KGOU

EU Strives To Create A Digital Single Market To Boost Commerce, Improve Cybersecurity

Jan 26, 2018

Retailers and consumers in the European Union face barriers when trying to conduct business online. An effort to implement a digital single market could change that.

The EU’s digital single market, or DSM, plan could improve e-commerce across borders within the union, modernize copyright regulations and improve cybersecurity, among other goals.

Andrea Glorioso, counsellor for digital economy for the EU’s delegation to the United States, says the DSM would create an area of common trust.

“What we're trying to do is to make sure that the adoption of digital technologies does not inadvertently result in fragmentation within the common market,” Glorioso told KGOU’s World Views.

Among the issues that Glorioso and the EU are trying to address is geoblocking, the practice in which an e-commerce provider blocks access to its shops for people from certain countries. It can also be used to charge higher prices for people in other countries.

“I'm an Italian citizen, I go to France, I go to baguette shop. I want to buy a baguette. There's no way that the seller can ask for my passport, and can say, 'well, you're Italian, not French. Therefore, I'm going to do double price for that baguette.' That just cannot happen. And yet it happens quite frequently online. It's just one example of things that we're trying to address,” Glorioso said.

Additionally, Glorioso said there are several proposals to improve privacy and cybersecurity in the EU. He believes these measures could help improve commerce.

“Consumers, business people - they are not using digital technologies as much, including the internet, as much as they could,” Glorioso said, “because they don't trust very much those technologies. It's not clear what happens to your private data.”

INTERVIEW HIGHLIGHTS

On avoiding fragmentation within the EU’s common market

What we're trying to do is to make sure that the adoption of digital technologies does not inadvertently result in fragmentation within the common market. I can give you one very simple example. One common example is this practice which we call geoblocking. And this [is a] practice through which a company, an e-commerce provider, based for example in France. There is that technology today through which that provider can block access to it's online shop from citizens who are trying to buy from Italy. Or even worse, it applies different prices for completely unjustified reasons to citizens of Italy and to Germany.

On creating trust through the digital single market, or DSM

It's quite interesting to see that both in Europe and in the US, which are the two parts of the world that I know best, time and again through scientific surveys it's very clear that citizens, consumers, business people - they are not using digital technologies as much, including the internet, as much as they could, or sometimes they want to, because they don't trust very much those technologies. It's not clear what happens to your private data. Look at your country. The latest breaches of Equifax and others. It's staggering if you think about it that this kind of stuff can happen.  You don't have ... people feel they don't have real control over their online activities. And so this is what we're trying to do with the DSM.

On improving access

The question of how do you make sure that as many citizens and businesses as possible have access to the Internet. You know, the state or the government, public authorities, have a role to play. Absolutely. And by the way, we do through our structural funds or regional funds, we have as the Union, we have supported many projects, especially in the least-developed regions of our member states. At the end of the day, however, the kind of money we're talking about in order to build the infrastructure that is needed to provide this access has to come from the private sector. And there was a business case for it because people want to have access. So what we're trying to do from a regulatory point of view is to modify our telecommunication framework to make it easier for large communications companies to invest.

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FULL TRANSCRIPT

Rebecca Cruise: Andrea Glorioso, welcome to World Views.

Andrea Glorioso: Thank you.

Cruise: So you are an EU diplomat. You represent the EU mission to the United States dealing specifically with digital economy and cyber issues. I think if we could maybe step back and talk a little bit about what exactly the EU mission to the United States is. Most people obviously are aware of the fact that the United States interacts with individual member states of the EU so we have relationships with Germany, France and others. But what exactly is our relationship with the EU mission and with the EU in general?

Glorioso: Absolutely. And that is a very common question by the way. And the first thing to keep in mind is that indeed this hopefully is clear, we as the European Union diplomatic representation, we do not represent the member states themselves. They have their own bilateral relations with the US. However if you look at the institutional framework of the European Union you will see that there are certain policy or regulatory areas where the union has either exclusive competence - trade is a classic example - on international trade. The Union, usually represented by the European Commission, is the only actor which is which allowed to negotiate on the basis of the negotiating mandate, usually by the member states. And there are there are other areas where you have so-called mixed competences. So the member states legislate together and gives certain powers to the Union to act. Now this is the theory and practice is sometimes more complicated but in theory, for those policy or regulatory areas where the Union has that exclusive or mixed competence, it is the European Union which is expected to diplomatically present Europe vis-a-vis third parties which might be the United States or other. As I said, this is the theory because then of course every member state has its own interests. But I would say though that with very few exceptions, certainly during my my lifetime so to say in the U.S., there was a great cooperation with our member states. It's very uncommon that, you know, the Union, the European Union diplomatic missions say something, and one of the member states contradicts hopefully will the European Union does or vice versa. So we work very closely together.

Cruise: And have for quite some time. I understand the mission has been in DC for several decades now.

Glorioso: It has yes I don't know the exact date but it must be I think at least 20 years if not more.

Cruise: And you're dealing specifically, as I said, with digital economy and cyber issues. And this brings us to something known as the digital economy, which both sounds kind of self-explanatory and a little confusing all at the same time so maybe you could tell us a little bit about what is meant by "digital economy." And then also what is meant by a digital single market something that the European Union has become very interested in pursuing and in fact in 2015 kind of codified this as a goal for moving forward and has taken some really fascinating steps to advance a digital single market.

Glorioso: Sure. Let me say first of all that I sometimes have a feeling that the term "digital economy" is one of those things that we civil servants or diplomats call an example of diplomatic ambiguity. It is those terms that we don't really define it because it would be too difficult to define them as soon. As we start to define them, we discover that we actually have a different understanding of what the term means and we don't necessarily want to go there. I would also say that personally speaking, that's a very personal opinion. As you mentioned my job title is in the Diplomatic Council for the Digital Economy, and I always told my superiors, you know, I'm not sure the title makes a lot of sense, because can we define today in 2017 and can we define what's the non digital economy?

Cruise: Right because digital economy is ...

Glorioso: It might have made sense, I sort of remember when I when I joined the commission back in 2007 and even when I was posted, which makes me feel like a package, but that's the diplomatic term when I was sent to Washington DC. My portfolio was, in a way it's supposed to be much more limited - telecommunication policy and stuff that is kind of linked to telecommunication policy including cybersecurity and other similar things. But I very soon realized that, you know, we start talking about transportation policy, and then you have autonomous driving. We start to talk about taxation policy, and you have the question, how do you tax or what's the fair way to tax activities, which are almost by definition cross-border it's very difficult to identify what's the proper jurisdiction.

Glorioso: My point is that in this field, and I find it a fascinating aspect of the kind of things that I do, but there is a complication that these technologies have permeated so much all of our activities that in a way it has become very difficult to separate the digital elements from the non-digital elements. Having said that, I still believe there are certain policy regulatory angles that are more specific to the digital economy. For example, when it comes to cyber security, to online privacy, to the impact that robotics and artificial intelligence will have are already having, by the way, but would certainly have on many different societal and economic activities. Now to be clear my job as a counselor here in the US is not to do policy. That's not the job of diplomats or diplomatic missions. Policies or regulation is done in headquarters in the capitals. My job is really to make sure that what we're doing in the European Union, including the Digital Single Market Strategy, which I get to in a moment is well understood here in the U.S., which frankly is not the case always for many reasons. Also because, you know, if you think you understand what's happening in Europe by only reading American newspapers, you are understanding as little as Europeans who think they understand what's happening in the U.S. by reading European newspapers.

Cruise: Great point.

Glorioso: There is a need sometimes to be out there and explain more in detail and especially to avoid misunderstandings. That's really a core part of my mission. I would say just again to be clear that an equally important part of my mission or my job and of all my colleagues in the delegation is to make sure that our superiors, our capital Brussels, the people in Brussels and the international capitals, really understand what is going on in the U.S., which is different from again a reading. I'm sure that most of them can can go to the internet, not all of them, but most of them can probably go on the Internet and factually see what's happening but they don't necessarily have the context for what's happening. So that's a big part of our job in whatever field with the with. Now as part of kind of explaining, doing outreach, which is one of the reasons why I'm here in this wonderful state, in the wonderful state of Oklahoma, one of the reasons why I'm here is to explain what we're trying to do with the Digital Single Market Strategy. And that at the end of the day is actually pretty simple, and it's very much linked to the raison d'etre, to the reason why the European Union exists, which is to create this common area, this common space, which is an economic space by the single market which is not a new thing, as you might know. We started working on its policies, I mean, it was embodied in the 1957 Treaty of Rome, did lead to be the single market it took a little bit longer than expected. But it's an economic space. It is also a social space, a political space, and if I may, speaking personally, this is something that especially in the current debates is sometimes forgotten, that the European Union was never, meant never, ever, if you read the preparatory documents and the treaties, it was never meant to be purely a free trade area. It was always meant to be a common economic area, plus the political and societal area which I assume is that and this relates to the Digital Single Market. What we're trying to do is to make sure that the adoption of digital technologies does not inadvertently result in fragmentation within the common market. I can give you one very simple example. One common example is this practice which we call geoblocking. And this practice through which a company, an e-commerce provider, based for example in France. There is that technology today through which that provider can block access to it's online shop from citizens who are trying to buy from Italy. Or even worse, it applies different prices for completely unjustified reasons to citizens of Italy and to Germany. If you are an Italian citizen and you physically go to France, and you go, and I'm not making an just an example of France, it's one of many examples, just to be clear. But I'm an Italian citizen, I go to France I go to baguette shop. I want to buy a baguette. There's no way that the seller can ask for my passport, and can say, well, you're Italian not French. Therefore I'm going to do double price for that baguette. That just cannot happen. And yet it happens quite frequently online. It's just one example of things that we're trying to address. Regulatory, sometimes it's because of active regulation by member states. Sometimes because of lack of regulation of the European level. It's trying to avoid the fragmentation that might result with the use of technology.

Glorioso: And then there's also a need which is a very important part of the DSM to create a common area of trust. And what I mean through that is that it's quite interesting to see that both in Europe and in the US, which are the two parts of the world that I know best, time and again through scientific surveys it's very clear that citizens, consumers, business people - they are not using digital technologies as much, including the internet, as much as they could, or sometimes they want to, because they don't trust very much those technologies. It's not clear what happens to your private data. Look at your country. The latest breaches of Equifax and others. It's staggering if you think about it that this kind of stuff can happen.  You don't have ... people feel they don't have real control over their online activities. And so this is what we're trying to do with the DSM. We have put on the table a number of legislative proposals in the area of privacy, of cyber security. Some of those are already the law. Some of those for for our listeners who maybe don't know that much about the governance that a greater system of the European Union. I worked for the European Commission which is kind of the executive of the European Union. We make a legislative proposal which is then democratically debated by our parliament and our EU council which represents the member states. So in some cases that debate is still going on. But this is kind of what we are trying to do with DSM. It's not, it's difficult. But conceptually it's not rocket science is what we've been trying to do with the single market since many decades.

Cruise: Seems like what are the issues, you mentioned cyber security but I think one of the other ones would be access. You're dealing with 28, soon to be 27, countries that have different levels of access to Wi-Fi for example. And since we picked on France let me let me pick on Italy. I've spent some time there and have had great difficulty getting online and some of that has to do with the beautiful historic buildings and just the difficulty. This is one of the proposals is to enhance access so that everyone can be part of the digital economy and the digital market. How can that be done, and who is paying for it, and all of those important questions?

Glorioso: No this is absolutely an important question because as everybody knows, you know, it's very nice to talk about digital technologies but if you cannot access the Internet at a reasonable speed, then it's kind of a moot discussion. Let me just very quickly mention that, indeed, the plans seem to be that on the 29th of March, 2019, we will be 27 member states. I don't want to enter too much into that debate now. We don't have the time. But I will however mention that I don't think that people realize how incredible it is that you can have actually a procedure through which a member states can quote unquote secede from the union in a peaceful and democratic way. That happens very rarely. And you know, your history shows it and I'm sure many other parts of the show it. So I just want to mention that, however, until that happens, the UK is a member state of the European Union, you know, subject to all the rights ... it has all the rights and is subject to all the obligations of being a member state of the European Union. Now more on the on the specific topic that we're talking about, the question of how do you make sure that as many citizens and businesses as possible have access to the Internet. You know, the state or the government, public authorities, have a role to play. Absolutely. And by the way, we do through our structural funds or regional funds, we have as the Union, we have supported many projects, especially in the least-developed regions of our member states. At the end of the day however the kind of money we're talking about in order to build the infrastructure that is needed to provide this access has to come from the private sector. And there was a business case for it because people want to have access. So what we're trying to do from a regulatory point of view is to modify our telecommunication framework to make it easier for large communications companies to invest. Basically the debate right now is a kind of give or take. We relax, that's still being negotiated but the ways have been discussed. But the idea is we relax a little bit the regulatory obligations that big telecommunication providers have, in exchange for a commitment on their side to invest over a five to 10 year timeframe in, for example, fiber networks or high speed Wi-Fi networks or 5G wireless technologies. And if you look at the numbers, actually, and there are still significant discrepancies across the member states which is what, for me, as a Commission official, is the most worrying thing. At the end of the day, I don't think we can set necessarily a fixed number: How much speed should we have for access to the Internet. What I'm a bit worried about these when I see certain regions in Europe which are lagging behind, because that creates fragmentation, discrepancies within this common area, economic social and political area. And that's what's concerns me. But if you look at the numbers, there are discrepancies but we are actually faring reasonably well. There have been very significant increases. Now my own home country, Italy, unfortunately is very much behind, which is sadly amazing if you think how much Italy has given [inaudible] for many many years. There are many reasons for that. But all I would say is that it has a lot more to do with Italian politics, with national politics, than what the Union can do or is allowed to do in terms of investments there.

Cruise: Just one of those inherent struggles within the union of course. So as we wrap up here. Give us some things to look forward to. What what can we expect in the next couple of years in terms of this single market?

Glorioso: I think that the the situation that we have today is that the Commission, the executive of the European Union, the European Commission, has put on the table every single legislative and non-legislative policy proposal that we committed to when we launched the Digital Single Market Strategy in May 2015. That's when we publicly announce it. It's not that our job now is done. Quite the contrary. But to a large extent now it's really the job of our parliament and our member states to come together, negotiate to make sure that this proposal is modified as appropriate to become law. There is going to be a lot of you know I should have said perhaps I'm a diplomat but there's going to be a lot of horse trading and sausage factory which is part of our democratic life and compromises, compromising a lot of things. There is that. One of the debates that I think people should pay attention to because it's a debate that has been going on for quite some time in Europe and will certainly continue and it's starting to become more vibrant in the US as well is about the role of large online platforms, especially when it comes to illegal or sometimes harmful content online. What are the responsibilities? What they should be doing? And this is a complicated debate. There is no clear cut that is the answer. But it is a debate that we need to have because when you have companies which have 1 billion plus users and have such a deep influence, much of which is very positive, but have a deep influence over our lives, we need at a certain point to come to some better clarity. If something bad is happening, not because they are doing it, but it's happening using their platform, using their systems, what should be their responsibility? What should be our responsibilities as public authorities? What should be the citizens responsibilities? So that's a debate that I don't expect it will be solved in the near future but I think it will become increasingly vocal and increasingly important both in Europe and in the U.S. in the coming months and maybe years.

Cruise: Some exciting things to look forward to and some interesting things to to continue to consider. So thank you so much for your time today.

Glorioso: Thank you.

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