We want to make Europe a digital global leader. American and Asian digital companies are taking the lead in the digital field, whereas European technology companies are struggling to compete globally. American digital giants are benefiting from our internal market and our infrastructures. We need to protect our internal market and gain independence from tech companies in the US.
The Digital Services Act (DSA) and the Digital Markets Act (DMA) will be our opportunity to shape the digital economy, not only at the European Union level, but also to make it a standard-setter for the rest of the world. To get there, we need to modernize the rules for digital services. The e-Commerce Directive, which has been the cornerstone for this, so far, dates back to the year 2000.
The principle of fairness in the market must play a leading role in the new rules. The EU is going to build a digital internal market in a way that each individual, every consumer, every EU business has their rights respected. Some big tech companies act as a kind of gatekeeper to access other services and products. Now, they have too much power. We want strong rules and mechanisms, which make sure that the gatekeepers cannot play foul. We need faster procedures and sanctions for those who repeatedly fail to comply with our European standards.
The Digital Markets Act will ban these unfair practices. We must update the rules for the content shared on social media and online marketplaces to make them fit for the digital world of today and tomorrow. The guiding principle is that what is illegal offline has to be illegal online. The Internet must not be the Wild West. With the Digital Services Act, we are creating common rules on reporting illegal content that must be taken down or blocked as quickly as possible.
Thanks to the Digital Services Act, we will also protect consumers by increasing transparency and product safety in online marketplaces and setting rules for the widespread use of Artificial Intelligence.
Micro, small and medium-sized companies must be excluded from administrative burdens to the furthest extent possible so that they have room to grow and innovate. Research shows that the potential gain of completing the Digital Single Market for services could be up to €100 billion, create 3.8 million jobs and reduce the cost of public administrations by 15-20%
It is no understatement to say that small and medium enterprises are the backbone of Europe’s economy. With 23 million SMEs, a number that has been steadily rising year on year, employing more than 100 million Europeans – that is just under 1 in 4 of us – it is fair to say that without SMEs, we would be far worse off. Responsible for over 50% of Europe’s GDP growth, SMEs are the engines that drive us forward, constantly innovating while serving Europe’s local communities.
But the existence of SMEs is fragile. Many operate on tight margins or in communities where disposable income to buy their products is limited. Bricks and mortar stores can no longer rely on local footfall, especially as Covid-19 has forced us all inside and online. The future is digital.
That is why low-cost, accessible tools are so important to SMEs. Digitalization requires investment, but with investment comes the potential for further rewards: the ability to reach new customers, diversify your audience and, ultimately, to grow. For nimble, lightweight operations not blessed with extensive marketing budgets, digital advertising has been a godsend.
The ability to personalize ads and reach consumers that businesses know are likely to be interested in what they have to offer has enabled e-commerce and digital services markets in far-flung corners of the bloc to flourish, selling to neighbouring countries seamlessly and giving unrivalled access to a greater range of products than ever before.
Europe now has a thriving digital ecosystem, of which we should be hugely proud. Even as the pandemic hit, many Eastern European markets saw double-digit growth in their e-commerce offerings. However, new proposals from some of my fellow legislators have put all that at risk. The very ability to personalise – a feature of the modern internet we rely on every day – has come under attack as concerns about data privacy have crept in. The result is that the Digital Services Act – the largest update to Europe’s digital rules in more than two decades – has become a vehicle for addressing a raft of policy areas, it was never intended to cover. With thousands of amendments proposed advocating for everything from a blanket ban on targeting to new, unwieldy obligations for the businesses that use it.
The Digital Services Act is a much-needed update to our digital rules. Technology has advanced so much in the two decades since the e-Commerce Directive came into force. But the framework we choose must be flexible and future-proof, giving businesses the legal certainty they need to invest and innovate for the future and ensuring all players are bound by the same rules. Restrictions to targeted ads would do nothing to level the playing field and would deprive SMEs of the ability to market their products.
The businesses that use targeted advertising the most tend to be nimble, small operations with tight budgets. They are looking for the best return on investment and the ability to reach customers they know will be interested in what they have to offer. Whether it is an artisanal producer of foodstuffs in Italy or a tourism business here in Croatia competing in a global market to attract new travellers, the SMEs that use targeted ads have chosen to do so because they combine low cost with effectiveness.
There is already, in the form of our world-leading General Data Protection Regulation, an instrument designed to safeguard the data privacy of European citizens. Proper enforcement of the GDPR would allay most, if not all, of the concerns raised about targeted ads. This would allow SMEs to continue using the tools they need to reach new customers and grow while protecting the rights of Europeans.
The Commission’s proposal for the DSA was intended to update our horizontal framework. Instead, we have seen thousands of sector-specific amendments, which would transform the nature of the legislation. Targeted ads are just one example, but there are dozens more.
As my colleagues in the IMCO Committee voted on amendments to the DSA last night, ahead of the finalization of the European Parliament’s joint position, I urge them to remember that all regulations have consequences, intended and unintended. That is why any restrictions on vital marketing channels must be underpinned by solid evidence showing they would deliver on their stated aims, and that the benefits would outweigh the very clear negative consequences.
