Report: The EU Single Market in the Digital Era – from legislative complexity to clarity

This report provides an overall picture of how the European Union is adapting its single market legislation to the digital economy and a digital reality. Karin Atthoff, the author of the report, tells more.

What exactly is the report about?

Each new legislative initiative for the digital economy receives considerable attention and is analysed in detail. Attention also needs to be paid however to the overall picture and how various new initiatives and existing legislation interact, along with the challenges that arise in the transition to an increasingly digitalised single market. With this report, we seek to contribute with such analysis.

Why is the National Board of Trade investigating this issue?

In the EU’s Single Market, the aim is that a single set of rules should apply in the entire area. Trade should be as easy between countries as within them. For this to work, Single Market legislation must, for example, be applied as consistently as possible in all member states . It is therefore worrying that many stakeholders perceive EU legislation adopted for the digital economy as all too complex, that different rules seem to overlap or impose similar requirements, and that it is far too difficult to understand how it will work in practice.

This lack of clarity creates challenges for businesses, which find it unclear what regulatory requirements are actually imposed on them and what they need to do to be in compliance. It is also problematic for the governmental ministries and other public authorities responsible for implementing and applying the legislation in the Member States. The National Board of Trade works for a well-functioning Single Market. We therefore monitor and analyse developments and make proposals on how such challenges can be best addressed.

You categorise the challenges identified into five areas. Explain!

We identify tendencies in the decision-making processes for “digital” EU legislation that can lead to barriers in the Single Market. These include incomplete evidence bases, the risk of overlapping legislation, and too much divergence in its application at the national level. Naturally, legislation must reflect a complex reality. But overall, these tendencies seem to contribute to the perception that legislation for the digital economy in the EU is too complex.

Another problem is that there is a lack of clarity about concepts that are often used in this context. Such as the concept of the Digital Single Market, which may have outlived its usefulness now that digitalisation permeates most aspects of the Single Market. It is far from clear which policy and legislative areas are “digital” and which are to be considered “non-digital”.

What are the main conclusions?

Single Market legislation needs to be developed in line with the principles of effective and efficient regulation agreed upon at the EU level. These are expressed, for example, in the EU’s Better Regulation Agenda. This of course also applies to legislation for the digital economy. This of course may sound obvious, but it is worth emphasising, especially as “digital” is often discussed as something separate from the rest of the Single Market.

There are well-established tools and processes in place in the EU to deal with the kind of problems we identify, but they need to be utilised. Work is also underway at the EU and national levels to complement and reinforce existing processes and tools with those enabled by digital technology. This has the potential, under the right conditions, to support work to enhance the Single Market.

What needs to happen?

To overcome the confusion that has arisen, the European Commission in particular needs to allow time for legislation to be fully applied and enforced and then for the actual effects to be evaluated. Much work needs to be done to clarify and explain how legislation for the digital economy is meant to work in practice.

We also want to see the EU institutions live up to their commitments in the area of “better regulation.” This includes producing complete evidence bases for new initiatives along with monitoring and evaluating legislation already adopted.

What is the National Board of Trade Sweden?

The National Board of Trade is the Swedish government agency for international trade, the EU internal market and trade policy. Our mission is to facilitate free and open trade with transparent rules as well as free movement in the EU internal market. We provide the Swedish Government with independent analyses, reports and policy recommendations and take into account the views of businesses of all sizes in international trade policy-related matters.