Speech

Consumers and the digital single market

Speech by Baroness Neville-Rolfe about the importance of the digital single market for consumers.

Thank you. I would like to welcome the newly appointed Director General of DG JUST, Tiina Astola, and say how pleased I am that you were able to come to the UK so early in your tenure to share the Commission’s plans with us. I very much look forward to hearing from you, and of course to hearing about the results of today’s important workshops.

I want to talk about our approach to the digital single market, commercially one of the major issues of our era. By the word ‘our’ I mean to cover not only we here in the UK, but also all of us throughout the EU.

One of the most important achievements of the EU is the single market, even though it is not yet complete. The objective must be to ensure that the single market takes fully on board all the potential of the digital world.

It is a common observation that it is odd that on a good day you can get from the centre of London to the centre of Brussels in just 2 hours, but that when you arrive you can’t stream your favourite TV series, even though you’ve already paid for it at home.

Equally it is odd that you can browse a website from just across the border, for the latest fashions, only to find out that the delivery costs are prohibitive when you reach the checkout.

We need to deal with these problems.

Around £1 billion of UK retail sales now take place online every week, and this is growing by 10% a year. One third of UK retailers sell online. However, and this is at the heart of the problem, only 7% manage to do so beyond our borders. This is the problem we must fix.

Consumers

That is the problem from the perspective of producers and retailers. I now want to change perspective and look at matters from the point of view of consumers.

Now ordering goods and services from far away suppliers in other jurisdictions is potentially worrying in that what you order might not arrive and, if so, it might be very difficult to do anything about it.

That in a nutshell is another problem we need to fix. Consumers need to have justified confidence in the rules and that they will be applied properly.

The UK is trying to drive a conversation about how best to do this. Last month we issued a paper containing our ideas about improving cross-border delivery.

For example, we want to see postal operators and retailers give clear parcel information - price, cost, time of arrival - at an early point in the retail transaction. This is something of great importance to consumers and smaller e-retailers. There is nothing more frustrating than choosing a basket of goods only to discover that there is no delivery to your location!

As I have already mentioned consumers also need to feel that they have essential protections if things go wrong.

As commissioner Jourova said;

…for the digital single market to really take off in Europe, we must boost consumers’ trust in the online world, while promoting a business-friendly environment.

I couldn’t agree more.

So the proposals you will be discussing later this morning need to support consumer confidence. For example, by giving consumers a clear route to a refund if things go wrong. At the same time they must not so burdensome that they discourage cross border sales. That is the balancing act we must make.

We also need consistency across the Union. We need to avoid the need for businesses to comply with different consumer law requirements every time they want to sell in a different member state.

And of course we also need effective enforcement when things go wrong.

The digital world makes this more complicated which is why in the UK we were one of the first member states to introduce bespoke digital content rights through the Consumer Rights Act 2015, which I happened to take through Parliament.

Simplicity and consistency are key. Convoluted regulation simply won’t work and will give the EU a bad name.

We need to ensure that offline rights for products and services are aligned as far as possible with online ones, creating a single set of rules for consumers.

We need the Commission to maintain its ‘technology neutral’ proposal so that businesses do not have different rules depending on how they deliver their digital content – for example whether a movie is streamed or downloaded, or whether pay TV is accessed via satellite, cable or broadband.

And we need to avoid contradictions with parallel sets of regulation, such as the Electronic Communications Framework, which covers the means of delivery rather than the content, but has differing rules - for example concerning cancellation periods.

And the overwhelming objective should be a simple system where, across the single market, businesses understand their obligations and consumers know how to enforce their rights

As I said at the start, the digital world is changing everything and a key driver of that change has been the dynamism and growth of platforms.

That means everything from the big international platforms, like Google, Amazon and Alibaba, to up-and-coming European businesses, such as Dailymotion (video), Huddle (cloud), GoCardless and iZettle (e-commerce), ResearchGate (academic networking), LoveHomeSwap (house swapping), Hassle.com (domestic services) and BlaBlaCar (ridesharing services) (all part of the sharing economy), to developments by the Government Digital Service such as GOV.UK Verify (which will allow citizens to prove their identity online more easily) and GOV.UK Pay (which will provide one simple way to make payment to any government department) which will make it easier for citizens to interact with government.

In recent years they have brought us huge benefits. They have given us access to new goods, new worlds, new relationships, new services and shared services, all at unimaginable speeds.

Central to this is an open approach to platforms. Platforms should be seen as an opportunity not a threat.

As a consequence, consumers benefit from increased convenience, greater choice and quality of services, improved transparency and increased connectivity.

Businesses benefit from a reduction of geographic barriers, supporting new forms of business through innovative products, more efficient services, access to wider audiences, new funding models and reduced costs.

So an important priority should be to ensure that platforms continue to innovate and offer services consumers and businesses demand. The UK will oppose any form of regulation that would undermine these advantages.

There is already a legal framework of consumer and competition law in place that applies equally to platforms as well as other digital businesses. And we should apply that framework to platforms as to any other business.

We should use our existing legislative toolkit consistently and fairly rather than introduce new regulations specifically for platforms.

This doesn’t, of course, mean that platforms can do whatever they want. We have EU competition rules and an important case against Google is ongoing thanks to the energy of the new commissioner. Here in the UK the Competition and Markets Authority has pioneered the application of existing competition law to problems in the digital sphere.

I was pleased to see their new guidance for businesses on improving practice in online reviews. It helps business to understand their obligations in a light touch manner, whilst allowing consumers to benefit. These are technologies and platforms that the next generations, the digital natives, regard as essential to daily life. Ask my 4 sons and 3 small granddaughters, who won’t come to stay if the broadband is down!

Privacy

The final area I wanted to touch on is the need to ensure that consumers can be sure that personal data generated by their online activity will be used properly.

As I know from my own experience with an early exemplar, the Tesco Clubcard, businesses can use data to help them do business more effectively, while providing a better service to customers. I remember introducing an organic wine range because of the strong association between buyers of organic foods and wine sales!

At the same time, as we were extraordinarily aware, consumers need to trust the way that their personal data is being handled. That is why recent progress on the General Data Protection Regulation has been important. For the same reason, I welcome the recent agreement between the EU and the US on the so-called Privacy Shield – which will continue to allow the free flow of data with the appropriate safeguards.

The right framework for cross border e-commerce, and the data that supports it, is important if businesses are to continue to innovate and maintain Europe’s rich creative output. Consumers are and ought to be the main beneficiaries of such vibrancy.

Conclusion

It’s clear that the digital revolution which we are living through is only at its beginning. Tim Berners-Lee, an Englishman and inventor of the world wide web, said recently that the web, as he envisaged it, has not yet been seen. The future of the web is still much bigger than the extraordinary progress so far.

We have seen enormous change in the past decade. The way that we listen to music, watch films, order food and teach our children is changing at a rate of knots.

The challenge for us, the exciting challenge, is to keep pace so that consumers are protected and empowered without choking off the ability of businesses to provide new products.

By doing this, we will give consumers the confidence to buy beyond our borders, create choice through competition, and ensure that new and exciting technologies are allowed to flourish.

Thank you for listening.