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INSIGHTS BRUSSELS

A regular alert on key EU policy developments


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Issue 26 October
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Stakeholder engagement at the core of


the EC digital market strategy
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Contents

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Digital 3
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Audiovisual Media Services Directive

Satellite and Cable Directive

Needs for internet speed and quality beyond 2020

Priority ICT standards plan

Online platforms, cloud & data, liability of intermediaries,


collaborative economy

Geographically based restrictions when shopping


and accessing information in the EU

Modernising VAT for cross-border e-commerce

EU Campaign for Cybersecurity

Electronic communications networks and services

Energy 7
EU Strategy Package on Natural Gas and LNG to be unveiled
early next year

Electricity market interconnections

COP21 EU mandate

Financial Services

Action Plan on Capital Markets Union

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Digital

Following the adoption of the EU Digital Single Market strategy (DSM), the European Commission is now focusing on the
development of an EU regulatory and policy framework aimed
at bolstering the development of the European digital landscape. For that purpose, eight consultation processes have
been launched; one of these has just been closed and the others will run until November and December.
The consultations cover a wide range of policy issues, spanning from intellectual property rights to the role of on-line platforms and intermediaries, requiring in-depth market insight
and thoughtful analysis to better inform the launch of any new
legislative proposal in this area. Businesses and stakeholders
interested by these developments should not lose this opportunity to make their voice heard in Brussels.
Following the consultation process, the Commission will assess the contributions received and likely submit a new legislative proposal later in 2016. Beyond the on-going consultation process, it is worth mentioning the EC campaign on
cybersecurity that will run across Europe in October.

Audiovisual Media Services Directive

Since 2010, the EUs Audiovisual Media Services Directive


has governed the EU-wide coordination of national legislation on all audiovisual media, both traditional TV broadcasts
and on-demand services. Before undertaking any review of
the current legislation, the Commission has been gathering
concrete experience and feedback from stakeholders (market
players, public organisations, consumer organisations) but

also from consumers themselves, as users of audiovisual


media services like TV channels and online services. The
final assessment of responses submitted in this process will
include an analysis of the added value of EU intervention in
this domain and how effective the existing framework has
been so far.
This is the first time respondents have been offered a wider
variety of options while giving their feedback to the consultation, including the opportunity to submit their own ideas on
how to improve legislation, provide their personal experience
on how the directive has been working, and even create polls
to gather other peoples views on their suggestion via the
dedicated EC online platform.

Satellite and Cable Directive

In the light of the foreseenreview of the twenty years old


EU Satellite and Cable Directive, the European Commission
aims to evaluate the adequacy of EU rules on copyrightlicensingfor TV and radiobroadcastingby satelliteand cablewhen applied to the new online environment. It will also
look into whether the rules have helped Europeancitizensto
get betteraccessto TV and radio content from other Member
States.The Commission is also seeking views on the possible extension of these rules to enhance cross-border access
to online content services within the EU.The consultation
will run until 16 November and the Commission is expected
to share the results of the consultation in Spring 2016. The
first concrete legislative proposals are expected to follow
shortly afterwards.

The Digital Market today


1 in 3 Europeans is interested in
watching or listening to content from
their home country when abroad

54% (US)

1 in 5 Europeans is interested in
watching or listening to content from
other EU countries

315 million
Europeans use the
Internet every day
Source: The European Commission

4% (EU)
Cross-border
42% (EU)
National - 28
member states

Electronic communications networks


and services
The review of the regulatory framework for electronic communications is one of the 16 actions planned under the
DSM Strategy. The purpose of the consultation launched on
11 September is to gain market insight on the adequacy of
the current regulatory framework and to assess whether it
should be reformed in light of market and technological developments.
The consultation covers 3 pillars:
The network pillar: building a consistent regulatory
environment that is supportive for infrastructure investments in both fixed and wireless networks;
The service pillar: developing a modernized regulatory regime for electronic communication services;
The governance pillar: ensuring that markets are regulated in a consistent manner across the EU.
The deadline to contribute is 7 December with the results expected in early January 2016. Legislative proposals will follow
shortly after.

Needs for internet speed


and quality beyond 2020
The Commission wants to hear from users across all sectors,
especially those who develop applications and services dependant on connectivity, about European broadband needs
in terms of speed and quality, and to learn more about
foreseen market developments in fixed and mobile digital
networks. The purpose is to provide input to the design and
the implementation of EU policy, regulatory and funding
instruments that can contribute to fostering investment in

the deployment of future-proof connectivity networks. This


consultation runs in parallel to the other and will focus on
the review of the 2009 Telecoms Package, examining to what
extent the EUs telecoms rulebook needs to be modernised
to address technological and market challenges. It asks
about the future of network access regulation, spectrum
management, communication services, universal service and
telecoms governance. Following the evaluation process, the
Commission will present its proposal on how to address the
identified challenges in telecoms and broadband. Earlier this
year, EU institutions agreed on strong net neutrality rules
protecting the right of every European to access Internet
content without discrimination, at the same time agreeing on
the end of roaming charges by June 2017. These public consultations will run until 7 December.

Priority ICT standards plan


On 23 September, the EC launched a public consultation to
gather stakeholders views on standards in key technologies
that are crucial to the functioning of the DSM, e.g.: 5G communications, cloud computing, cybersecurity, data driven
services and applications, eHealth, Intelligent Transport
Systems (ITS), Internet of Things, Smart Cities and efficient
energy use.
Standards are developed by a number of different actors as
part of a voluntary process, which is consensus-oriented.
The EU can help create the scale necessary for standards
development and ensure that such standards reflect as much
as possible the European interests.
The contributions to this consultation, which runs until 16
December 2015, will feed into the development of the upcoming EU priority ICT standards plan.

Rolling out fast broadband for all


Take-up of fast broadband is low: only
22.5% of all subscriptions are fast
ones (above 30Mbps) and Europe has
witnessed significant time lags in the rollout
of the latest 4G technology due to
the non-availability of suitable spectrum.

Spectrum reforms can decrease


prices of mobile services and
boost productivity over time
(estimated EU-wide GDP
increase between 0.11% and
0.16% over 5 years)

59%
Only 59% of Europeans can access 4G,
dropping to 15% in rural area

15%
Source: The European Commission

Creating a
European Digital
Economy and
society with
growth potential
Digital data
stored in cloud
Online platforms, cloud & data, liability of
intermediaries, collaborative economy
Through the long-awaited consultation launched on 24
September, the EC wants to better assess the social and
economic role of online spaces where providers and users
of content, goods and services can meet (such as internet
search engines, social media, knowledge and video sharing
websites, news aggregators, app stores and payment systems).
The consultation covers a wide range of issues, notably:
transparency in search results, terms of use, ratings and
reviews, the use of information by platforms; the relation
between platforms and their suppliers; the conditions of
switching between comparable services offered by platforms, the role of online intermediaries including ways to
tackle illegal content on the Internet. The consultation is
also collecting views on the liability of intermediaries as regards illegal content hosted online and how to improve the
free flow of data in the EU and to build a European Cloud.
Finally, it is looking into the role of platforms in the collaborative economy and their impact on rights and liabilities,
innovation and consumer choice.
This consultation, which runs until the end of December
(exact date to be confirmed), is the first step in the Commissions examination of the issues around platforms, and will
feed into a comprehensive assessment on the role of platforms and intermediaries planned for the first part of 2016.

Geographically based restrictions when


shopping and accessing information in the
EU
On 24 September, the Commission launched its consultation on geo-blocking and other forms of geographically-based restrictions. The EC aims to gather views
on unjustified commercial barriers which prevent from
buying and selling products and services within the EU.
The consultation identifies known examples, and contains
questions to gather more real-life experiences. It covers,
for example, customers who are charged different prices or

2013: 20% - 2020: 40%

The use of big data by the


top 100 EU manufacturers
could lead to savings worth
425 billion
Studies estimate that, by
2020, big data analytics
could boost EU economic
growth by an additional
1.9%, equalling a GDP
increase of 206 billion
Source: The European Commission

offered a different range of goods depending on where they


live, but it does not cover geo-blocking in relation to copyright and content licensing practices.
The consultation, which runs until the end of December (exact date to be confirmed), will help the Commission prepare
legislative proposals in the first half of 2016 to end unjustified geo-blocking, which could include targeted change to
the e-Commerce rules and to the Services Directive. Separately, the Commission is also investigating geo-blocking
and related issues in a Competition Sector Inquiry on the
application of competition law in e-commerce.

Modernising VAT for cross-border


e-commerce
On 25 September, the Commission launched its consultation
on simplifying VAT payments on cross-border e-commerce
transactions in the EU. The consultation covers in particular:



the extension of the current single electronic registration and payment mechanism to cover the sale of
tangible goods;
the introduction of a VAT threshold to help online
start-ups and small businesses;
allowing cross-border businesses to be audited only
by their home country for VAT purposes;
removing the VAT exemption for the import of small
consignments from suppliers in third countries.

The consultation will run until 18 December. It will feed the


legislative proposal to reduce the administrative burden on
businesses arising from different VAT regimes the EC has
planned for 2016.

EU Campaign for Cybersecurity


European Cyber Security Month (ECSM) is an EU advocacy campaign that promotes cyber security among citizens and advocates
for change in the perception of cyber-threats by promoting data and
information security, education, sharing of good practices and
competitions. The European Union Agency for Network and Information Security (ENISA), the European Commission DG CONNECT and a wide range of partners are deploying European Cyber
Security Month (ECSM) throughout Europe during October. The
objectives of the European Cyber Security Month are:

generate general awareness of cyber security, which


is one of the priorities identified in the EU Cyber
Security Strategy;

generate specific awareness on Network and Information Security (NIS), which is addressed in the
proposed NIS Directive;

promote safer use of the Internet for all users;

build a strong track record to raise awareness


through the ECSM;

involve relevant stakeholders;

increase national media interest through the European and global dimension of the project;

enhance attention and interest with regard to information security through political and media coordination.

To know more about the national initiatives, get the EU cybersecurity toolbox and get involved check :
https://cybersecuritymonth.eu/

Small online businesses wishing to trade


in another EU country face a VAT compliance
cost of at least 5,000 annually for each
Member State where it wishes to supply

An inclusive e-society
Almost half the EU population
(47%) is not properly digitally
skilled, yet in the near future,
90% of jobs will require
some level of digital skills

A strategy of digital
by default in the
public sector could
result in around 10
billion of annual savings

Source: The European Commission

Energy

EU Strategy Package on Natural Gas


and LNG to be unveiled early next year
The EC is working at revamping its approach to natural gas,
with a Strategy Package due out early next year that would
give the Commission the right to take a look at sensitive
long-term supply contracts and take steps to ensure the bloc
is more resistant to external supply shocks. The Package is
also expected to include a Liquefied Natural Gas (LNG) strategy.
A key measure in the making to undercut the market power
of Russias Gazprom is to allow the Commission to have
more access to information and review a set of particularly
important gas supply contracts that lock European countries into long-term deals with the Russian gas giant. To
further boost transparency of energy agreements, the Commission is also intent on looking at inter-governmental gas
agreements before they are signed.
Regarding infrastructures, European Commission Vice-President Maro efovi has further urged the creation of additional Liquefied Natural Gas (LNG) terminals in the South
Eastern Member States in preparation for a shift in focus to
LNG supplies. Current proposals are for an increase in the
use of LNG currently accounting for 25% of all EU energy
by reaching out to new suppliers. Currently Algeria, Qatar
and Nigeria are the EUs suppliers but this is to be expanded
to include Australia, the United States and Canada. Opening
the market to new suppliers and increasing imports by a
projected 40% could also drive down current costs and
compensate for decreasing domestic gas production which
has fallen by 25% over the last five years. Based on the responses to the public consultation on LNG, which concluded on 30 September, the Commission will consider future
measures including revisions to the existing Gas Security of
Supply Regulation.

Electricity market interconnections


One of the main challenges facing the Energy Union is the
lack of interconnectivity between Member States to allow the
transfer and trade of energy across national markets. In late

July, the European Commission adopted new rules governing its electricity market that enable a mechanism known as
market coupling to be implemented legally across Member
States electricity markets. The new regulation will allow
cross-border cooperation between national power exchanges
and bring them together as a more integrated market where
bids and offers for services from providers can be made
across borders with greater ease.
Commission Vice-President efovi has been promoting investment to ensure sufficient infrastructure to link national
grids together. Recent investment has seen the construction
of a 190km power interconnection linking France and Italy
via the Alps. Interconnectivity infrastructure will not remain
exclusive to the EU. During a recent conference of Western
Balkan states, efovi underlined the need to develop such
a project beyond EU borders and ensure the interconnection
of Albania, the Former Yugoslav Republic of Macedonia
(FYROM), Serbia, Montenegro, Bosnia and Herzegovina,
Romania and Serbia. This move not only intends to enhance
connectivity in South Eastern Europe, but is also a means to
begin investment in Balkan infrastructure ahead of the accession of EU candidate countries in the region.

COP21 EU mandate
After several months of negotiations, EU environment ministers agreed in September on the COP21 blocs mandate
for climate change talks, calling for a long-term goal to cut
greenhouse-gas emissions by at least half by 2050 compared
with 1990 levels, and to be near zero or below by the end of
the century.
Those targets are slightly different from those envisaged by
the European Parliament. On 22 September, the Environment Committee stated that the Parliaments delegation to
the COP 21 climate talks in Paris must call for a 40% cut in
greenhouse gas emissions by 2030, a 40% energy-efficiency
target and a binding 30% target for renewable energy. The
Committee also wants a share of the EUs carbon market
allowances to be earmarked for climate finance, and for the
aviation and shipping sectors to initiate measures to curb
their emissions by the end of 2016. The full House will vote
on 14 October.

Financial Services

As regards financial services, two upcoming initiatives are


worth being outlined: the Action Plan on Capital Markets
Union and the Green Paper on Financial Retail Services and
Insurance.

Action Plan on Capital Markets Union

The Capital Markets Union seeks to ensure the diversification of sources of finance to allow companies, particularly SMEs, to tap into capital markets and gain access to
non-bank financial means such as credit. The action plan
presented on 30 September by the Commission sets out the
priority actions needed to put in place the building blocks
of a Capital Markets Union by 2019, removing barriers to
cross-border investment and lowering the costs of funding.
Together with the Action plan, the Commission has also disclosed a few immediately operational initiatives. These cover:
A legislative proposals to establish a framework for simple, transparent and standardised securitisation and to
set out new prudential calibrations for banks in the Capital Requirements Regulation (CRR);

An adjustment to the Solvency II legislation to make it


easier for insurers to invest in infrastructure and European Long Term Investment Funds (ELTIFs);
A consultation on how to build a pan-European covered
bond framework;
A call for evidence on the cumulative impact of financial
services reforms, with the objective of assessing the
interactions between rules and cumulative impact of the
reforms adopted in the recent years;
A consultation on venture capital to assess whether targeted changes to the regulations could boost the take-up
of these investment funds.

Later in the year the Commission will review the Prospectus


Directive to reduce barriers to smaller firms listing on markets, and publish a Green Paper on retail financial services
to boost consumer choice and competition in cross-border
retail, financial services and insurance. Likely issues to be
addressed by the Green Paper include market fragmentations, lack of confidence in national retail financial markets,
low cross-border consumer activity and problems with the
perceived transparency of financial institutions.

Image: The European Commission

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Leonardo Sforza
leonardo.sforza@mslgroup.com

Nicolas Acker

nicolas.acker@mslgroup.com

Olivier Hinnekens
olivier.hinnekens@mslgroup.com

Romain Seignovert

WWW.MSLGROUP.COM

Twitter
@MSL_BRUSSELS

Office

Square de Mees 23, 1000 Brussels, Belgium

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romain.seignovert@mslgroup.com

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