The DSM strategy at half-time

In Blog by Hosuk Lee-Makiyama0 Comments

Today, the European Commission has published its “half-time results” on the Digital Single Market project. Any exercise in self-assessment ought to be taken with a pinch of salt, and this is no exception.

As expected, the Commission’s half-time report is a mixed bag of nuts. Brussels hails DSM as a success even in areas where it didn’t do enough – like audiovisuals; it calls for more action on areas where Europe cannot act as one – like stepping up investments in fibre and 5G, or help funding startups.

And the report is contradictory in one area that really matter: Economic growth.

The Commission vows to implement protectionist and anti-digital policies on messaging, advertising and platforms that would slow down digitalisation; the report “makes clear that there is no more time to lose to turn political commitments into reality” – but politics can’t make facts disappear. The Commission continues to justify its case for DSM on the promise of 400 billion euros in growth, but the EU can’t build a more innovative data economy by restricting data use. It simply doesn’t add up. Perhaps it is telling that the Commission’s department for digitalisation is amongst the few that does not have a chief economist.

Meanwhile the public opinion is clear. For example, the experts of the Politico Caucus are damning in their assessment: The three areas where DSM has put most of its efforts – copyright, data flows and privacy – are also the areas where the Politico poll indicate the EU has done the poorest job creating a real Digital Single Market.

We at OPEN authored a half-time report of the DSM strategy earlier this year, and its conclusions are clear: The EU DSM strategy is not fit for its purpose. Europe must stop protecting French and German analogue-age corporate dinosaurs by trying to slow down digitalisation. Exposing ossified offline sectors to online competition is not a problem – it’s progress.

To ban data localisation and allow free flow of data internally within the EU is a promising start that could generate €8 bn annually. But it is still 392 billion short of the Commission’s promise. To deliver new growth of that scale, the EU must review all its rules on offline markets. Many of them no longer make sense in the digital age.

Europe must keep its digital markets open to the rest of the world, not fragment the global internet. Europe simply can’t side with China, Russia and other countries that wage war against openness using security and privacy as a pretext.

Open Up: How to fix the flaws in the EU’s Digital Single Market