One of the many questions left unanswered in the face of Brexit is the future of the UK within the Digital Single Market (DSM), the EU’s strategy for creating a continent-wide playing field for growth and innovation.
The Digital Single Market is not to be confused with the single market, the fundamental concept behind the European Union itself, which guarantees the free movement of goods, capital, services, and people within the EU. The single market is a social concept made real through many working parts, while the Digital Single Market is a specific strategic plan.
The DSM has several policy areas across three pillars:
The DSM strategy was first announced in May 2015 (pdf). The European Commission ambitiously hopes to announce one plan for each policy area by the end of this year, although few see this as being realistically possible.
Mark Webber, writing in the always-excellent Fieldfisher blog, described the DSM like this:
The DSM is not law, it’s an aspiration around which future EU laws may be crafted to realize its goals. With many of the proposals either at consultation or legislative drafting stage these rules are years away becoming operative EU law and binding on Member States in any event.
You will already be aware of many aspects of the DSM strategy. Net neutrality, the end of mobile roaming charges, online contract reform, an end to geoblocking, copyright reform, VATMOSS, and cookie law reform are just some of the ingredients in this admittedly mixed bag. The EU considers them the necessary growing pains on the way to a borderless digital continent.
In short, the DSM is about “better on-line access to goods and services, helping to make the EU’s digital world a seamless and level marketplace to buy and sell”.
That strategy has now run headfirst into a member state which voted, against the general direction of travel, to restore itself to a sulking island off the European coast.
What has been the UK’s position on the Digital Single Market?
Up until the Brexit vote the UK government was enthusiastically in favour of the DSM.
This page, for example, set out the Cameron government’s position on the strategy. On that page, David Cameron said “as the digital economy expands there are more and more opportunities for companies across Europe to grow, create jobs and help consumers to secure a better deal. All too often however these opportunities are being stifled by burdensome regulations and differing national regimes. It is time to put this right by completing the digital single market once and for all and unlocking the growth that this market could generate.”
Three months on, that page’s poetry of “data is beautiful” seems like distant nostalgia. What we have now is the cold light of day like this from a House of Commons committee:
The decision to leave the European Union risks undermining the United Kingdom’s dominance in this policy area. We could have led on the Digital Single Market, but instead we will be having to follow. The Government must address this situation, to stop investor confidence further draining away, with firms relocating into other countries in Europe to take advantage of the Digital Single Market
And that, perhaps, is the biggest irony of the Brexit vote. “Taking back control”, as far as the DSM is concerned, will mean trading in a marketplace which sets its own rules without our cantankerous voice.
Mark Webber of Fieldfisher said “whilst there is no indication Brexit will stop the DSM progress, what may well be lost is the harmonization…for UK domestic online players it may be harder to sell in Europe…for the multinational trying to address and sell across European geographies it may need navigate a little more fragmentation in the future if the UK’s market doesn’t adopt DSM-like rules.”
In other words, as with GDPR, it would be a heck of a lot easier to simply adopt the incoming EU laws than it will be to craft something on our own. But “Brexit means Brexit”, apparently.
The timing of the Brexit vote means that the UK is now in the strange position of being half-in and half-out of a half-completed strategy. Some of the directives and regulations that make up the DSM are in law; some are in revision; some are in the pipeline; some are in the consultative phase; and some are still bumping around committees. Pulling out now will mean a patchwork of different laws – either domestic, EU, or none at all – applying to different points of a single online journey or transaction.
To understand where the DSM might fit into a post-Brexit future, we also have to consider the UK government’s own digital strategy, once heralded as setting “the agenda for the rest of the Parliament on digital, so that the UK continues to lead the way”.
Want to take a look at the document formally known as the Government’s Digital Strategy?
Cast your memory back to last year’s Christmas break. On the 29th of December the Minister of State for Culture and the Digital Economy, Ed Vaizey MP, announced a three-week consultation on the shape and scope of the Government’s Digital Strategy.
(Think about that for a minute.)
In March of this year he announced that the strategy would not be published until after June, following the Brexit referendum. At the time, he told ComputerWeekly.com “the digital strategy has been drafted and is ready to go, but we’re looking for a slot from Downing Street…We are obviously affected by purdah, local elections and the EU referendum. I imagine it’ll probably be published after the referendum when the decks have been cleared and we can move forward.”
In hindsight, those were not the words of someone who expected the vote to go the way it did.
Nor were they the words of someone expecting to be sacked in the ensuing change of government and cabinet reshuffle.
June is long gone and the Government Digital Strategy is nowhere to be found. So what has become of it? For starters, the House of Commons dropped the mic on its sorry head.
In its report on the state of the UK’s digital economy published the day before Theresa May took office, the Business, Innovation, and Skills Committee of the House of Commons said:
We look forward to the publication of the Government’s Digital Strategy, in the summer of 2016 (six months later than expected), which should explain how the Government will build on its success. We regret this delay, and call on the Government to explain the reasons for it, and why they initiated a three-week consultation over the Christmas break on what the Government should include in the strategy.
The Committee also said
The Government must also explain how the Digital Strategy will be affected by the referendum result. It should also set out in its reply and in the Digital Strategy a list of specific, current EU negotiations relating to the digital economy. At the forefront of the issues explained, the Digital Strategy must address head on the status of digitally-skilled workers from the European Union who currently work in the UK. The digital sector relies on skilled workforce from the European Union, and those individuals’ rights to remain in the country must be addressed, and at the earliest opportunity.
This would imply that the Government Digital Strategy needs to be retrieved from down the back of the sofa and heavily revised, if not rewritten entirely.
As a consequence of the Brexit vote, the two digital strategies are now in a chicken-and-egg relationship where the the DSM is dependent on the GDS, but the GDS is dependent on the DSM.
(Edit 06/09: it goes without saying that in advance of the referendum, the UK government made no attempt to estimate the costs to UK businesses of not being able to access the Digital Single Market.)
Should the DSM be part of Brexit negotiations?
“Making a success of Brexit”, as Theresa May would say, will require all branches of UK government to work closely with the newly formed Department for Exiting the EU.
This brings us to our final complication for the future of the DSM. That complication lives in the organisational flowchart of the Department for Exiting the EU. Can you spot it?
Let’s remember the three pillars and many policy areas of the DSM strategy:
- Access: e-commerce, parcel delivery, geoblocking, copyright, VAT
- Environment: telecoms and media, online platforms, illegal content, security and personal data
- Economy and society: data economy, standards, skills and e-government
Once the House of Commons’ requests on digital professionals’ freedom of movement are taken into consideration, the work on Brexit and the DSM will need to take place across four different sections of the Department and six different Deputy Directorships.
Today in Parliament the Secretary of State for Exiting the EU, David Davis MP, told MPs “There will be no attempt to stay in the EU by the backdoor, [and] no attempt to delay, frustrate, or thwart the will of the British people.” He also said “it was interest of both the UK and the EU that we have the freest possible trading relationship.”
He’s about to get the very best of both worlds. Welcome to several years of scripted negotiations about the “freest possible trading relationship” through strained talks with a glacially slow institution, which will be carried out by a complex, bloated, and entirely homegrown bureaucracy.
Don’t laugh. It’s you, me, and our work which will be stuck in the middle. As always.
Further reading on the UK and the DSM
- Brexit and the DSM: three ways forward (eConsultancy)
- A DSM without the UK? (Openforum Europe)
- Brexit and beyond – the issues that worry a UK tech sector still in shock (Techworld)
- How will Brexit affect the UK’s tech industry (Techradar)
- Andrus Ansip rubbishes suggestions that Brexit will kill off EU’s DSM plans (Parliament Magazine)
- A Brexit could end Europe’s dreams of a DSM (San Francisco Chronicle)
- Brexit and the DSM: what does this mean for your business? (Osborne Clarke)