Insights UK signs joint letter to European Commission in relation to digital platforms and the need to avoid cumbersome regulation.

Eleven Member States, including the UK, have signed a joint letter to Vice-President Ansip at the European Commission about digital platforms, asking that the Commission take the points below into account when considering the development of policies and initiatives relating to the role of digital platforms within the Digital Single Market Strategy:

  • platforms should be primarily seen as an opportunity, not a threat: platforms are creative, innovative and drive growth and competitiveness, the letter states. They offer advantages for businesses and consumers alike.  It is therefore important that platforms are allowed to continue to be the drivers of innovation and to meet customer demand;
  • platforms are already subject to significant regulation: platforms must operate within the law and the existing regulatory framework should be used to solve any concerns about the way platforms operate, whenever possible, the letter states. Existing legislative and non-legislative instruments, including data protection law, competition law and consumer law, already apply to platforms and can be used to regulate them.  In addition, the role of industry self-regulation should be explored fully as this may often be more appropriate and effective than government regulation in the fast pace of the digital world.  In the first instance, the focus should be on implementing existing laws effectively and consistently rather than adding to the burden of regulation on businesses;
  • platforms must not be hampered by cumbersome regulation: platforms are hugely varied and cover a wide range of business models. Policy questions are therefore rarely applicable exclusively to platforms, and when they are, they are limited to a subset of platforms, the letter states.  Adoption of new ex-ante regulation targeting online platforms as a segment of the digital economy is not desirable unless there is clear and compelling evidence of need, as there is a high risk that such new regulation would be ill suited to the dynamic nature of the sector.  Introducing legislation that might act as a barrier to the development of new digital business models and create obstacles to entry and growth in the European digital market should be avoided.  Such legislation might have an unintentionally damaging effect on the innovation, competitiveness and economic growth of the European digital industries;
  • the development of European platforms in Europe is best supported by providing the right conditions for growth: this can be achieved by working to complete the Digital Single Market, updating existing regulation to make it fit for a digital age, lightening the burden of regulation for small, innovative businesses and encouraging ease of access to finance through the Capital Markets Union package, the letter says. Innovative new business-to-business platforms that support technology, such as the Internet of Things, will benefit from a stable and clear regulatory environment. This line of action will encourage the growth and development of European platforms by providing a dynamic and competitive environment, which further regulation is not well placed to do.

To read the letter in full, click here.