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The EU’s Better Regulation Agenda is a timely contribution to the digital policy debate

In case you missed it, last week (May 19) the European Commission presented its ambitious Better Regulation Agenda.[1] Its noble aim is to “improve the quality of new laws through better impact assessments”, public consultation, openness, and transparency in the EU decision-making process. It is laudable that the Commission wants to “rigorously assess the impact of legislation in the making…so that political decisions are well-informed and evidence-based.”

One policy area can in particular benefit from these better regulation principles:  “The digital economy is a better regulation challenge,” the Commissioner responsible for the Better Regulation Agenda said yesterday.  This policy area is characterised by rapid innovation, disruption, technical complexities, confusions, and jurisdictional overlaps.  These features have traditionally made digital policy challenging for regulators.  The Commission presented on May 6 its new Digital Single Market Strategy outlining the EU’s regulatory focus on digital policy in years to come.

Let’s have a look at whether the EU lawmaker adheres to its principles of better regulation using its Digital Single Market Strategy as a test case.  I will focus this (admittedly non-academic) test on the two most controversial areas in the Strategy: “Duty of care” and “Platform regulation”

Case 1:  Duty of care

Civil society and industry were horrified to learn of the Commission’s consideration of introducing a new duty of care principle.  Following the terrorist attacks in January this buzz word appeared in the Brussels policy machinery.  The idea seemed to be that online platforms should actively monitor users’ behavior to prevent future terrorist attacks (Minority Report, anyone?).  The duty of care idea however originally seems to have been conceived by the French luxury brand, Louis Vuitton Moet Hennessy (LVMH).  The Commission’s Better Regulation Agenda states that “many citizens are concerned with what they perceive as an undesirable level of EU involvement in their daily lives.”  The EU forcing online service providers to actively monitor users’ online behaviour to prevent counterfeit sales of luxury handbags seems to be “an undesirable level of EU involvement” in our daily lives.  It would also impose new and expensive red tape on online companies, such as small startups, and a considerable danger of them taking down too much legal content whenever in doubt of its legality.  Most important of all, it would introduce obvious risks to online freedoms.

Case 2:  Platform regulation

The French and German governments have in the past year sent several joint letters calling for regulation aimed at Internet platforms popular with European consumers.  POLITICO has, based on leaked drafts, reported that the Commission was “ready to propose vast regulatory reforms” before having concrete evidence suggesting any real need for such regulation.

Conclusion:  The Digital Single Market Strategy – A prudent approach (thus far)

Despite the obvious pressure from certain lobby groups and big Member States to have the Commission announce “proposals” on both topics, the Commission wisely chose to launch a “comprehensive analysis” to first identify if any problems exist.  In line with the better regulation principles the Commission announced a public consultation to hear stakeholders’ views.  Based on this consultation and objective impact assessments, one can expect the EU executive to carefully conclude whether there is any merit for EU-action – which should be proportionate and not create new bureaucratic red tape.

The Commission has wisely decided to take a prudent approach to both regulatory areas.  I, naively perhaps, dare to hope that the better regulation principles will help safeguard against any cutting of corners for political reasons.  Whether the EU executive will fully adhere to the principles of better regulation remains to be seen.

The enormous success of the Internet is largely due to the wise and humble decisions by governments to enable the Internet to flourish by not over-regulating it in its infancy.  The EU’s better regulation principles may turn out to be a valuable contribution to global discussions on how to regulate the fast-changing digital industry.  A prerequisite for being a role model of “better digital regulation” is that the Commission fully adheres to these principles.  The EU lawmakers may well find that by adopting these principles it will avoid many unintended consequences, and truly enable the digital economy.

[1] Almost every year the EU’s lawmaker presents a document on the better regulation theme. The May 19 “Better Regulation Package” is just the latest in a long series of similar EC attempts, e.g. 2001 White paper/Smart regulation action plan, 2003 Inter-institutional Agreement on Better Lawmaking, 2007 Action Programme for Reducing Administrative Burdens in the European Union, the 2010 Better Regulation in the European Union Communication, 2012 Staff Working Document “Action Programme for Reducing Administrative Burdens in the EU”, 2012 Commission communication on “regulatory fitness”, 2014 EC Communication on “Regulatory Fitness and Performance Programme (REFIT): State of Play and Outlook” and the Annual reports on Better lawmaking.

European Union

DisCo is dedicated to examining technology and policy at a global scale.  Developments in the European Union play a considerable role in shaping both European and global technology markets.  EU regulations related to copyright, competition, privacy, innovation, and trade all affect the international development of technology and tech markets.