Opinion of the Economic and Social Committee on the 'Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions: Globalization and the Information Society - The need for strengthened international coordination'
Date: 1998-07-01
Institutions: European Economic and Social Committee
Subjects: Universalism, electronics, mass media, single market, telecommunications

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Official Journal of the European Communities

14.9.98

Opinion of the Economic and Social Committee on the ‘Communication from the Commission
to the Council, the European Parliament, the Economic and Social Committee and the
Committee of the Regions: Globalization and the Information Society — The need for
strengthened international coordination’

(98/C 284/03)

On 6 February 1998 the Commission decided to consult the Economic and Social Committee,
under Article 198 of the Treaty establishing the European Community, on the above-mentioned
communication.

The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing
the Committee’s work on the subject, adopted its opinion on 3 June 1998. The rapporteur
was Mr Burani.

At its 356th plenary session (meeting of 1 July 1998), the Economic and Social Committee
adopted the following opinion by 143 votes with 2 abstentions.

1.

Introduction

2. New policy challenges

Continuing its study of information society
1.1.
issues (1),
in the present document the Commission
examines aspects of communication which, now that
unlimited information has made it global, requires
globally-harmonized technical and legal frameworks.

Even at European level, the problems are far
1.2.
from simple: the difficulties multiply once globalization
comes into play. Aspects which are intrinsically complex,
given the subject’s highly technical nature, the range of
disciplines to be covered and the varying experiences
and requirements of those involved, are further compli-
cated by the large number of international bodies which
are — or believe they are — competent to deal with the
issue.

The purpose of the communication is to set

1.3.
out (2):

— the need to create an international framework
to facilitate the development of global electronic
commerce;

— a preliminary analysis of the technical, commercial
and legal obstacles hampering the developing of this
framework;

— a proposal for immediate action to coordinate

initiatives designed to remove key obstacles;

— a proposal for an International Charter to reach

agreement between the relevant parties.

(1) Cf. in particular the following communications on ‘A
European initiative on electronic commerce’ (COM(97)
157 final); ‘Illegal and harmful content on the Internet’
(COM(96) 487 final);
‘Ensuring security and trust in
electronic communication’ (COM(97) 503 final); and the
Green Paper on ‘The protection of minors and human
dignity in audiovisual and information services’ (COM(96)
483).

(2) Cf. point 4 of the communication, ‘The Next Steps’.

2.1.
The communication sums up the present situ-
ation: the European Union is making an international
contribution to the negotiation of agreements in a
number of fora: WTO, ITA (agreement on tariffs for
information technology products), etc.; several national
regulatory initiatives and actions are under way in
European countries and elsewhere in the world. Consis-
tency and coordination of initiatives is becoming essen-
tial. The Member States should carry out a critical
examination of their own policies for adjusting to new
requirements, without thereby ‘surrendering national or
regional traditions and cultures’.

2.2.
If the Union acts ‘quickly and boldly’, it will make
a contribution to the shaping of a new environment, and
should signal this to the international community. The
Commission, then, presents proposals on how to identify
the areas in which strengthened international cooper-
ation is necessary, and underlines that it is now time to
seek an international agreement on the procedures to be
followed in the future to create a genuinely world-wide,
border-free market.

2.3.
The Committee would point out that a multitude
of earlier communications, recent or otherwise, have
long highlighted the need for international cooperation
and urgent European-level coordination. Repeating this
message at this stage gives the impression, to an
uninformed reader, that little progress has been made
in this direction; in other words, precious time seems to
have been lost between the moment at which the need
became clear and the present. However, regardless of
the terms used, this impression is confirmed, even for
informed readers, by the subsequent comments. In the
meantime, several Member States have taken individual,
uncoordinated initiatives.

2.4.
The Community authorities and the parties
concerned are well aware of the legal problems, as well
as the problems of standardization, cryptography,

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electronic signatures, competition and taxation. With
the exception of the latter — taxation — the features of
these aspects are well-known, in part because the parties
concerned are constantly consulted. To speed matters
up, the Commission should make its own point of view
on a range of problems known at the earliest opportunity,
thereby establishing the starting point for practical
initiatives for urgent implementation.

3. The need for interoperable technical solutions

The communication emphasizes that in the past,
3.1.
cooperation between authorities, users and standards
bodies has worked well in a number of spheres such
as telecommunications, mobile phones, etc. In the
technological field, a turning point has been reached
today: rather than an official, institutional framework,
spontaneous self-regulation is growing as in the case of
Internet, which has given birth to its own community
with its own rules and bodies.

3.2.
The Commission makes no judgment of this
phenomenon: it simply notes that the Internet com-
munity is adopting open standards (protocols) that
satisfy the principles of interoperability and competition.
It adds, however, that measures to facilitate the con-
tinued growth of Internet will need to take the present
‘open’ approach into account. For its part, the Com-
mittee notes that vigilance will be required to ensure
that self-regulation is not accompanied by social dis-
crimination or exclusion to the detriment of certain
categories of user. To protect young people, it must be
ensured that unsuitable or offensive material can be
withdrawn through self-regulation.

3.3.
The ESC feels that these comments give grounds
for thought: Internet began with pre-established initial
standards, and has subsequently developed without
specific rules. Such rules are beyond the capacity of the
authorities to lay down in time, given their cumbersome
decision-making procedures. Fortunately for all, self-
regulation has reflected the fundamental, general rules
underpinning international coexistence: interoperabi-
lity, non-discrimination, observance of the rules of
competition.

3.4.
A conclusion, or rather a lesson, can be drawn
from the above: technical progress cannot be bound
by detailed rules, which are necessarily based on the
past: a small number of fixed points supported by
general principles, together with effective control of
diverging practices, is enough. International agreements
to this end should not be too difficult to reach in
terms of content and timing: they do, however, become
difficult when the temptation to apply detailed

regulations to a constantly and rapidly changing field
is not resisted.

4. Measures to ensure market access and competition

4.1.
The Commission mentions a major obstacle to
market access: high telecommunications costs, although
in point 2.1 of the communication it acknowledges that
there have already been ‘significant price reductions’ as
a result of falling costs and increased competition.

The question is not unimportant: is the cost of
4.2.
telecommunications ‘too’ high, and therefore liable to
hinder progress and penalize Europe from the angle of
competing with the United States, or ‘reasonably’ high,
and not such as to deter the less advantaged from
entering or to have serious repercussions on European
competitiveness?

The communication raises the problem discussed
4.3.
in the previous point in the second part of the section,
where it deals indirectly with competition: transatlantic
telecommunications are said now to cost 1,5 % of their
price 60 years ago, and should fall by a further two-thirds
by 2010, thereby allowing SMEs and consumers to enter
a market no longer limited to large companies.

The ESC has warned against facile enthusiasm
4.4.
in earlier opinions: firstly, SMEs could benefit from the
information society, but might also lose ground to
more skilled and experienced competitors; secondly,
consumers must be aware of the risks they run in an
integrated world market where they no longer enjoy
uniform protection.

Unarguably, however,

the advantages of a
4.5.
reduction in telecommunications prices will vastly out-
weigh any disadvantages or dangers. In any case, as far
as the current situation is concerned, the ESC believes
that it must draw the authorities’ attention to a glaringly
obvious fact: telecommunications prices vary by some-
times significant amounts from one country to another,
and even between different operators in a single country.
This situation, resulting from competition with is good
for consumers, should be welcomed; nevertheless, the
Committee notes that charges for the different means
(fixed-location and mobile telephony, Internet connec-
tion, etc.) are often structured on a highly detailed
and complex case-by-case basis, making comparison
difficult. It thus becomes difficult for consumers and
SMEs to make informed choices.

The Committee is well aware that it is not the
4.6.
authorities’ function to regulate prices, which must be

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open to free competition; one of their tasks is however
to ensure compliance with the principles of transparency
(which, among other things, entails the possibility of
comparing costs and services provided) and standards
for competition and dominant positions.

nature multidisciplinary, but with close links between
the various aspects.

5. Creating a consistent legal framework: the basic

elements

5.1.
legal
The need to establish an international
framework has already been discussed in a number of
other Commission communications, the most recent
of which, ‘Ensuring security and trust in electronic
communication’ (1), stressed the urgent need to find
solutions in the areas of certification and authentication
of signatures.

5.5.
In the ESC’s view, therefore, there must be the
political will to construct a coordinated European legal
framework, based on universal general principles which
reflect the steps already taken by individual Member
States, without being dependent upon them, and this
must be done relatively quickly. There is, in principle,
no reason why different aspects should not be discussed
separately and simultaneously by a range of bodies and
experts, subject to central coordination. The ESC realizes
that a solution of this kind is easy to describe but harder
to achieve: one stumbling block is the variety of interests
at stake; another, even greater (cf. point 6.1 below), is
the widely differing international bodies and customary
negotiating procedures which have become established
with time, but which must be revised and streamlined.

5.2.
The legal framework for electronic communi-
cation as a whole is very broad, covering a variety of
aspects of which the Commission sets out to draw up a
non-exhaustive list: application of VAT, jurisdictional
conflicts, labour law, copyright, data and trade mark
protection, consumers’ rights, validity of contracts,
safeguards against fraud and organized crime, etc. No
less important, although unmentioned, is the question
of the content of communications, particularly where the
protection of minors is concerned (2). The Commission
considers that, in general, the legal framework must not
replace self-regulation, but should establish the limits
within which the parties’ free will may be expressed.

5.6.
The desirability of Europe-wide regulation arises
from the fact that 90 % of trade takes place within the
Community. Bearing in mind that the information
society is, by its nature, a global one, the European legal
framework must be prepared on a realistic basis: the
more detailed it is, the less it is likely to be recognized
outside the Community. In other words, these rules
should be restricted to establishing universally accept-
able fundamental principles. This does not, of course,
preclude more detailed rules being drawn up applying
only to the relations between European suppliers, users
and managers.

5.3.
The Committee cannot but agree with the need
to tackle these problems and resolve them as soon as
possible. However, it would express its surprise at the
claim that a list of priority obstacles to the development
of the information society needs to be drawn up: firstly,
because legislators and operators are by now well aware
of these obstacles — views on the solutions may differ,
but there is unanimous agreement on their nature; and
secondly, because of the method involved — prioritizing
urgency (and probably importance) would mean split-
ting a global problem into a multitude of separate
solutions.

5.4.
From both the theoretical and practical points
of view the ‘priority’-based approach might at first
appear justifiable: after all, the problems are of different
types and concern different areas. However, this over-
looks the fundamental point that a legal ‘framework’,
on account of its very nature, cannot consist of separate
elements added at different times. The subject is by

(1) OJ C 157, 25.5.1998.
(2) OJ C 287, 22.9.1997 and OJ C 214, 10.7.1998.

6. Strengthening international coordination

6.1.
The Commission highlights the need for coordi-
nation, but the description it gives of current and
planned initiatives is not reassuring. To quote only one
aspect of the information society, electronic commerce,
the document lists no less than twelve agreements and
conferences between 1995 and early 1998 at the initiative
of a host of bodies, governmental or otherwise. If it is
true that ‘much work has already been achieved within
the WTO, notably the GATT, GATS and TRIPS
Agreement’, then the completion of a universal legal
framework cannot be far off.

6.2.
The real picture is very different: the freedom to
supply and access information services has not yet been
consolidated: the rules of competition, discussed by a
WTO working group, should ‘eventually’ be strength-
ened: but the amount of time it takes, and the number
of reservations which must be overcome, for a WTO

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agreement to be transposed into law are notorious. The
Commission itself acknowledges that ‘although good
progress has been achieved, the understandings and
agreements arrived at within these fora consist either of
principles, which are not necessarily compatible, or do
not cover all elements of a comprehensive framework
... there is a growing number of urgent issues awaiting
solutions’. It might be added, in reply to this statement,
that if the number of ‘urgent’ issues is growing with
time, the available machinery for dealing with them has
proved itself inadequate to the task.

6.3. On the basis of the Commission’s own state-
ments, the ESC notes that if this is the outcome of years
involving
of discussion in dozens of different fora,
hundreds of government and other experts, of such a
well mapped-out issue whose problems were brought to
light years ago, then serious questions must be asked as
to the efficiency of international consultation and
decision-making machinery. The market, and in particu-
lar SMEs and consumers, views this situation with
concern and frustration.

6.4.
Taken individually, each body justifies its exis-
tence by displaying the results of its work: the defence
of particular interests, coordination of different interests,
or provision of a discussion forum for different parties.
Taken together, however, the excessive number of
bodies slows down and complicates the decision-making
process. In more general terms, the collective cost of
each individual decision needs to be considered.

6.5.
The ESC is fully aware that it is fruitless to
propose a reduction in the number of international
bodies which exist according to well-established pro-
cedures which cannot be undone. The aim is simply to
draw the attention of national, European and inter-
national authorities to the need to review procedures
with a view to greater efficiency, speedy decision-making
and lower costs for taxpayers. The authorities must, of
course, also direct their attention to their own internal
procedures.

6.6.
The comments made in points 6.4 and 6.5 above
are of a general nature and do not relate specifically to
the subject under discussion in the present opinion. On
this matter, it is noted that during the course of 1998
the Commission plans to organize a round table of
experts, providing them with the opportunity to voice the
views of all the parties concerned, together — possibly —
with an international ministerial conference to define
the priorities mentioned in point 5.3 above. The ESC
hopes that the methodological suggestions made in
points 5.4 and 5.5 above will be taken into consideration,
and that the general comments of the present opinion
will be reflected in the progress of work.

7. Towards a new method of coordination: an ‘Inter-

national Charter’

7.1.
The comments made by the ESC in point 6.5
above — which might be seen as provocative — are
implicitly shared by the Commission (1) which, in view
of the ‘growing constellation of actors and bodies
involved’, wonders how they could ‘work together in
future’. It is then proposed to reach an agreement
between the parties on ‘how best to develop common
approaches’ and on the development of procedures for
the coordination of public and private interests. Such
an agreement, or ‘charter’, would be non-binding,
would recognize the value of present work, and would
contribute to greater regulatory ‘transparency’.

7.2. Here again, the Committee is puzzled. In itself,
the proposal certainly makes sense, but the complexity
of the procedures for achieving a ‘charter’ once again
raises the problems discussed above: excessive plurality
of the parties involved, conflicts of competence, lengthy
deadlines. After all this, the final result would be a
[non-binding] ‘understanding on how a process of
strengthened international coordination should be
organized’. Coordination is already needed simply to
reach agreement on the ‘charter’: how much time and
effort will be required to get that far, which is only
preliminary to all the rest? The Committee expresses
uncertainty not about the proposal itself, but its chances
of success in the short term.

8. The next steps

The last part of the communication sets out the

8.1.
Commission’s programme for the immediate future:

— to seek an understanding with the Member States

on the procedure to be followed;

— to pursue discussion with international partners;

— to organize a round table of experts to obtain a more

comprehensive view of the issues;

— to seek an ‘active contribution’ by Europe to an
agreement between the private and public sectors;

— to invite all interested parties to send their comments

by 31 March 1998.

The ESC appreciates these initiatives, and urges
8.2.
the Commission to continue its efforts to get to grips

(1) Cf. point 3.3 of the communication.

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with this complex subject reasonably soon. Such efforts
are made all the more arduous by lengthy and costly
procedures, which can only be modified if there is an
understanding of the basic problem: technologies and

their applications change much faster than regulations.
Procedural streamlining must be included in the review
which international and EU bodies should take on as
their primary duty to the community as a whole.

Brussels, 1 July 1998.

The President

of the Economic and Social Committee

Tom JENKINS

Opinion of the Economic and Social Committee on the ‘Proposal for a Council Regulation
(EC) laying down detailed rules for the application of Article 93 of the EC Treaty’ (1)

(98/C 284/04)

On 11 March 1998, the Council decided to consult the Economic and Social Committee, under
Article 198 of the Treaty establishing the European Community, on the above-mentioned
proposal.

The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing
the Committee’s work on the subject, adopted its opinion on 3 June 1998. The rapporteur
was Mr Sepi.

At its 356th plenary session (meeting of 1 July 1998), the Economic and Social Committee
adopted the following opinion by 135 votes to one, with three abstentions.

1.

Introduction

1.1.
The Committee has several times acknowledged
the need to regulate competition in a thorough and
legally valid manner.

In its opinion (2) on the 22nd report on compe-
1.2.
tition policy, the Committee had already emphasized
how important and necessary it was for the Commission
to lay down regulations that would improve trans-
parency and give greater legal certainty to all interested
parties.

1.3.
The Committee wishes to highlight the greater
awareness that is developing in all EU countries on the
subject of competition, both among economic and legal
practitioners and, more generally, on the part of public
opinion. This is due to the good results obtained in price
restraint and in increased competitiveness.

It is precisely in this sphere that legislation is
1.4.
needed to make the Commission’s work more methodi-
cal and transparent.

1.5.
The proposal also follows the regulation on the
application of Articles 92 and 93 of the Treaty to certain
categories of horizontal state aid (3).

1.6.
The Committee urges the Commission to con-
tinue to extend its regulatory work, in order to build up
a corpus of measures which harmonize and clarify the
entire competition issue, also in view of enlargement.

1.7.
these
In some key sectors of EU industry,
measures will have to take account of the situation
regarding aid granted in competing countries.

1.8.
The proposal attempts to strike a balance
between efficiency and transparency. The Committee
believes that, broadly speaking, Community institutions
should pay greater attention to transparency and third
party rights.

2. The Commission’s document

2.1.
The proposed regulation is basically a procedural
proposal which on the one hand codifies a tried and

(1) OJ C 116, 16.4.1998, p. 13.
(2) OJ C 34, 2.2.1994.

(3) OJ C 129, 27.4.1998.