Interview for komerso.pl
What benefits and opportunities will the Digital Single Market bring to companies and consumers? What barriers can it meet and what are the forecasts? Will it affect the future of the e-commerce industry? Among other things, these questions are answered by Marlene ten Ham.
Some time ago we had a great pleasure to interviewed Marlene ten Ham who is the Secretary General of Ecommerce Europe, the European umbrella organization which represents 75,000+ companies that sell products and services online to consumers. Her main goal is to stimulate the growth of cross-border e-commerce by creating a better European policy landscape for online companies. Marlene has extensive experience in translating issues into concrete strategies and policies, and in implementing these. Her position on the Digital Single Market is presented below, answering the questions we have asked.
Monika Kuchta: What is Digital Single Market?
Marlene ten Ham: The Digital Single Market Strategy was presented by the President of the European Commission Jean-Claude Juncker in May 2015. It is composed of a total of 29 legislative proposals, if we take also into account the mid-term review of the DSM Strategy presented in 2018, all aiming at “unlocking the digital potential of Europe”. Some of the proposal focus on e-commerce specifically, with the underlying objective to stimulate the cross-border aspect of e-commerce in the EU. This objective is perfectly in line with the mission of Ecommerce Europe. Some of these proposals have already been adopted, while others are still in the legislative process.
What are the major benefits and opportunities for business and consumers (also predictions)?
The main benefits and opportunities linked to the DSM is the overall progress towards the simplification of certain rules and a higher level of harmonization in various areas. The VAT in Ecommerce package is an example of positive reform aiming at facilitating the daily business of online merchants in Europe. The Parcel Delivery Regulation, supposed to make prices more transparent and in theory reduce costs of deliver, is another example of benefit for online shops, but also online shoppers. Other proposals, which aim at achieving full harmonization in contract law for instance, would also be very beneficial for the sector. However, these proposals may remain stuck in discussions at Parliament and Council level, which sometimes tend to “sacrifice” full harmonization.
For businesses, full harmonization is the only way forward to make sure the sector can develop further, specifically across borders. For consumers, a real Digital Single Market would also represent a true added value. For instance, consumers would have more knowledge of their rights and obligations, since – in an ideal and for now not achievable scenario – all the laws would be the same across the EU. On the long term, the Digital Single Market also aims at the digitalization of society by investing in digital skills and infrastructure, thus allowing the reach of e-commerce to expand over time.
What are the biggest barriers of DSM? (e.g. consumer trust, geoblocking, regulations, costs, etc.)
Considerable work remains to achieved a harmonized Single Market and address the remaining barriers that online merchants face. According to two studies performed by Ecommerce Europe in 2015 and 2016, the three biggest barriers identified by merchants selling cross-border are legal fragmentation in the EU, taxation related issues (i.e. VAT compliance) and parcel delivery. While some legislations have been proposed to address these issues, the European Institutions should also focus on making legislation that is as much as possible understandable. Easy rules mean easy compliance and more legal certainty for both the consumer and the trader. Moreover, any new law should be future-proof and channel-neutral. We must not forget that the “omnichannel” is growing more and more. Consumers want the opportunity to use all possible channels to buy and possibly return products. The border between online and offline is therefore destined to disappear. Therefore, the laws must be adapted or created accordingly.
You also mentioned geo-blocking, but geo-blocking as such is not a barrier in our opinion. We believe that geo-blocking is a consequence of all the barriers we mentioned before. The Regulation adopted by the EU on geo-blocking defines situations where sellers cannot treat consumers differently. This regulation will be applicable from December 3rd of this year. In our opinion, the effects will not be far-reaching, as consumers will still have to pick up their purchases in the country where the e-merchant already operates. E-merchants must remain free to decide in which areas they want to develop, so the regulation does not oblige sellers to deliver anywhere in Europe, because that would be a huge administrative burden. As I mentioned, geo-blocking is due to the lack of harmonization of laws in Europe, tax systems that are too complicated to deal with and parcel delivery related issues. It is by acting on these three fronts that we would reduce geo-blocking.
How DMS could impact on e-commerce?
It is difficult to answer this question. If properly implemented, a fully harmonized Digital Single Market, could have a very positive impact on e-commerce. However, it is early to say if all the proposals dealing in one way or another with e-commerce would bring the expected results. Laws should be balanced, which means also not imposing unreasonable burdens on the industry without any real benefit for consumers. Rules should also allow innovation to flourish and not kill it. To summarize, some proposals may not achieve such a balanced approach such as the ePrivacy Regulation, widely disputed by the industry. The role of Ecommerce Europe and its 20 national associations is to be proactive, vigilant and act consequently so that e-commerce further develop.
What is the one major change for online shopping and online retailers?
From the perspective of Ecommerce Europe, the main aspect of the future of e-commerce is the fading distinction between online and offline shopping. We are now talking about digital commerce rather than e-commerce because, at the end of the day, it stays “commerce” regardless if it happens online or offline. We are moving towards a sector where omnichannel will be the key. The market is also becoming increasingly consumer-centric, and this is one of the major evolution e-commerce will have to face. The evolution of consumer behavior is shaping the sector and leading to innovation, for example in logistics through improved track-and-trace services or in payments with the development of contactless payment or biometrics features.
What are the plans for the near future?
The agenda of the European Institutions in relation to the DSM will be particularly hectic in the coming months, since the end of this EU mandate is approaching soon, with new EU elections in May 2019. The European Commission has therefore insisted that all the legislative proposals should be agreed on before the end of the year. However, this is unlikely to happen because of difficult negotiations on some key dossiers, for example on the ePrivacy Regulation.
The most important proposals that are still in the legislative process include the ePrivacy Regulation, which has been subject to strong criticism by the industry and the Regulation promoting fairness and transparency for companies using online intermediation services, such as marketplaces, which is based on key principles that would normally clarify the relationship between platforms and e-retailers. However, next to the DSM proposals, there are some other proposals now on the table of the policymakers which can also have an effect on e-commerce, in particular the very contested proposals to tax the digital economy, and the New Deal for Consumers package, which includes positive elements for the sector but also dangerous ones.
Online merchants will have to face a very intense period, during which they will have to adapt their businesses to comply with new rules. Ecommerce Europe and its national associations are there to support them.