data with Big Data. The latter could generate almost 2% of GDP in Europe. Here you have a post with the differences between the two types of data.

Another point where the European Commission has worked to build that trust, has been through the new European standard for electronic identification 910/2014, known as e-IDAS. We told you how it influences the new rule within the Digital Single Market.

What are the benefits of e-IDAS within the Digital Single Market?

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Following this digital and technological growth, the old legislation regulating the use of electronic signatures in Europe, was outdated, so the European Commission issued new rules on electronic identification and trust services for transactions the internal market. This is the e-IDAS.

The purpose of this standardization is to adapt to the provisions of the Digital Single Market which stresses that electronic communications are reliable under the “label of confidence“. e-GONE is the legislation that will regulate some of these technological and digital infrastructure where users feel protected and have full confidence in electronic services.

Among other things, this new regulation aims to adapt to the principles of usability. Usability measures the quality of the experience a user or a company have when interacting with a product or a system.

For instance low usability, we can refer to DNIe. This ID serves as identification both online and offline. However, there is an imbalance between the date of validity and the certificate itself. This is not practical for citizens. Not to mention that many citizens do not even know that your ID is also an online identification document; a digital certificate.

Similarly, companies are faced with obstacles such as lack of control over who has access to information, or the use of other countries with obsolete certificates, using a cryptographic card reader…

Well, e-IDAS it enters into force in July this year bringing a legal and clear to ensure that electronic identity beyond the frontiers and interoperability of electronic signatures in member countries of the European Union recognized legal framework.

Three key priorities are contemplated within the rules

1.- The user confidence in using these electronic services and adapt to technologies.

2.- Adapting European standards to a single market by reducing costs and making more reliable transactions for businesses, especially for SMEs which until now paid higher costs.

3.- Ensure the functioning of the market and fair competition.

Therefore, to sum up this new regulation from the European Commission, certificates issued by a member state of the EU, whether it is a natural person as a legal, must be accepted by the other member states.

What benefits will bring the Digital Single Market

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If Europe really is able to consolidate the single market, the benefits to the community and to citizens and businesses, would be much more positive than we imagine.

1.- Disappearance of national barriers

A clear example of this fact have in telephone communications. If we compare the price of a phone call to another EU country for five years and now, today the cost is much lower.

Although the biggest communications operators are resisting, the abolition of the taxes added by the roaming is a confirmed fact that will take place in a very short period of time. The evolution of mobile technologies (4G and the upcoming 5G) allow consumers to access products and services with speeds unimaginable until recently, while the free WiFi networks spread quickly in public and private environments.

This encourages qualitative and quantitative access to digital consumer services, but much remains to be done.

2.- Creating jobs

The Government of Spain estimated growth by 3.8 million jobs, in the environment of digital single market.

As we have discussed above, both the rise of Big Data as increased Open Data they will be translated into million of euros and generated through work and four million in 2015 worldwide.

And thanks to the creation of the Digital Single Market, the EU will grant to develop more technology that strengthens the single market and conforms to turn Europe 2020 policies.

3.- Opportunity for business

Today, companies have access to online stores for about 500 million consumers. Thanks to the single European market, the level of competitiveness with other powers will improve markedly. This is very attractive to foreign investors who see a possibility of agreements and economic transactions with Europe.

4.- Identification in banks and Universities

The standardization of digital identities favors the development of public and private entities. A clear example is banks and universities.

With consolidated electronic identity, access to scholarships in European public universities will be much easier. Also, if digital certificates are valid in any country, funding opportunities for individuals and companies are increasing, improves the quality of the market and will undoubtedly lead generation million euro profit.

Although it is true that we already see this evolution towards a single European market, we still have to wait a little to get a perfect union between theory and reality. What is certain is that the unification process is already underway and is making strides. See you soon.