Keeping Europe's Digital Single Market Strategy Single, Innovative

05/08/2015 04:45 pm ET | Updated May 08, 2016

The European Commission has released its much awaited strategy to create a single market throughout Europe for digital goods and services. In their announcement last Wednesday, European Commissioners stressed the goal to remove unnecessary national rules and grow Europe's economy.

For European consumers, it could mean fewer obstacles to buying products online, having them shipped and not facing price discrimination based on which European country they live in. For businesses, the free flow of data around Europe and lowering of e-commerce barriers could mean better access to information and to potential customers.

Even basic e-commerce provisions currently face obstacles from traditional product distributors in various countries who until now exercised control over the market supply chain. They don't want European shoppers to be able to log on, find, and pay lower prices with a few clicks. So European Commissioners should be commended for standing up to pressure and taking these steps toward a digital single market.

But some of the proposed provisions risk undermining other stated goals.
For example, there is a troubling effort to increase the liability of online companies for a wide range of behavior by their customers and users which in turn would coerce greater monitoring and censoring by companies. This threatens to mirror the SOPA/PIPA battle. Forcing companies to choose between reviewing or censoring all user posts before they go online for issues like copyright infringement threatens free speech online and would hamper the growth of the global Internet economy, especially in Europe.

Currently companies doing business in Europe operate under a so-called notice and takedown rule. If someone reports a credible problem, whether copyright infringement, or some type of inappropriate material, there are procedures whereby Internet services companies are authorized to quickly remove the material. This policy, similar to that of the US, seeks to balance freedom of speech with other goals to appropriately police the Internet for content violations.

The Digital Single Market plan also floats the idea of new "duty of care" procedures that would require some online companies to proactively monitor, judge, and remove user or third-party content on networks and hosting platforms -- or face legal consequences.

Yet another troubling measure would regulate large online platforms like eBay, Amazon and Facebook much like public utilities in the US are regulated. This impact of such a sweeping and unprecedented assertion of governmental intrusion into this dynamic online marketplace which has thrived in a lightly regulated environment is hard to calculate, but it would be antithetical to embracing and symbiotically benefiting from the technology opportunities available.

In spite of areas of strong disagreement, I commend policymakers for attempting to lay out a DSM strategy that would create a plan for Europe to not only boost its own domestic Internet sector, but improve productivity and growth for all European businesses that depend on the Internet.

But within this strategy lie two competing approaches to economic policy: one that is carefully deregulatory and understanding of the dynamics that foster innovation, and would lead to growth; and one that is essentially fearfully reactive, overly regulatory and will deter new and existing companies from growing to their potential.

If Europe is to ensure that the vision announced this week will work in practice, it will need to better align the details of the plan with its stated goals -- and resist the temptation by a few countries and special interests to hamper Internet growth. Studies have shown that 75 percent of the Internet's benefits acrue to traditional industries, but for that to happen, it is critical to implement policies that do indeed remove, not create, barriers to the free flow of data, products and information.