EU’s Digital Single Market Strategy leak: sharing economy, OTT services and VAT

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A leaked copy of the EU Commission’s Digital Single Market Strategy, obtained by Politico, suggests that online platforms, including search engines, social media, ecommerce, app stores, price comparison sites, along with sharing economy players, will face much greater scrutiny and potentially “top-down” regulation in the coming years.

The document particularly refers to the fees charged by these platforms to commercial partners and consumer awareness of things like Google’s paid search, plus the over-the-top VoIP providers, services like Skype and WhatsApp, which look set to be regulated in order to level the playing field with traditional telcos.

A common EU-wide VAT threshold for small businesses selling goods and services is also being discussed, something that’s been welcomed by traders, more than 350,000 of which were shocked when previous changes to these rules were implemented last year. A report from the SME network Enterprise Nation heavily criticised the regulations, conceived way back in 2008 when Apple’s App Store was only in its first year of trading.

Emma Jones, founder of Enterprise Nation, said: “The EU VAT regulations caused havoc in the digital small business community.  If details of the new charges and reporting responsibilities had been communicated earlier, we’re sure there could not only have been more opportunity to make amendments to the bill, but that a thoughtful entrepreneurial solution to the problem could have been developed sooner.”

Geo-blocking of websites would have to be loosened under the Commission’s proposals, in exchange for a more aggressive enforcement of copyright. Open data is now also on the table, via “free flow of data initiative”, which would overturn member states’ restrictions on data storage. In addition, the Commission is hoping to create a “European cloud” to enable cross-continent research.

Digital government proposals, meanwhile, including connect e-government services and resulting digital procurement, could open up new money to SMEs.

The strategy entered into service consultation yesterday and is set to be released on May 6, but any changes are unlikely to come into force until 2018.

On these cross-border standardisation and interoperability on digital issues, one comment on the document suggested the Commission could take a “top-down” approach to getting it right.