COMMISSION STAFF WORKING DOCUMENT Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS on the Mid-Term Review on the implementation of the Digital Single Market Strategy A Connected Digital Single Market for All
Date: 2017-05-10
Institutions: European Commission, Secretariat-General
Subjects: Internet, computer piracy, data protection, digital literacy, digital technology, innovation, knowledge economy, personal data, single market, transmission network

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 10.5.2017  SWD(2017) 155 final   COMMISSION STAFF WORKING DOCUMENT Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS on the Mid-Term Review on the implementation of the Digital Single Market Strategy  A Connected Digital Single Market for All {COM(2017) 228 final}  
 
 
Contents 

1. 

1.1. 

1.2. 

2. 

Introduction ................................................................................................................................. 4 

Policy Context ............................................................................................................................. 4 

Reactions to the DSM Strategy ................................................................................................... 5 

A call for timely delivery and effective implementation ............................................................. 6 

2.1. 

Agreements already reached ........................................................................................................ 6 

2.1.1.  Wholesale Roaming and Fair Use Policy Implementing Act ................................................. 6 

2.1.2.  Spectrum – UHF band (including 700MHz band).................................................................. 7 

2.1.3.  Cross-border portability of digital content ............................................................................. 8 

2.2. 

Proposals adopted by the Commission, awaiting co-legislature ................................................. 8 

2.2.1.  Geo-blocking .............................................................................................................................. 8 

2.2.2.  Digital Contracts (online content & distance sales of goods) ................................................. 9 

2.2.3.  Value Added Tax (VAT) for eCommerce .............................................................................. 10 

2.2.4.  Copyright ................................................................................................................................. 10 

2.2.5.  Parcel delivery ......................................................................................................................... 12 

2.2.6.  Consumer rights enforcement / Unfair Commercial Practices Directive ........................... 13 

2.2.7.  Audio-visual Media Services................................................................................................... 14 

2.2.8.  European Electronic Communications Code, BEREC & WiFi4EU ................................... 15 

2.2.9.  ePrivacy .................................................................................................................................... 17 

2.2.10.  Enforcement of intellectual property rights .......................................................................... 18 

2.2.11.  E-commerce sector inquiry ..................................................................................................... 20 

3. 

3.1. 

3.2. 

3.3. 

4. 

4.1. 

4.2. 

4.3. 

4.4. 

Ensuring a fair, open and secure digital environment ............................................................... 21 

Promoting Online Platforms as responsible players of a fair internet ecosystem ..................... 21 

Developing the European Data Economy ................................................................................. 31 

Fostering a trustworthy cyber ecosystem: Tackling cybersecurity challenges together ............ 36 

Managing the digital transformation of our society and economy ............................................ 40 

Digital skills and opportunities for all ....................................................................................... 41 

Startups and digitisation of industry and service sectors ........................................................... 44 

Digital innovation for modernising the public services ............................................................. 57 

Stepping up investments in digital technologies and infrastructures ......................................... 67 

4.4.1.  Towards a Gigabit society ....................................................................................................... 68 

4.4.2.  Developing  a  European  Open  Science  Cloud,  High  Performance  Computing  and 
European Data Infrastructure ............................................................................................... 70 

4.4.3.  Building artificial intelligence capacities ............................................................................... 72 

4.4.4.  5G .............................................................................................................................................. 75 

5. 

The Digital Single Market: Europe’s main asset in the global digital economy and society .... 77 

2 

 
 
Annex: Indicative table of EU funding and financing to digital infrastructure and services, as well as 
skills, 2014-2020 ....................................................................................................................... 82 

3 

 
 
 
1. 

1.1. 

INTRODUCTION 

Policy Context 

The  EU  economy  and  European  society  are  in  the  process  of  radical  economic  and  social 
transformation.  Digital  technologies  and  the  amount  of  data  they  create  trigger  new 
innovations, products, services, business models, as well as new ways of interaction between 
people  and  machines.  These  technologies  change  the  way  citizens  and  business  live,  work, 
communicate, travel and consume.  

These  technologies  are  already  delivering  concrete  benefits:  personalised  medicine;  wider 
access  to  education  and  culture,  by  using  online  services;  better  digital  public  services;  and 
allowing consumers to manage how they consume, and even produce energy, with the help of 
smart grids and smart meters. These are just a few demonstrations of the growing number of 
tangible benefits these technologies can provide. Beyond these, digital technologies can help 
to  re-industrialise  Europe  and  assist  existing  industries  to  modernise  their  operations  and 
profit  from  the  scale  of  the  internal  market.  Indeed,  new  business  models  using  new 
technologies  such  as  three  dimensional  (3D)  printing,  Artificial  Intelligence,  cloud  and  the 
Internet of Things could facilitate the return of manufacturing to Europe that was previously 
outsourced. They also allow a more resource efficient production and delivery of goods and 
services that are tailored to individual needs and expectations (e.g. personalised  health-care, 
tailored personal education). 

The  digital  revolution,  if  well  managed,  offers  the  opportunity  to  strengthen  Europe’s 
economy and society which have suffered from a decade of low growth, a weakening of the 
social  fabric  and  unsustainable  development.  It  is  also  an  opportunity  for  the  EU  to 
demonstrate global leadership in innovation and technologies. 

Maximising  the  positive  impacts  of  this  digital  revolution  on  people's  lives  and  European 
business activity is the principal aim of the Digital Single Market (DSM) strategy adopted on 
May 2015. As part of its 10 priorities, the Juncker Commission has thus decided to provide a 
strong  focus  on  digital  through  the  Digital  Single  Market  strategy,  combined  with  fresh 
investment in new technologies and fostering of capital availability thanks to the building of a 
Capital Markets Union. 

In the 18 months following the adoption of the Strategy, the European Commission consulted 
widely  and  delivered  the  necessary  proposals  under  the  16  actions  of  the  Strategy.  The 
proposals  will  bring  down  barriers,  reduce  costs  of  doing  business  across  borders,  improve 
access  to  goods  and  services  for  all  citizens,  and  create  the  necessary  conditions  for 
investment and growth in digital infrastructure and services and all those sectors that rely on 
them.  The  final  shape  of  many  of  the  legislative  proposals  now  rests  in  the  hands  of  the 
Council and the European Parliament. Other actions are being implemented through various 
non-legislative measures. Those range from financing key digital technologies and stimulating 
digitisation to modernising public services through the digital transformation of government. 

This Staff Working Document takes stock of the considerable distance that the Commission 
has  covered  since  May  2015.  It  also  highlights  new  issues  that  have  emerged  more  clearly 
since then: the need to better capture the impact of the digital transformation on societies, the 
growing  role  of  data,  the  European  cloud,  digital  skills,  artificial  intelligence  and  internet 
platforms,  the  potential  that  digital  has  for  health  and  health  care  and  the  mapping  out  of 
cybersecurity risks. 

4 

 
 
This  Staff  Working  Document  provides  an  overview  of  the  implementation  of  the  DSM 
strategy  and  shows  how  the  Commission  manages  the  digital  transformation  and  keeps  up 
with digital developments. 

Chapter  2  highlights  the  rationale  of  the  DSM  legislative  proposals  (including  better 
enforcement actions) and overviews the progress made since the adoption of the Strategy. 

Chapter  3  provides  an  overview  of  emerging  trends  in  digital  ecosystems  that  may  require 
additional actions. This covers online platforms, the data economy and cybersecurity. 

Chapter  4  focusses  on  digital  policies  aimed  at  successfully  managing  the  digital 
transformation of our economy and society. It summarises the Commission's activities in this 
field: to boost Europeans' digital skills, foster the digitalisation of industry and service sectors, 
modernise the public sector and step up investments in connectivity and digital technologies. 

Chapter 5 looks at the EU's position on the global digital stage.  

1.2. 

Reactions to the DSM Strategy 

The European Council and The European Parliament supported and welcomed the strategy. 
The European Council stated that the strategy should be used to promote inclusive growth in 
all  EU  regions1.  The  European  Parliament  considered  that  achieving  a  digital  single  market 
through a horizontal approach, strengthened in its implementation, creates jobs and growth, a 
more inclusive society, and new opportunities for citizens and businesses.2 

The  European  Parliament  has  since  commented  on  several  aspects  of  the  strategy  and  has 
called  on  Member  States  to  fully  cooperate  in  implementing  the  DSM  to  stimulate  growth, 
create  quality  jobs,  promote  necessary  innovation  in  the  EU  market,  keep  the  European 
economy globally competitive and bring benefits to both businesses and consumers.3  

The European Council has since committed itself to the adoption and implementation of DSM 
files  by  June  20184.  In  the  Bratislava  declaration5,  it  repeated  the  importance  of  delivering 
concrete benefits for citizens. 

The  European  Economic  and  Social  Committee  supported  the  Commission 
its 
determination  to  put  an  end  to  the  fragmentation  of  European  digital  policy  and  pointed  to 
closing  the  skills  gap  as  a  priority.6  The  European  Committee  of  the  Regions  has  been 
favourable  towards  the  strategy  in  its  opinions,  emphasising  the  importance  of  deploying 
digital infrastructure across Europe.7 

in 

National  Parliaments  also  engaged,putting  forward  opinions8  on  both  the  strategy  and  its 
specific action points.  

1  http://www.consilium.europa.eu/en/policies/digital-single-market-strategy/  
2   REPORT on Towards a Digital Single Market Act (2015/2147(INI)) 
3  Report  on  the  Annual  Report  on  the  Single  Market  Governance  within  the  European  Semester  2017 

(2016/2248(INI)) Committee on the Internal Market and Consumer Protection 

4  http://www.consilium.europa.eu/en/press/press-releases/2016/06/28-euco-conclusions/  
5   http://www.consilium.europa.eu/en/press/press-releases/2016/09/16-bratislava-declaration-and-roadmap/  
6   OPINION of the European Economic and Social Committee on the Communication from the Commission to 
the European Parliament, the Council, the European Economic and Social Committee and the Committee of 
the Regions – A Digital Single Market Strategy for Europe COM(2015) 192  

7  SEDEC-VI/005 114th plenary session, 12-14 October 2015 OPINION Digital Single Market  
8   The  Commission  received  opinions  from  the  National  Parliaments  in  Austria,  Czech  Republic,  Germany, 
UK, Italy, Portugal and Romania on the DSM Strategy, and from Germany and Romania on online platforms. 

5 

 
 
                                                            
Member  States  have  supported  and  pushed  the  strategy  forward  through  different 
contributions,  the  adoption  of  new  or  amended  national  strategies,  and  processes  like  the 
digital republic law in France9, and the Foundation Autonomous-project in Denmark10.  

Today, National Digital Agendas are in place in all Member States and reflect the strategies 
put forward by the European Commission. This has led to a higher priority and awareness of 
digital  policies  throughout  Europe.  Some  Member  States  seem  to  go  beyond  having  one 
National  Digital  Strategy  by  formulating  and  implementing  more  specific  strategies  on  the 
various  core  issues  of  the  Digital  Single  Market  such  as  eGovernment11,  Industry  4.012  and 
eSkills13. The strategy has provided Member States with a common framework and has united 
Europe  in  its  development  of  digital  policies  necessary  both  in  the  internal  market  and  the 
global economy. 

2. 

A CALL FOR TIMELY DELIVERY AND EFFECTIVE IMPLEMENTATION 

This section presents the progress on policy files categorised by agreements already reached 
between co-legislators, legislative proposals under negotiation, enforcement activities related 
to  the  DSM  and  reactions  after  the  adoption  of  the  DSM  Strategy  by  Member  States  and 
various European Institutions.  

2.1. 

Agreements already reached 

2.1.1.  Wholesale Roaming and Fair Use Policy Implementing Act 

Challenges addressed through the actions announced in the DSM Communication  

The  Commission  has  been  working  for  a  decade  to  reduce  and  ultimately  remove  the 
surcharges  citizens  face each  time  they  cross  a  border  while using  their mobile  device.  The 
Digital  Single  Market  will  not  happen  if  people  are  hesitant  to  go  online,  text  or  call  every 
time they cross a border. 34 % of Europeans travel abroad within the EU every year.14  

Since 2007, roaming prices have decreased by more than 90 %. Prices last fell in April 2016, 
to 5 cents per minute of voice call received, 2 cents per SMS sent, and 5 cents per MB of data 
on  top  of  national  rates.15  In  2015,  based  on  a  proposal  by  the  European  Commission,  the 
European  Parliament  and  the  Council  agreed  to  end  roaming  charges  for  people  travelling 
periodically in the EU. 

To this end, it was also necessary to reduce the maximum prices operators  can charge  each 
other,  when  their  customers  use  other  networks  when  roaming  in  the  EU.  That  is  why  the 
European Parliament and the Council mandated the Commission to review the markets where 
operators  purchase  roaming  services  for  their  customers  ('wholesale  roaming  markets')  and 
make appropriate proposals by 15 June 2016, to enable the abolition of retail roaming charges 
from 15 June 2017.16 

What has been delivered? 

9   http://www.republique-numerique.fr/pages/in-english  
10   https://autonomous.dk/en/  
11   E.g. Bulgaria, Cyprus, Denmark, Greece, Italy, Slovakia and Spain (EDPR 2017). 
12   E.g. Czech Republic, France, Italy and Slovakia (EDPR 2017). 
13   E.g. Hungary Ireland, Luxembourg, the Netherlands and Portugal (EDPR 2017).  
14  Special Eurobarometer 414 (2014) 
15  https://ec.europa.eu/digital-single-market/en/roaming-tariffs  
16  Regulation (EU) No 2015/2120 

6 

 
 
                                                            
Following an in-depth review of the wholesale roaming markets, the Commission adopted its 
proposal on 15 June 2016.17  

The European Parliament and the Council adopted the new rules in April 2017. All measures 
will be in place to abolish retail roaming charges from 15 June 2017. 

On 15 December 2016, the Commission adopted an implementing act with detailed rules on 
‘fair use’ measures that operators can take to prevent abuse of the roaming services, and on a 
derogation that operators can  apply for when the provision of regulated roaming  services at 
domestic  prices  threatens  the  sustainability  of  their  domestic  charging  model.  National 
regulators,  authorising  such  derogations,  can  only  grant  them  exceptionally,  on  the  basis  of 
the methodology included in the implementing act.  

The European Parliament and the Council adopted the new rules in April 2017. All measures 
will be in place to abolish retail roaming charges from 15 June 2017. 

Outgoing  voice  calls 
(per minute) 
Incoming voice calls 
(per minute) 
Outgoing  texts  (per 
SMS message) 
(data, 
Online 
download, per MB) 

1 July 2014 
EUR 0.19 

30 April 2016 
Domestic  price  +  up 
to EUR 0.05 

EUR 0.05 

EUR 0.0108 

EUR 0.06 

EUR 0.20 

Domestic  price  +  up 
to EUR 0.02 
Domestic  price  +  up 
to EUR 0.05 

15 June 2017 

Roam  like  at  home  – 
no extra fee, same as 
domestic  price  when 
travelling in the EU 

2.1.2.  Spectrum – UHF band (including 700MHz band) 

Challenges addressed through the actions announced in the DSM Communication  

Radio  spectrum  is  an  essential  resource  for  wireless  communications.  Smart  phones  and 
tablets,  for  example,  depend  on  wireless  connectivity,  but  it  will  also  become  relevant  for 
traditional  sectors  that  will  use  the  next  generation  of  connectivity  (5G)  to  deliver  new 
wireless services, such as connected cars, or new mobile health applications. However, radio 
spectrum is  a finite resource and the devices that  use  it can easily cross borders. Therefore, 
logically, Europe needs to ensure sufficient spectrum is available in time to support these new 
services, and that EU-level coordination is effective and efficient.18  

What has been delivered? 

The Commission adopted its proposal for a Decision of the European Parliament and of the 
Council on the use of the 470-790 MHz frequency band in the Union on 2 February 2016.19  

The proposal intended to contribute to the availability of high-speed wireless broadband for 
all  EU  citizens  by  2020  and  facilitate  the  development  of  next  generation  connectivity 
services  through  harmonised  use  of  the  700  MHz  band.  The  coordinated  release  of  the  700 
MHz band will enhance rural and ubiquitous machine-type wireless connectivity of up to 100 

17  COM(2016) 399  
18  According to a recent study from the Commission (SMART 2016/0019), 5G applications would require up to 

an additional 56GHz of spectrum, depending on the usage scenario. 

19   COM(2016) 43 

7 

 
 
 
 
 
                                                            
Mb/s and enable leading 5G deployment in Europe by 2020, due to its ability to deliver cost-
efficient  wireless  connectivity  with  both  indoor  and  outdoor  coverage20.  It  can  also  be 
combined with other sub-1GHz bands, such as 800 MHz and 900 MHz, to boost capacity and 
provide wide coverage. At the same time, the lower part of the spectrum band will be reserved 
for  the  distribution  of  audio-visual  media  services  to  the  public,  while  allowing  technology 
and  service  neutrality  for  flexible  spectrum  use  on  a  national  basis  in  accordance  with 
broadcasting needs. 

On  14  December  2016,  the  co-legislators  reached  a  general  political  agreement  on  the 
proposal. On 15 March 2017 the finalised proposal was approved by the European Parliament. 

In  conjunction  with  the  proposal,  the  Commission  adopted  in  April  2016  an  Implementing 
Decision21,  which  harmonises  the  technical  conditions  for  use  of,  the  694-790  MHz  (700 
MHz) frequency band for wireless broadband and facilitates flexible use for specific national 
needs.  

2.1.3.  Cross-border portability of digital content 

Challenges addressed through the actions announced in the DSM Communication  

There are significant barriers limiting cross-border portability of online content services (e.g. 
audio-visual services including online transmission of sporting events) in the EU. The reasons 
behind these barriers are related to the licensing practices of right holders and the commercial 
practices  of  service  providers.  These  aspects  had  to  be  addressed  to  ensure  that  Europeans 
travelling  in  any  EU  Member  State  are  able  to  access  the  online  content  services  (films, 
sporting  broadcasts,  music, e-books  or  games)  to  which  they  have  subscribed  in  their  home 
country.  

What has been delivered?  

In  December 2015, the Commission  proposed a new Regulation22 ensuring the cross-border 
portability of online content services to which a consumer subscribed in their Member State 
of  residence.  That  means  consumers  can  continue  using  online  content  services  such  as 
watching films or sporting events, listening to music, reading e-books or playing games when 
temporarily traveling in other Member States, e.g. on holidays or business. Based on a 2015 
estimate, over 29 million people would have used this feature then and as many as 72 million 
would  do  so  in  2020.23  The  European  Parliament  and  the  Council  reached  a  political 
agreement  on  the  proposed  Regulation  on  7  February  2017.  The  Regulation  will  become 
applicable  in  the  beginning  of  2018  following  its  formal  imminent  adoption  and  a  9-month 
period provided to prepare for the application of the new rules. 

2.2. 

Proposals adopted by the Commission, awaiting co-legislature 

2.2.1.  Geo-blocking 

Challenges addressed through the actions announced in the DSM Communication  

20  Opinion of the Radio Spectrum Policy Group, document RSPG16-032 final 
21   Commission Implementing Decision (EU) 2016/687 
22   COM (2015) 627 final 
23   Impact Assessment report accompanying the proposal for a Regulation of the European Parliament and of the 
Council on ensuring the cross-border portability of online content services in the internal market; p. 12 and p. 
17; SWD(2015) 271, SEC(2015) 484  

8 

 
 
                                                            
Geo-blocking  refers  to  practices  used  by  traders  that  result  in  discrimination  against 
customers  on  the  basis  of  their  nationality,  place  of  residence  or  of  establishment.  This  can 
entail  denial  of  access  to  websites  from  other  Member  States,  or  to  situations,  where  the 
customer from another Member State is discriminated against or prevented from accessing the 
product  or  service  or  can  only  pay  with  a  debit  or  credit  card  from  a  certain  country. 
Sometimes  such  restrictions  can  be  justified,  for  instance  where  the  seller  needs  to  comply 
with specific legal obligations. But in many cases they cannot. Despite the implementation of 
the  non-discrimination  principle  in  the  Services  Directive24,  there  is  uncertainty  over  what 
constitutes objective criteria that justify differences in the way traders treat customers.  

By  limiting  consumer  opportunities  and  choice,  geo-blocking  is  a  significant  cause  of 
consumer dissatisfaction and of fragmentation of the Internal Market. A Commission mystery 
shopping survey found that in only 37 % of all websites assessed were shoppers successful in 
reaching the last stage of the online shopping process, where they successfully entered their 
payment  details  in  order  to  complete  their  cross-border  purchase.25  Removing  geo-blocking 
barriers  could  lead  to  an  aggregated  consumer  gain  of  EUR  500  million  and  an  aggregated 
firms' profit increase of EUR 283 million from new trade opportunities.26 

What has been delivered?  

In  May  2016  the  Commission  adopted  its  proposal  for  a  regulation  on  addressing  geo-
blocking and other forms of discrimination based on customers' nationality, place of residence 
or place of establishment.27 

The  proposal  defines  specific  situations  when  there  can  be  no  justified  reasons  for  geo-
blocking or other discriminations based on nationality, residence or location. Furthermore, the 
proposal  bans  blocking  of  access  to  websites  and  the  use  of  automatic  re-routing  if  the 
customer  has  not  given  prior  consent.  The  proposal  also  provides  for  a  non-discrimination 
rule in payments.  

2.2.2.  Digital Contracts (online content & distance sales of goods) 

Challenges addressed through actions announced in the DSM Communication  

Despite the rapid growth of e-commerce, most European businesses do not yet make the most 
of the DSM. European consumers also miss out on a potentially broader choice of products 
and  better  prices.  Legal  gaps  and  differences  between  the  relevant  contracts  laws  of  the 
Member States are among the obstacles still preventing this.  

For defective digital content there are no rules at EU level offering remedies. Some Member 
States  have started designing  their own laws in this area. For online sales  of goods, the EU 
still  works  with  28  partially  different  consumer  contract  laws.  This  situation  causes  legal 
uncertainty and results in a fragmented environment for businesses and less competitive offers 
for consumers. 

What has been delivered? 

24  Article 20(2) of Directive 20016/123/EC 
25  GfK  Belgium,  Mystery  Shopping  Survey  on  Territorial  Restrictions  and  Geo-Blocking  in  the  European 

Digital Single Market, May 2016 

26  Néstor  Duch-Brown,  Bertin  Martens,  The  Economic  Impact  of  Removing  Geo-blocking  Restrictions  in  the 

EU Digital Single Market, JRC Technical Report, 2016, p. 18 

27   COM(2016) 289 

9 

 
 
                                                            
(i) Proposal for a Directive on certain aspects of contracts for the supply of digital content 
The proposal for a Directive28 advocates for full harmonisation of key contract rules for the 
supply of digital content. It covers business-to-consumer transactions. 

(ii) Proposal for a Directive on certain aspects of contracts for the online and other distance 
sales of goods 

The proposal for a Directive29 advocates for full harmonisation of key contract rules for the 
online  and  other  distance  sales  of  goods.  This  proposal  too,  covers  business-to-consumer 
transactions. 

2.2.3.  Value Added Tax (VAT) for eCommerce 

Challenges addressed through the actions announced in the DSM Communication  

Companies, especially smaller ones, find it difficult and costly to comply with many different 
national  systems  for  value-added  tax  (VAT).  The  current  rules  impose  a  high  cost  of  doing 
business  cross-border  (companies  that  sell  goods  online  pay  around  EUR  8  000  in  VAT 
compliance  costs  for  every  EU  country  into  which  they  sell);  they  do  not  provide  a  level 
playing field. Companies based outside the EU can fraudulently mark expensive goods such 
as mobile phones and tablets as costing less than EUR 22, meaning that no VAT is paid. This 
puts  European  businesses  at  a  clear  disadvantage  vis-à-vis  non-European  ones  and  leads  to 
revenue losses for Member States. It is estimated that EUR 5 billion of VAT is lost each year 
in the EU due to non-compliance on cross-border online sales.  

What has been delivered?  

The Commission adopted a package of three proposals on 1 December 2016.30 This included: 

1) new  rules  allowing  companies  that  sell  goods  online  to  take  care  of  all  their  VAT 
obligations  in  the  EU  through  a  digital  online  portal,  hosted  by  their  own  tax 
administration and in their own language;  

2) support to startups and micro-businesses, via the introduction of a yearly VAT threshold of 
EUR 10,000 under which cross-border sales for online companies are treated as domestic 
sales, with VAT paid to their own tax administration  

3) the removal of the current exemption from VAT for imports of small consignments from 

outside the EU, which leads to unfair competition and distortion for EU companies;  

4) a change to existing VAT rules to enable Member States to apply the same VAT rate to e-
publications like e-books and online newspapers, as they apply to their printed equivalents.  

The new rules will have a major effect for companies selling goods and services online that 
will  now  be  able  to  benefit  from  fairer  rules,  lower  compliance  costs  and  reduced 
administrative  burdens.  Member  States  and  citizens  will  benefit  from  additional  VAT 
revenues of EUR 7 billion annually and a more competitive EU market. 

2.2.4.  Copyright  

Challenges addressed through the actions announced in the DSM Communication  

28  COM(2015) 634 final.  
29  COM(2015) 635 final..  
30  COM(2016)755, COM(2016)756, COM(2016)757.  

10 

 
 
                                                            
Users  often  face  barriers  when  accessing  copyright-protected  content  across  borders  due  to 
legal and/or contractual restrictions applied by the right holders and/or the service providers. 
Additionally,  the  clearance  of  rights  is  particularly  difficult  in  some  cross-border  situations, 
e.g.  in  the  case  of  certain  online  transmissions  of  broadcasters  or  the  digitisation  and 
dissemination of out-of-commerce works by cultural heritage institutions.  

Copyright exceptions currently allow for specific purposes and under specific conditions, the 
use of protected works without the authorisation of right holders - but most of the exceptions 
in EU law are optional, do not have cross-border effect or do not always cover digital uses. 
This  inhibits  new  ways  of  using  digital  materials  for  education,  research,  preservation  of 
cultural heritage and access to knowledge.  

Copyright-intensive  industries  account  directly  for  3.2  %  of  employment  in  the  EU  with 
around 7.05  million jobs (average between 2008-2010).  Overall, 4.2 % of the EU’s GDP is 
generated in copyright-intensive sectors. Copyright-intensive industries account for 4.2 % of 
EU’s exports, with net exports of around EUR 15 billion in 201031.  

In recent years, the internet has become the main marketplace for accessing and disseminating 
copyright-protected content but authors and other right holders face difficulties getting a fair 
share of the value generated by some forms of online content distribution.  

What has been delivered? 

In  September  2016,  following  the  first  legislative  initiative  on  cross-border  portability  of 
online content services (see 2.1.3), the Commission proposed a further package of legislative 
measures.32  

1) To ensure wider online  access to content in  the  EU, the  Commission  proposed  rules33 to 
make  it  simpler  and  faster  to  clear  the  copyright  and  related  rights  that  are  needed  for 
certain broadcaster' online services (such as simulcasting and catch-up TV/radio), and for 
re-transmission services via means such as IPTV. As a result, users will have access to a 
wider variety of broadcasters' TV and radio programmes from other Member States. Also, 
the Commission proposed to enhance the availability of audio-visual content on video on 
demand  platforms  through  the  introduction  of  a  negotiation  mechanism  facilitating  the 
conclusion  of  licences  for  audio-visual  works34.  Finally,  works  that  are out-of-commerce 
but hold great cultural value will become more easily available through the solutions that 
have been proposed to facilitate licensing of rights by cultural heritage institutions. 

2) To adapt certain exceptions to the digital and cross-border environment, the Commission 
proposed  new  mandatory  exceptions  in  the areas  of  education,  text  and  data-mining,  and 
preservation of cultural heritage.  

31  Intellectual  property  rights  intensive  industries:  contribution  to  economic  performance  and  employment  in 
the European Union. Industry-Level Analysis Report. A joint project between the European Patent Office and 
the Office for Harmonization in the Internal Market, September 2013. 

32  For an overview, see COM (2016) 0592 final 
33  COM(2016) 594  
34  COM(2016) 593 final 

11 

 
 
                                                            
3) To  foster  a  well-functioning  copyright  marketplace,  the  Commission  proposed  that  press 
publishers  will  be  provided  with  a  new  related  right  for  the  exploitation  of  their 
publications  in  the  digital  environment.  Other  measures  strengthen  the  position  of  right 
holders to negotiate the exploitation of their copyright protected content by online services 
storing  and  giving  access  to  a  large  amount  of  content  uploaded  by  their  users.  Right 
holders should be in a better position to decide on the use and possible remuneration for 
the  use  of  their  content  by  such  online  services.  Finally,  authors  and  performers  will 
benefit  from  increased  transparency  with  their  contractual  partners  on  the  exploitation  of 
their works and performances, which should help them to receive appropriate remuneration 
when  the  contractually  agreed  remuneration  is  disproportionately  low  compared  to  the 
success  of  their  work  (best-seller  clause).  The  Commission  is  committed  to  ensuring  the 
coherence  and  efficiency  of  results  in  view  of  the  sector  specific  discussions  that  are 
required for implementation. 

In parallel, two legislative proposals35 were adopted for the implementation in EU law of the 
Marrakesh  Treaty36  which  requires  the  contracting  parties  to  introduce  exceptions  for  the 
benefit of people with visual disabilities to access books and other print material in formats 
that are accessible to them as well as to ensure the cross-border exchange of such formats. As 
a result, blind and other print-disabled persons will have better access to special format copies 
of books from the EU and from other parts of the world. 

2.2.5.  Parcel delivery 

Challenges addressed through the actions announced in the DSM Communication  

Consumers  and  small  businesses  complain  that  problems  with  parcel  delivery,  particularly 
high  delivery charges  for  cross-border services, prevent them  from selling and buying more 
across the EU. Prices charged by postal universal service providers to deliver a small parcel to 
another Member State are on average three to five times higher than domestic prices, without 
a clear correlation to the actual costs. 

What has been delivered?  

The Commission adopted its proposal for a Regulation on cross-border parcels delivery37 on 
25 May 2016, as part of the DSM e-commerce package, together with the proposal addressing 
unjustified geo-blocking and the revision of the Consumer Protection Cooperation Regulation. 
This  is  a  package  of  complementary  measures  that  will  allow  consumers  and  companies  to 
buy  and  sell  products  and  services  online  more  easily  and  confidently  across  the  EU.  The 
proposed  Regulation  on  cross-border  parcel  delivery  complements  existing  non-legislative 
initiatives,  including  greater  interoperability  between  postal  operators,  trust  marks  and  new 
standards in the parcel sector. It should: 

1) make regulatory oversight more effective because all parcel delivery service providers will 

have to provide regulators with basic information about their services;  

2) require the prices of universal service providers to be assessed for affordability and name 
those  who  are  not  fulfilling  their  obligation  to  provide  affordable  cross-border  delivery 
services for consumers and small businesses; 

35  COM(2016) 596, COM(2016) 595 
36  The  Marrakesh  Treaty  to  Facilitate  Access  to  Published  Works  for  Persons  Who  Are  Blind,  Visually 

Impaired or Otherwise Print Disabled, signed on behalf of the EU on 30 April 2014. 

37  COM(2016)285 

12 

 
 
                                                            
3) give customers more choice of cross-border parcel services by requiring universal service 
providers to offer access to their cross-border networks in order to encourage new market 
entrants.  

2.2.6.  Consumer rights enforcement / Unfair Commercial Practices Directive 

Challenges addressed through actions announced in the DSM Communication  

The  Digital  Single  Market  Strategy  identified  a  problem  with  the  enforcement  of  consumer 
rights in the digital environment. EU-wide enforcement cooperation among public authorities 
is often slow or ineffective. It needs to be strengthened to prevent non-compliant traders from 
exploiting gaps and territorial and other limitations in Member States' enforcement capacity.  

A  key  piece  of  legislation  to  boost  fairness  in  e-commerce  transactions  is  the  Unfair 
Commercial  Practices  Directive  (UCPD)38.  But  EU  consumers  often  do  not  know  their 
rights,  and  businesses,  especially  new  digital  and  collaborative  business  models,  may  not 
comply as they are unsure which rules apply to them.  

What has been delivered? 

Consumer Protection Cooperation (CPC) Regulation 

In  May  2016,  the  Commission  proposed  a  reform  of  the  Consumer  Protection  Cooperation 
(CPC) Regulation39 that would: 

1) ensure  a  strengthened  and  more  efficient  enforcement  cooperation  framework  that  will 

increase legal certainty, particularly for traders and consumers active across borders; 

2) enable authorities, by means of additional powers, to (jointly)  act faster to stop widespread 

online infringements (e.g. interim measures to block infringing websites);  

3) provide  a  single  procedure,  launched  and  coordinated  by  the  Commission,  for  EU-wide 

problems.  

The EU-wide online dispute resolution platform 

In  the  beginning  of  2016,  the  Commission  opened  its  online  dispute  resolution  platform  to 
alternative dispute resolution (ADR) bodies and consumers. It helps consumers and traders to 
solve online disputes over a purchase made online (both domestic and cross-border), without 
going to court. In its first year of operation, the platform attracted more than 24,000 consumer 
complaints. More  than  one  third  of  the  complaints  concerned  cross-border  purchases  within 
the EU.  

Updated Guidance on the application of the Unfair Commercial Practices Directive 

In  May  2016,  as  part  of  the  e-commerce  package  the  Commission  adopted  a  staff  working 
document40  with  updated  guidance  on  the  application  of  the  Unfair  Commercial  Practices 

38   Directive 2005/29/EC. 
39  COM(2016) 283 final. 
40  SWD(2016) 163..  

13 

 
 
 
 
                                                            
Directive.  It  contains  a  specific  part  explaining  its  application  to  the  online  sector,  such  as 
online platforms, search engines, comparison tools41 and the collaborative economy.  

2.2.7.  Audio-visual Media Services 

Challenges addressed through actions announced in the DSM Communication  

Viewers, particularly minors, are moving from traditional TV to the online world. While TV 
broadcasting services are strictly regulated, on-demand services (Netflix, MUBI) are subject 
to  a  lighter  regulatory  regime  and  video-sharing  platforms  (YouTube,  Dailymotion)  are 
generally outside the rules' scope altogether. These discrepancies are especially found in the 
area of: 
1) advertising rules, which allow TV broadcasters little flexibility, in an environment  where 

consumers can easily switch to online ad-free offerings; 

2) the promotion of European works. Whereas European TV broadcasters invest around 20 % 

of revenues in original content, on-demand providers invest less than 1 %;  

3) consumer  protection  provisions  (especially  for  minors).  Rules  protecting  minors  from 
harmful  content  (pornography,  violence)  and  protecting  all  citizens  from  incitement  to 
hatred do not cover video-sharing platforms.  

What has been delivered?  

The Commission proposed a revision of the Audiovisual Media Services Directive (AVMSD) 
in May 201642. The proposal introduces flexibility when restrictions applicable to TV are no 
longer  justified,  whilst  ensuring  consumers  will  be  protected  in  the  on-demand  and  internet 
world.  

The proposal  strengthens requirements  on the promotion of  European works for on-demand 
services (20 % quota of European Works in their catalogues, good visibility of such works in 
their offers). In some Member States this would result in an increase in consumer choice by 
up to 450 EU films.43 

If  the  proposed  Directive  is  adopted,  video-sharing  platforms  will  have  to  take  measures  to 
protect  minors  from  harmful  content  and  to  protect  all  citizens  from  incitement  to  hatred, 
based  on  new  EU-specific  terms.  This  would  be  done  while  respecting  the  lack  of  editorial 
control over the content they host and building on existing efforts by the industry.  

On the other hand, it is proposed to provide more flexibility to TV broadcasters on advertising 
rules, product placement and sponsoring. Having simplified rules on product placement and 
sponsorship could generate additional revenue of respectively EUR 1.2 billion and EUR 441 
million  for  broadcasters  and  on-demand  services  in  the  EU.44  An  increase  in  advertising 
revenues  would  increase  their  capacity  to  invest  in  audio-visual  content,  which  will  benefit 
both the competitiveness of the EU audiovisual industry and consumers.  

41  The Commission launched a Multi-stakeholder Group on Comparison Tools, which in 2016 agreed on Key 
Principles  for  Comparison  Tools,,  http://ec.europa.eu/consumers/consumer_rights/unfair-trade/comparison-
tools/index_en.htm 
42  COM(2016) 287 final 
43  European  Audio-visual  Observatory,  Origin  of  films  and  TV  content  in  VOD  catalogues  in  the  EU  and 
Visibility  of  films  on  VOD  services  Study  –(https://ec.europa.eu/digital-single-market/en/news/demand-
audiovisual-markets-european-union-2016) 

44  Study  on  defining  a  new  framework  for  the  monitoring  of  advertising  rules  under  the  Audiovisual  Media 

Services Directive (SMART 2014/0052) 

14 

 
 
                                                            
Additionally, the proposal seeks to simplify the rules on jurisdiction and clarify cooperation 
procedures that govern limitations to the country of origin principle.  

The  proposal  provides  that  Audio-visual  Regulators  have  to  be  independent,  and  gives  the 
European Regulators Group for Audio-visual Media Services a bigger role in preserving the 
internal market (assessing EU co-regulatory codes, derogations to country of origin principle). 

2.2.8.  European Electronic Communications Code, BEREC & WiFi4EU 

Challenges addressed through the actions announced in the DSM Communication  

The  electronic  communications  sector  is  undergoing  structural  change  and  suffers  from 
isolated  national  markets,  a  lack  of  regulatory  consistency  and  predictability  across  the  EU 
(particularly  for  radio  spectrum),  and  a  lack  of  sufficient  investment,  notably  in  rural  areas. 
Rural  areas  suffer  from  an  undersupply  of  fast  broadband:  in  2016,  despite  substantial 
improvement only 40 % of rural areas were covered by the Next Generation Access (NGA) 
networks, compared to 76 % EU wide.45 

The  regulatory  framework  has  successfully  promoted  and  fostered  retail  competition  in  the 
telecom  sector,  but  not  enough  'infrastructure'  competition  has  emerged  in  fixed-line 
networks, except in very densely populated areas, where cable networks were already present, 
or where local authorities have been active. Therefore the regulatory framework for electronic 
communications  needs  to  encourage  the  deployment  of  very  high  capacity  networks  while 
maintaining effective competition and adequate returns relative to risks.   

The changing market and technological  environment calls for strengthening the institutional 
framework.  Enhancing  the  role  of  bodies  in  which  the  Member  States'  authorities  are 
themselves  represented  –  such  as  the  Body  of  European  Regulators  for  Electronic 
Communications (BEREC) or the Radio Spectrum Policy Group – is also required. 

Telecoms  operators  compete  with  services  that  are  increasingly  used  by  end-users  as 
substitutes for traditional electronic communications services such as voice telephony, but are 
not subject to the same regulatory regime.  

What has been delivered?  

As part of its Connectivity Package, in September 2016 the Commission adopted a proposal 
for a Directive establishing the European Electronic Communications Code (Recast)46 and a 
proposal  for  a  Regulation  establishing  the  Body  of  European  Regulators  for  Electronic 
Communications47, as well as the proposed WiFi4EU initiative48. 

The proposed Code aims to modernise and simplify the telecoms regulatory framework so as 
to reflect technological and market developments (in particular the growth of internet-based 
services) and to incentivise investments in very high capacity networks. Results in the Digital 
Economy  and  Society  Index49  show  a  clear  correlation  in  Member  States  between 
performance in terms of connectivity and overall digital performance. 

45  Broadband coverage in Europe in 2016, study for the EC by IHS and Point Topic, SMART 2016/0045. 
46  COM (2016) 0590 
47   COM(2016)591 
48   COM(2016)589 
49   https://ec.europa.eu/digital-single-market/desi  

15 

 
 
                                                            
The  proposed  BEREC  Regulation  aims  to  enhance  the  powers  and  functions  of  BEREC  in 
order to contribute to a more consistent application of the telecom rules throughout the EU. 
The  proposal  also  aligns  BEREC's  structure,  governance,  operation,  programming  and 
accountability with the 'common approach' on decentralised agencies of July 2012. 

The  Commission  is  conducting  an  evaluation  study  to  assess  the  impact  of  the  Broadband 
Cost Reduction Directive50 on the cost of EU-funded broadband projects, by July 2018. 

Accompanying measures to support internet connectivity  

The  Commission,  in  addition  to  proposing  regulatory  incentives  for  private  investment,  is 
working  on  making  the  use  of  public  funding  smarter  and  more  efficient.  The  WiFi4EU 
initiative  aims  to  make  financial  incentives  available to  public  entities who  want  to  provide 
free, high capacity local wireless connectivity in public spaces within their jurisdiction or at 
their  sites  of  service.  Moreover,  in  December  2016  the  Commission  and  the  European 
Investment  Bank  announced  the  launch  of  a  fund  for  broadband  infrastructure  –  the 
Connecting  Europe  Broadband  Fund  -  open  to  participation  of  National  Promotional  Banks 
and Institutions and private investors, which is capitalising on a EUR 100 million Connecting 
Europe  Facility  contribution.  On  the  basis  of  EUR  500  million  from  public  and  private 
sources,  it  is  expected  to  trigger  additional  investments  in  broadband  deployment  in  less 
densely  populated areas  amounting  to  between EUR  1  billion  and  EUR  1.7  billion  between 
2017  and  2021.  Additional  support  is  provided  by  the  European  Fund  for  Strategic 
investment, the Connecting Europe Facility and EIB lending activity.51 About EUR 1 billion 
has  been  approved  under  the  European  Fund  for  Strategic  Investments  (EFSI)  triggering 
around  EUR  3.2  billion  of  total  EFSI  related  investments  for  broadband-related  projects  by 
April 2017.52 

Additionally,  under  the  current  financial  framework,  around  EUR  6  billion  of  European 
Structural  and  Investment  Funds  (ESIF)  and  European  Agricultural  Fund  for  Rural 
Development  (EAFRD)  funds  are  supporting  broadband  roll  out  in  under-served  areas, 
including  the  infrastructure  needed  for  the  adoption  of  digital  services  for  a  smart  rural 
economy.. 

An  element  to  ensure  complementarity  between  funds  is  the  network  of  Broadband 
Competence  Offices53  supported  by  a  Brussels-based  support  facility,  which  among  other 
activities helps local project managers to find the most appropriate funding sources available 
for  their  type  of  broadband  infrastructure  projects.  The  official  launch  of  this  Broadband 
Competence  network  is  planned  for  November  2017.  In  addition,  the  European  Investment 

50   Directive 2014/61/EU of the European Parliament and of the Council of 15 May 2014 on measures to reduce 

the cost of deploying high-speed electronic communications networks 

51   For example, in Italy the project "TI – Accelerated High Speed Broadband Rollout" aims at increasing ultra-
high-speed broadband network reach by about 7 million households and increasing the population coverage 
by 32% to 60% of all Italian households. The EIB financing amounts to EUR 500m for a total cost of EUR 
1808m. 
http://www.eib.europa.eu/projects/pipelines/pipeline/20150189.  
For 
submitted 
http://www.eib.europa.eu/projects/pipelines/index.htm.  
For more information on EFSi projects see http://www.eib.europa.eu/efsi/efsi-projects/index.htm?c=&se=4. 

financing 

purposes 

projects 

EIB 

see 

the 

for 

to 

52   The list of projects is available on http://www.eib.org/efsi/efsi-projects/index.htm?c=&se=4. 
53   https://ec.europa.eu/digital-single-market/en/broadband-competence-offices. 

16 

 
 
                                                            
Advisory Hub54 provides a single access point to advisory and technical assistance services on 
investment.  

Meeting  Europe's  internet  connectivity  objectives  will  also  require  pro-active  national  or 
regional policies.  The Commission  has  called  on Member  States to  review progress  in  their 
National Broadband Plans (NBPs) and update them by the end of 2017 for a time horizon of 
2025. The Commission has reported on the development of National Broadband Plans in its 
Digital  Progress  Reports.  In  addition,  an  independent  study  on  Member  States'  NBPs, 
financed  by  the  Commission,  provided  a  comparative  assessment  of  these  plans55.  A 
"Connectivity/5G Working Group" is being set up to address the revision of NBPs and ensure 
the inclusion of the 5G roadmaps – actions that Member States are expected to complete by 
the  end  of  2017.  This  work  will  inform  the  development  of  voluntary  'guidelines'  on  the 
aspects  to  be  covered  by  the  update  of  NBPs  with  a  time  horizon  of  2025  and  ensure 
alignment with the new strategic objectives. It should also help identify Member States' best 
practice on administrative conditions and time frames to facilitate comprehensive coverage. 
The Commission and the Committee of the Regions have announced56 the setting-up of a joint 
Participatory  Broadband  Platform  involving  local  and  regional  decision-makers  in  the 
discussion of connectivity policies. 
The  Commission’s  State  Aid  broadband  guidelines  furthermore  inform  Member  States  on 
how their intended subsidies can be channelled in a pro-competitive manner. As announced in 
the DSM Communication, in the assessment of compatibility with the State Aid Framework 
of  public  support  to  future  broadband  projects,  the  Commission  will  take  into  account  the 
foreseeable evolution of long-term demand when applying the "step change" approach of the 
Broadband  State  Aid  Guidelines  in  conjunction  with  the  strategic  objectives  set  in  the 
Communication.  The  Commission  will  also  consider  efficient  blended  financing  that 
contributes to lower the aid intensity and to reduce risks of distorting competition, as part of 
its assessment of State aid interventions. 

2.2.9. 

ePrivacy 

Challenges addressed through the actions announced in the DSM Communication  

The  General  Data  Protection  Regulation  (GDPR)57  will  protect  individuals  in  respect  of 
processing  of  personal  data.  Special  rules  on  data  protection  apply  in  the  electronic 
communications sector (ePrivacy Directive)58.  

The efficacy of the ePrivacy rules protecting the confidentiality of communications has been 
eroded  over  time  by  technological  changes.  Services  that  are  functionally  equivalent  to 
electronic  communications  services  (ECS),  such  as  the  over-the  top  (OTT)  services  (e.g. 
Skype,  WhatsApp  or  Viber)  are  not  subject  to  most  of  the  current  ePrivacy  Directive 
provisions.  

54  http://www.eib.org/eiah/ 
55  https://ec.europa.eu/digital-single-market/en/news/study-national-broadband-plans-eu-28-connectivity-

targets-and-measures  

56   http://cor.europa.eu/en/news/Pages/european-commission-and-the-european-committee-of-the-regions-

announce-a-new-broadband-platform-to-boost-connectivity-in-eu.aspx 

57   Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection 
of natural persons with regard to the processing of personal data and on the free movement of such data, and 
repealing Directive 95/46/EC (General Data Protection Regulation) 

58   Directive  2002/58/EC  of  the  European  Parliament  and  of  the  Council  of  12  July  2002  concerning  the 

processing of personal data and the protection of privacy in the electronic communications sector 

17 

 
 
                                                            
In  respect  of  the  confidentiality  of  terminal  equipment,  which  applies  e.g.  to  cookies,  the 
consent requirement has a number of problems: users do not read long and complex privacy 
statements and find it difficult to understand what consent implies. Moreover, the rule is not 
well adapted to more recent technology: it also applies to non-intrusive practices but it does 
not address new tracking techniques (e.g. device fingerprinting). 

Diverging  implementation,  interpretations  and  inconsistent  enforcement  of  several  key 
provisions  also  create  problems.  This  is  linked to  the  current  system  of  enforcement,  where 
Member States are free to choose which authorities are competent.  

What has been delivered? 

In  2016  the  Commission  undertook  a  REFIT  evaluation  of  the  ePrivacy  Directive  which 
assessed the functioning of the applicable legal framework and the objectives of the Directive. 

The  Commission  adopted  its  proposal  for  an  ePrivacy  Regulation59  in  January  2017  which  
complements  and  particularises  the  GDPR  regarding  the  protection  of  personal  data  and 
implements  in  secondary  Union  law  the  right  to  the  respect  of  private  life,  with  regard  to 
communications (Article 7 of the EU Charter of Fundamental Rights), in addition to the right 
to the protection of personal data (Article 8 of the Charter). As to its main content: 

1) It protects the confidentiality of electronic communications (content and related traffic and 
location  data  –  metadata)  via  publicly  available  electronic  communications  services. 
Electronic  communications  service  providers  can  normally  only  process  electronic 
communications data based on the users' consent. Without consent the processing can only 
take place for specific purposes, such as the technical storage for transmission, billing or 
ensuring  the  quality  of  the  service.  The  new  ePrivacy  proposal  is  technology-neutral.  It 
will  apply  to  both  traditional  telecoms  operators  (ECS)  and  the  “over-the-top”  service 
providers as long as they provide electronic communications services. 

2) As  regards  online  tracking,  to  minimise  the  number  of  cookie  banners  on  websites,  the 
users will be required to choose a specific privacy setting when they install their browser. 
They will also be able to modify their privacy setting easily and at any point in time.  

3) 92 % of survey respondents say it is important that personal information on their computer 
or  smartphone  can  only  be  accessed  with  their  permission  and  that  the  confidentiality  of 
their e-mails and instant messaging is guaranteed.60 

4) The  proposal  also  contains  rules  on  calling  line  identification,  incoming  call  blocking, 

unsolicited marketing communications (spam).  

5) The  enforcement  of  the  ePrivacy  Regulation,  including  the  choice  of  national  competent 

authorities, is brought in line with the GDPR. 

2.2.10.  Enforcement of intellectual property rights  

Challenges addressed through the actions announced in the DSM Communication  

Respect for intellectual property rights  is  essential to  promote creativity and innovation  and 
create  trust  in  the  market  place.  Rights  that  cannot  be  effectively  enforced  have  little 
economic value, particularly when infringements occur on a commercial scale that free-rides 
on  the  work  and  investment  of  creators,  the  industry  and  legal  distribution  services.  Such 

59   COM(2017) 10 
60   Flash Eurobarometer survey on ePrivacy (2016). 

18 

 
 
                                                            
commercial-scale  infringements  are  currently  very  frequent  and  harmful,  not  only  to  right 
holders but also to the EU economy as a whole. An effective and balanced civil enforcement 
system,  which  takes  full  account  of  fundamental  rights,  is  required  to  reduce  the  costs  of 
fighting  infringements,  particularly  for  small  businesses,  and  keep  up  with  their  increasing 
cross-border nature.  

The Commission is exploring whether the current legal framework, in particular the Directive 
on the enforcement of intellectual property rights (IPRED)61, is fully fit for the challenges of 
the  Digital  Single  Market.  This  is  being  assessed,  in  particular  through  a  REFIT  evaluation 
that the Commission began in 2016. 

What has been delivered?  

Voluntary  cooperation  agreements  between  right  holders  and  intermediary  service 
providers  can  include  a  set  of  principles  and  rules  aimed  at  identifying  and  disrupting  the 
revenue  stream  for  commercial  scale  infringements  of  intellectual  property  rights.  The  first 
Memorandum  of  Understanding  brokered  by  the  Commission  in  2011  on  the  sale  of 
counterfeit goods via the internet62 was reviewed in June 2016 to include Key Performance 
Indicators  that  will  allow  for  the  impact  of  the  Memorandum  of  Understanding  to  be 
objectively quantified. A new agreement between the advertising industry, right holders and 
advertisers is expected to be signed by the summer of 2017. 

The  preliminary  findings  of  the  above-mentioned  REFIT  evaluation  lead  to  the  conclusion 
that the existing rules have helped effectively in protecting intellectual property rights (IPR) 
and  preventing  infringements  by  creating  a  broadly  common  legal  European  framework. 
However, the evaluation has also shown that there are differences in the way some measures, 
procedures and remedies of the IPRED are applied across the Member States.  

For  example,  Member  States  offer  different  levels  of  protection  to  right  holders  when 
awarding damages for IPR infringements. The data currently available show a great variation 
in  terms  of  damages  requested  as  well  as  awarded.  Between  2010  and  2015  the  average 
award  for  design  right  infringements  for  example  was  as  high  as  EUR  600,000  in  Italy  or 
EUR  500,000  in  Spain, while  German  courts  awarded  on  average  EUR  300,000  for  design 
cases. In the UK and France, average awards were about EUR 100,000. For patents-related 
litigation, the average amount of damages awarded was EUR 1.3 million in Spain, whereas 
German  courts  awarded  on  average  EUR  600,000,  Italian  and  the  UK  courts  around  EUR 
400,000, and in France EUR 200,000. 

The REFIT  evaluation findings  point  at some other problems as  well:  for example, the use 
and  presentation  of  digital  evidence  and  the  access  to  digital  information  is  not  explicitly 
regulated by IPRED which may reduce  its effectiveness in combating  infringements on the 
internet.  

Moreover, while intermediaries can play an important role in the protection of IPR there are 
differences in the EU as regards the use of the right of information and of interlocutory and 
permanent  injunctions.  For  example,  under  the  IPRED,  permanent  injunctions,  which  can 
permanently  prohibit  the  continuation  of  an  infringement,  must  be  available  also  against 
intermediaries whose services are used by third parties to infringe IP rights. Yet the REFIT 

61   Directive 2004/48/EC, OJ L 157, 30.4.2004 
62   http://ec.europa.eu/internal_market/iprenforcement/docs/memorandum_04052011_en.pdf  

19 

 
 
                                                            
evaluation shows that significant disparities remain in the EU in the scope and criteria under 
which such injunctions are available against intermediaries. 

2.2.11.  E-commerce sector inquiry 

Challenges addressed through the actions announced in the DSM Communication  

The Commission launched an antitrust competition inquiry into the e-commerce sector in the 
EU.  The  inquiry  particularly  focused  on  potential  barriers  erected  by  companies  to  cross-
border  online trade  in  categories  of consumer goods where e-commerce  is  most  widespread 
such  as  electronics,  clothing  and  shoes,  as  well  as  in  the  provision  of  digital  content,  in 
particular the online provision of audio-visual and music products. The objective of the sector 
inquiry  was  to  understand  the  prevalence  of  certain  business  practices  and  their  underlying 
rationale, to allow the Commission to identify possible competition concerns in European e-
commerce markets and to identify priorities for the enforcement of EU competition rules.  

During  the  inquiry,  the  Commission  has  gathered  evidence  from  nearly  1  800  companies 
operating in e-commerce of consumer goods and digital content and has analysed more than 
8 000 distribution contracts.  

What has been delivered?  

In  March  2016,  the  Commission  published  initial  findings  on  geo-blocking  in  an  issues 
paper.63  

In  September  2016,  the  Commission  published  a  Preliminary  Report  on  the  e-commerce 
sector inquiry64 setting out its initial findings. The publication of the Preliminary Report was 
followed by a public consultation open to all interested stakeholders. The public consultation 
ended on 18 November 2016. Altogether 66 submissions were made in relation to consumer 
goods and digital content. 

The Commission published the Final Report on the E-commerce Sector Inquiry65. The Report 
confirms that e-commerce is an important driver of price transparency and price competition, 
increasing  consumers'  choice  and  their  ability  to  find  the  best  deals.  This  transparency  also 
impacts the supply side: the report finds that manufacturers have responded to the growth of 
e-commerce  by  adopting  a  number  of  practices  to  better  control  the  distribution  of  their 
products and the positioning of their brands. 

(i)  To  reap  the  benefits  of  online  sales  and  better  control  distribution,  manufacturers 
increasingly  sell  their  products  online  directly  to  consumers.  Selective  distribution  systems 
are  also  used  more  widely,  allowing  the  manufacturers  to  set  the  criteria  that  online  and 
offline retailers must meet to become part of the distribution network. 

The report also points to an increased recourse to restrictive business practices that may limit 
online  competition.  Depending  on  the  business  model  and  strategy,  restraints  may  take 
various  forms,  such  as  resale  price  restrictions,  contractual  restrictions  on  selling  on  online 
marketplaces  (platform  bans)  or  on  submitting  offers  to  price  comparison  websites  (price 
comparison  tool  bans),  the  exclusion  of  pure  online  players  from  distribution  networks,  as 
well as contractual restrictions on cross-border sales, which are often implemented by means 

63  SWD (2016) 70 final. 
64  SWD (2016) 312 final.  
65  COM(2017) 229. 

20 

 
 
                                                            
of  geo-blocking.  The  results  of  the  sector  inquiry  show  that  the  majority  of  geo-blocking 
measures in relation to consumer goods result from unilateral business decisions of retailers 
not to sell cross-border. These contractual sales restrictions may, under certain circumstances, 
make cross-border shopping or online shopping more difficult and ultimately harm consumers 
by preventing them from benefiting from greater choice and lower prices. 

(ii)  Digital  content:  The  Report  finds  that  the  way  copyright  licensing  agreements  are 
structured  has  a  major  impact  on  competition.  The  license  agreements  determine  what 
territories,  technologies  and  release  windows  digital  content  providers  can  use.  The  Report 
found that more than 60 % of the licence agreements submitted by rights holders are limited 
to the territory of a single Member State. Almost 60 % of responding digital content providers 
have contractually agreed with right holders to geo-block. There are however stark differences 
as  regards  Member  States  and  content  sectors  when  it  comes  to  the  prevalence  of  geo-
blocking. The results of the e-commerce sector inquiry raise the question of whether certain 
licensing practices may make it more difficult for new online business models and services to 
emerge and for new or smaller players to enter existing markets or to grow and expand their 
activities into other markets or whether these licensing practices are justified66. 

In  the  light  of  the  findings  of  the  sector  inquiry  the  Commission  has  already  opened  three 
investigations  into  alleged  anti-competitive  practices  for  consumer  electronics,  video  games 
and hotel accommodation. 

3. 

ENSURING A FAIR, OPEN AND SECURE DIGITAL ENVIRONMENT 

The DSM Strategy provided a comprehensive analysis and action plan to achieve a connected 
Digital Single Market. Its pillars focused on better online access for consumers and businesses 
across  Europe,  creating  the  right  conditions  and  a  level  playing  field  for  advances  digital 
networks  and  innovative  services  as  well  as  maximising  the  growth  potential  of  the  digital 
economy.  

While working on the implementation, over the last 2 years the digital society and economy 
has  been  evolving.  Section  3  addresses  the  digital  developments,  such  as  the  regulatory 
environment  for  online  platforms,  innovative  solutions  with  the  help  of  data  and  tackling 
cybersecurity challenges in the future. 

3.1. 

Promoting Online Platforms as responsible players of a fair internet ecosystem 

Policy Context  

Online platforms play a central role in social and economic life; they revolutionised the digital 
economy  and  access  to  information  and  content  in  an  increasingly  cross-border  context.  A 
comprehensive  analysis  of  the  role  of  online  platforms  in  the  market,  including  in  the  fight 
against  illegal  content  on  the  internet,  is  a  key  component  of  the  DSM  Strategy.  Some 
important findings include: 

66  Any assessment of certain licensing practices under EU competition rules would have to take into account the   
characteristics  of  the  content  industry,  the  legal  and  economic  context  of  the  licensing  practice  and/or  the 
characteristics of the relevant product and geographic markets. 

21 

 
 
 
                                                            
1) At the end of 2015, the largest 178 online platform enterprises alone accounted for 25 % of 

global web-based internet traffic - excluding app-based traffic.67  

2) 39  %  of  all  European  businesses  used  online  social  media  in  2015,  with  social  networks 
being the dominant outlet.68 At the same time, six in ten EU internet users that responded 
to a recent Eurobarometer survey declared using online social media at least once a week.69 
3) 82 % of SME respondents to a recent Eurobarometer on online platforms70 rely on search 
engines to sell products and/or services online, with 66 % indicating that their position in 
the search results has a significant impact on their sales.  

4) 42  %  of  those  SME  respondents  use  online  market  places  to  sell  their  products  and 
services,  with  52  %  stating  that  their  company’s  reviews  on  online  platforms  have  a 
significant impact on their sales. 

5) 90  %  of  respondents  to  the  Commission's  Business-to-Business  (B2B)  business  panel 
survey use online social media platforms for business purposes, with 72 % of respondents 
using one and the same firm.71  

6) 56  %  of  respondents  to  the  Commission's  B2B  business  panel  survey  considered  the 
platforms they use to reach customers as 'important' or 'very important' to their business.72 
7) A  2014  study  showed  a  majority  of  EU  software  application  developers  complaining  of 
their de facto total dependence on online platforms, with subsequent revenue impact.73  
8) Several international organisations, such as the Council of Europe74, United Nations75 and 
the  Organization  for  Security  and  Co-operation  in  Europe  (OSCE)76,  call  for  greater 
transparency and due process around the removal of illegal or harmful content online. 

67  Bertin  Martens  (2016)  An  Economic  Policy  Perspective  on  Online  Platforms.  Institute  for  Prospective 

Technological Studies Digital Economy Working Paper 2016/05. JRC101501 

68  Eurostat,  Social  media  -  statistics  on  the  use  by  enterprises  http://ec.europa.eu/eurostat/statistics-

explained/index.php/Social_media_-_statistics_on_the_use_by_enterprises . 

69   Special Eurobarometer 447, Online Platforms, June 2016. 
70   Flash Eurobarometer 439 on the use of online marketplaces and search engines by SMEs,  June 2016. 
71   Ecorys/Kantar TNS 'European SMEs dealing with digital platforms', of January 2017. 
72   Ecorys/Kantar TNS 'European SMEs dealing with digital platforms', of January 2017. 
73   http://europa.eu/rapid/press-release_IP-14-145_en.htm . 
74   The  Council  of  Europe's  Guide  on  Human  Rights  for  Internet  Users  explains  that  the  provider  of  online 
content and services has "corporate responsibilities to respect your human rights and provide mechanisms to 
respond  to  your  claims.  You  should  be  aware,  however,  that  online  service  providers,  such  as  social 
networks,  may  restrict  certain  types  of  content  and  behaviour  due  to  their  content  policies.  You  should  be 
informed of possible restrictions so that you are able to take an informed decision as to whether to use the 
service or not. This includes specific information on what the online service provider considers as illegal or 
inappropriate  content  and  behaviour  when  using  the  service  and  how  it  is  dealt  with  by  the  provider". 
Currently,  the  Council  of  Europe  is  drafting  Recommendations  of  the  Committee  of  Ministers  to  Member 
States on internet intermediaries (foreseen to be adopted by end 2017). 

75  According  to  the  United  Nations  Guiding  Principles  on  Business  and  Human  Rights  Business,  enterprises 
have a responsibility to respect human rights, which requires them to avoid causing or contributing to adverse 
impacts  on  human  rights  and  to  provide  for  or  cooperate  in  the  remediation  of  such  impacts.  The  duty  to 
protect and to provide access to effective remedy is essentially incumbent on States. Furthermore, the study 
commissioned  by  UNESCO  "Fostering  freedom  online  –  the  role  of  internet  intermediaries"  promotes 
transparent  practices 
rights: 
to 
http://unesdoc.unesco.org/images/0023/002311/231162e.pdf.  

responsibility 

interference 

to  human 

corporate 

avoid 

and 

76  The OSCE Representative on Freedom of the Media, Dunja Mijatović issued recommendations to Member 
States stating that "excessive and disproportionate provisions regarding content takedown and intermediaries’ 
liability  create  a  clear  risk  of  transferring  regulation  and  adjudication  of  internet  freedom  rights  to  private 
actors and should be avoided. States should also discourage intermediaries from automatizing decisions with 
Pluralism 
clear 
Communiqué 
rights 
(https://www.osce.org/fom/219391?download=true). 
responsibilitiesfor  non-state  actors,  as  well  as  multi-stakeholder  debates  and  initiatives  such  as  the  Manila 
Principles2, should be given due consideration in this area. 

nº 
International 

1/2016 
documents 

implications": 

human 

human 

rights 

Open 

on 

on 

22 

 
 
                                                            
9) Following a recent study covering the terms of service of 50 well-known online platforms, 
almost 50 % of the platforms analysed contain clauses stating that some kind of monitoring 
is  conducted  without  specifying  what  type  of  content  may  be  affected,  or  doing  so 
ambiguously.  In  addition,  while  most  platforms  (70  %)  provide  clear  and  transparent 
information on how users report content they deem inappropriate (not illegal), the counter-
notice mechanisms are seen as suffering from lack of due process. Finally, the majority of 
platforms  (52  %)  explicitly  state  that  they  may  remove  content  based  on  third-party 
notification without offering any justification, notification or opportunity to be heard to the 
user who originally shared it.77 

What has been delivered?  

In its Communication on Online Platforms and the Digital Single Market Opportunities 
and  Challenges  for  Europe  of  25  May  201678  the  Commission  outlined  the  key  issues 
identified  in  the  assessment  of  online  platforms  and  set  out  its  position  on  the  innovation 
opportunities  and  regulatory  challenges  presented  by  online  platforms.  It  also  announced  a 
targeted fact-finding exercise on Business-to-Business (B2B) practices based on preliminary 
evidence  available,  inter  alia  through  the  public  consultation  that  informed  the  2016 
Communication79. At the same time, the Commission also committed to explore the need for 
guidance on the liability of online platforms and review the need for formal notice-and-action 
procedures  in  light  of  the  results  of  other  relevant  work  streams,  as  explained  below.  In 
addition,  the  Commission  committed  to  further  promoting  interoperability  actions  through 
issuing principles and guidance on electronic identification (eID) interoperability at the latest 
by 2017.  

The  competition  sector  inquiry  into  e-commerce80  (described  in  section  2.2.11)  and  the 
updated  UCPD  Guidance  (as  explained  in  section  2.2.6.)  are  also  relevant  to  online 
platforms, including their responsibilities stemming from the professional diligence duty and 
transparency obligations.  

As regards the responsibility of platforms, several on-going work streams aim to address the 
issue  of  illegal  or  harmful  online  content  and  their  transparency  requirements.  While  these 
initiatives  do  not  alter  the  liability  exemptions  applicable  to  online  intermediaries  in 
accordance  with  the  E-commerce  Directive81,  they  impose  certain  obligations  on  them  in 
specific  problem  areas.  The  legislative  proposals  on  copyright82  and  the  revision  of  the 
Audio-visual  Media  Services  Directive83,  the  proposed  Terrorism  Directive84  and  the 
ongoing  review  of  the  Directive  on  the  enforcement  of  intellectual  property  rights 
(IPRED) are the most relevant examples in this respect.  

77  "Terms  of  Service  and  Human  Rights  –  an  Analysis  of platforms  contracts"  (2016,  Center  for  Technology 

and Society / Fundaçao Getullio Vargas).  

78   COM(2016)288. 
79  SWD(2016) 172 final. 
80  COM(2017) 229. 
81   Directive 200/31/EU of the European Parliament and of the Council of 8 June 2000 on certain legal aspects 
of  information  society  services,  in  particular  electronic  commerce,  in  the  Internal  Market  ('Directive  on 
electronic commerce'), OJ L 178, 17.7.2000, p. 1–16 

82   COM(2016) 593 final. 
83   COM(2016) 287 final. 
84   COM(2015) 0625 final. 

23 

 
 
 
                                                            
In  respect  of  non-legislative  initiatives,  the  work  of  the  EU  Internet  Forum  as  well  as  the 
code of conduct on countering illegal hate speech online should be mentioned. In line with 
the  Communication,  the  implementation  of  these  voluntary  measures  is  currently  being 
monitored to assess the effectiveness of self-regulation to tackle illegal content.  

In  2015,  the  Commission  awarded  funding  for  actions  to  support  transnational  projects  to 
combat  sexual  harassment  and  sexual  violence  against  women,  including  in  the  online 
sphere.85 

The Alliance to Better Protect Minors is a self-regulatory initiative bringing together leading 
ICT and media companies, civil society and UNICEF to provide fast and flexible solutions for 
protecting minors online in a highly dynamic technological landscape.86  

The Memorandum of Understanding on the sale of counterfeit goods via the internet was 
reviewed in June 2016 to include Key Performance Indicators that will allow its impact to be 
objectively  quantified.  Therein,  the  need  to  position  the  EU  competitively  in  the  global 
platform  economy  was  identified  as  a  long-term  strategic  policy  objective.  This  requires  a 
continued  analysis  of  policy  options  to  improve  the  online  platform  e-commerce  ecosystem 
on a global level. 

New developments and challenges  

Ensuring a fair and innovation-friendly platform economy 

a) Fact-finding exercise 

The on-going horizontal fact-finding exercise on potentially unfair B2B practices in the online 
platform environment notably includes: (i) a survey completed by 3 549 businesses users of 
online platforms87, complemented by 50 in-depth interviews and several in-depth case studies; 
(ii) a number of workshops with business users of online platforms on the respective topics of 
data,  legal  terms  and  conditions  and  transparency,  as  well  as  the  use  of  algorithms88;  (iii) 
several external studies (including legal studies on online platforms' terms and conditions), as 
well  as;  (iv)  internal  research  on  the  economic  aspects  of  online  platforms  and  their  B2B 
practices.  The  Commission  also  organised  a  stakeholder  workshop  bringing  together  online 
platforms and business associations representing them, which addressed the practices reported 
during the B2B fact-finding exercise.  

The survey of business users shows that many professional users (46 %) experience problems 
or disagreements with online platforms in the course of their business relationship. Among the 
business  users  with  more  than  half  of  their  turnover  generated  via  online  platforms  (heavy 
users), the share of those that experienced problems is significantly higher (75 %). Out of all 
business users who have experienced problems, 21 % indicated that they occurred often over 

85  http://ec.europa.eu/justice/grants1/calls/2015_action_grants/just_2015_rdap_ag_sexv_en.htm . 
86   https://ec.europa.eu/digital-single-market/en/alliance-better-protect-minors-online. 
87   This stakeholder consultation consisted of five separate surveys: two invitation-only surveys for a large pre-
selected sample of, respectively, online platforms and their business users, two open surveys made accessible 
through the European Commission's website for all platforms and their business users and a business panel 
comprising around 2 500 business users of online platforms.  

88  High-level  reports  are  available  on 

the  Commission's  website:  https://ec.europa.eu/digital-single-

market/en/news/terms-and-conditions-and-algorithms-platform-business-trading-practices . 

24 

 
 
                                                            
the  course  of  the  business  relationship.  As  regards  heavy  users  of  online  platforms,  again  a 
significantly higher share (32 %) experienced problems often. 

A significant proportion of these problems remains unresolved, as follows. Whereas 11 % of 
respondents that experienced problems did not even undertake any action to resolve these, an 
additional 32 % of those respondents that did attempt to resolve them failed to do so. A total 
of  258  businesses  (i.e.  7  %  of  all  respondents  and  16  %  of  those  who  experienced  issues) 
indicated that they reduced or terminated their relationship with the platform as a result of the 
problems  experienced.  The  effects  of  reductions  and  terminations  vary,  but  an  important 
percentage of firms that terminated their relationship with the platform generated more than 
50 % of their turnover through that channel.  

20  %  of  business  user  respondents  in  addition  disagreed  that  online  platform'  contractual 
terms  and  conditions  and  related  practices  are  fair.  The  reasons  stated  for  this  perceived 
unfairness  overlap  to  a  significant  extent  with  the  types  of  problems  and  disagreements 
encountered. They include a lack of transparency on platforms' practices concerning data and 
content;  sudden  changes  in  contractual  terms  or  prices  which  business  users  are  unable  to 
negotiate  and  de-listing89;  biased  or  non-transparent  search  practices;  limitations  on  access, 
use and portability of data; limited access to dispute resolution and unfair pricing. 

A series of interviews conducted with heavy users of platforms provided deeper insight into 
the possible effects of these practices for the businesses in question. Some were reported to 
have an immediate effect on operating conditions, including alleged unequal pricing, alleged 
unfair competition by platforms (vertical integration), suspension of accounts without giving 
enough information to react and overall insufficient redress mechanisms.  

The  discussions  during  the  Commission  workshops  with  business  users  of  platforms  also 
covered these issues. During the workshop dedicated to platforms' legal terms and conditions, 
the inability for business users to negotiate terms was agreed upon as the most common issue, 
together with online platforms' practice of unilaterally changing them, often without notice.90 
Account  suspensions  and  delisting  of  products  were  singled  out  as  well.  Overall,  the  terms 
and conditions of online platforms were characterised as being generally complex and vague, 
therefore  leaving  significant  scope  for  interpretation  to  the  platforms'  advantage  when 
elaborating  the  practices  that  actually  regulate  businesses'  experience  with  the  platform. 
Another  general  conclusion  highlighted  the  lack  of  an  effective,  accessible  and  quick 
independent redress mechanism.91  

89  An important additional finding in this respect is that four out of five market places that participated in the 
Commission's e-commerce sector inquiry reported that they remove items or sellers from the market place on 
their own initiative, i.e. without receiving any notice from third-parties, cf. SWD(2016) 312 final, paragraph 
462. 

90  This is consistent with the finding in the Commission's e-commerce sector inquiry that the  majority  of the 
contractual  relationships  that  online  e-commerce  market  places  have  in  place  with  sellers  are  based  on 
standard  agreements,  with  only  13  %  of  the  respondent  platforms  negotiating  more  than  10  %  of  their 
contracts individually, cf. SWD(2016) 312 final, paragraph 90.  

91  The latter finding is consistent with that in a recent Eurobarometer study on the use of online marketplaces 
and  search  engines by  SMEs  (see Flash  Eurobarometer  439.  Less  than  half (40 %) of  businesses  surveyed 

25 

 
 
                                                            
 
On  data,  a  number  of  workshop  participants  reported  that  online  platforms  in  some  cases 
restrict access to customer contact details, or impose limitations on the re-use of certain data. 
In advertising, businesses reported difficulties in accessing ad performance data and data on 
their sales statistics, which would lead to difficulties for them in assessing the effectiveness of 
their  advertising  campaigns,  or  adjusting  their  campaigns  where  and  if  necessary.  These 
findings  on  the  sharing  of  data  in  platform-to-business  relations  seem  consistent  with  the 
results  of  a  previous  Eurobarometer  study  on  the  use  of  online  marketplaces  and  search 
engines  by  SMEs.92  Almost  two  thirds  of  the  4  900  surveyed  companies  replied  that  the 
information  about  customers  received  through  online  marketplaces  (commercial  data)  is 
useful to develop or improve their products or services. However, 42 % said that they usually 
do not get the data they need about their customers from online marketplaces. 47 % stated that 
it  is  not  easy  to  transfer  key  commercial  data  about  their  customers  from  one  online 
marketplace to another. 

Participants  to  the  workshop  on  algorithms,  search  and  ranking  described  a  common  set  of 
issues  as  well  as  certain  more  sectorial  problems  depending  on  the  type  of  platforms  (e-
commerce for goods, online travel agencies online advertising, app stores and social media). 
Among  the  common  findings,  an  issue  of  general  concern  was  the  lack  of  transparency  or 
verifiability  around  the  way  in  which  platforms  actually  use  algorithms.  Examples  were 
mentioned  of  platforms  possibly  de-ranking  or  otherwise  penalising  businesses  for  matters 
unrelated to their performance in the criteria usually incorporated in the algorithms. 

Online  platforms  that  participated  in  the  final  Commission  workshop  agreed  that  some 
growing pains exist in some of the areas highlighted by their business users, but specified that 
the concerned practices would either be insignificant compared to the numbers of businesses 
active  on  platforms  (regarding  suspensions  or  delisting),  or  due  to  practical  reasons  (non-
negotiability and unilateral changes of terms and conditions). Participating platforms rejected 
allegations of a lack of transparency in search and ranking, or discrimination issues between 
own and third party products/services. Regarding data, participants highlighted the constraints 
imposed  on  them  by  existing  data  protection  regulations.  Similarly,  existing  notice  and 
takedown obligations were perceived as a significant challenge, leading platforms to act first 
and examine the claims later. 

In conclusion, the fact-finding performed to date shows that businesses, in particular SMEs, 
encounter a variety of perceived unfair trading practices when dealing with online platforms. 
These notably include the delisting of products or suspension of accounts – often done in an 
arbitrary  manner,  without  any  prior  information.  Other  issues  revolve  around  terms  and 
conditions  (e.g.  frequent  unilateral  and  unannounced  changes,  or  a  lack  of  clarity),  limited 
access to and use of data (including portability), and biased ranking and search results, all of 

knew of existing complaint mechanisms of online platforms or third party dispute resolution schemes. Many 
respondents  to  the  Commission  public  consultation  on  platforms  also  considered  that  internal  complaint 
mechanisms set up by platforms were not effective and cost efficient to solve the problems that arise between 
online  platforms  and  their  suppliers,  cf.  Synopsis  Report  on  the  public  consultation  on  the  regulatory 
environment for platforms, online intermediaries and the collaborative, p. 10. 

92  See Flash Eurobarometer 439.on the use of online marketplaces and search engines by SMEs  

26 

 
 
                                                                                                                                                                                          
which result from the significant imbalance in bargaining power existing between platforms 
and  their  business  users.  In  addition,  there  is  concern  that  some  platforms  may  favour  own 
products or services (including their exclusive use of superior data access to outperform third-
party  business  users),  or  that  they  discriminate  between  different  third-party  suppliers  and 
sellers,  e.g.  on  their  search  facilities.  Finally,  a  horizontal  issue  underlying  all  of  the 
aforementioned  perceived  unfair  trading  practices  is  the  reported  general  lack  of  accessible 
redress  that  would  allow  business  users  to  tackle  these  issues  effectively  and  quickly  when 
they arise. 

b) Other relevant Commission initiatives touching on Platforms' Business-to-Business (B2B) 
and Business-to-Consumer (B2C) relationships 

The  Directive  on  Misleading  and  Comparative  Advertising  (MCAD)  is  currently  subject  to 
the  Fitness  Check  of  consumer  and  marketing  law  and  further  action  on  fairness  in  online 
platforms' B2B relations will be informed, inter alia, by the findings of this exercise. Also, the 
need for pre-contractual transparency requirements for online platforms in their relations with 
consumers may be considered in the report on the Consumer Rights Directive and in the wider 
Fitness Check exercise in relation to the overall functioning of consumer and marketing law, 
as  long  as  this  is  not  already  covered  by  the  UCPD  Guidance  (as  explained  in  point  2.2.6 
above). 

The ongoing REFIT Fitness Check of EU consumer and marketing law and the evaluation of 
the  Consumer  Rights  Directive  also  assess  whether  rules  need  to  be  adjusted  to  inform 
consumers with whom they conclude a contract facilitated via online platforms and based on 
which criteria the online platforms present commercial offers.  

Helping online platforms tackle illegal content 

The  vast  majority  of  the  information  and  content  mediated  by  online  platforms  is  legal, 
creates  economic  or  social  value  by  connecting  users  to  the  information  they  want  or  need, 
and forms the basis for innovation and creativity in the digital economy. 

However,  the  role  of  online  platforms  in  spreading  illegal  or  potentially  harmful  content 
continues to be at the centre of many digital policy debates. Recent concerns expressed in the 
context of spreading of fake news or  defamatory  content, have  further put  into question the 
efficacy of content governance online. Notably, the efficacy and legitimacy of the rules that 
govern  the  removal  of  content  have  been  criticised  by  some,  with  a  perception  that  content 
removal is sometimes excessive. At the same time, in other areas, feedback is that removal is 
often  slow  or  ineffective  (e.g.  in  the  context  of  illegal  hate  speech  postings),  with  illegal 
content  removed  too  slowly  or  not  at  all.  Furthermore,  after  content  is  removed  it  can  be 
uploaded again almost immediately.  

Different rules and procedures depending on the Member State, content type or platform type 
can further reduce the effectiveness of removal procedures, while cross-border effects further 
complicate  the  issue.  Some  Member  States  have  enacted  notice-and-action  procedures 
applicable  to  hosting  activities  in  their  national  legislation.  This  is  the  case  in  particular  in 
Finland93,  France94,  Hungary95,  Lithuania96,  the  United  Kingdom97,  Spain98  and  Sweden99. 

93  Act No 2002/458 on the Provision of Information Society Services (transposing the E-Commerce Directive). 
94  Law No 2004-575 of the 21 June 2004 to support confidence in the digital economy 

27 

 
 
                                                            
Furthermore,  Germany  has  recently  announced  specific  legislation  concerning  social 
networks100. Rules for content removal derive from national or EU legislation for the case of 
illegal  content,  in  particular  the  E-commerce  Directive,  which  established  a  harmonised 
framework for limitations of liability of intermediary service providers,101 complemented by 
the terms and conditions of online platforms. Safeguards against excessive removal of content 
usually fall within the discretion of the platform operators. 

Different,  and  sometimes  contradictory,  interpretations  at  national  level  of  the  regime  on 
liability exemptions in the E-commerce Directive have led to a lack of legal clarity, which can 
prevent online platforms from taking more proactive voluntary measures. In particular, these 
liability exemptions are not available to service providers which play an active role in respect 
of the illegal third party content that they transmit or host. In the public consultation on online 
platforms, some platforms expressed the fear that taking proactive voluntary measures would 
prevent them from benefiting from the liability exemption, as they could no longer be seen as 
neutral,  passive  and  technical,  and  thus  expose  them  to  legal  risks.  Although  the  Court  of 
Justice  has  already  provided  clarification  in  respect  of  some  of  the  key  concepts  of  this 
regime,  it appears that in practice several of those  concepts are still seen as  not  sufficiently 
clear (e.g. what is actual knowledge, who can be considered a host), thus creating further legal 
uncertainty102. 

Finally,  civil  rights  associations,  consumers,  fundamental  rights  experts  and  national 
authorities  complain  about  the  lack  of  public  accountability  for  the  mechanisms  by  which 
online platforms take decisions regarding removal of content. Many takedown decisions are 
taken  by  online  platforms  alone,  and  are  perceived  as  lacking  the  necessary  checks-and-
balances, such as transparency or public oversight. These procedures not only impose burdens 

95  Act  CVIII  of  2001  on  certain  aspects  of  Electronic  Commerce  and  on  Information  Society  Services 

(transposing the E-Commerce Directive) 

96  The decree of the Government of the Republic of Lithuania of 22 August 2007, No 881 on “Approving the 
procedure  on  the  removal  of  the  possibility  to  access  illegally  acquired,  created,  modified,  or  used 
information”,  which  is  based  on  the  Law  Nr.  X-614  on  information  society  services  (transposing  the  E-
Commerce Directive). 

97   The  Electronic  Commerce  (EC  Directive)  Regulations  2002  S.I.  2002/2013,  which  represents  the  national 

implementing measure in the United Kingdom. 

98  Royal Decree 1889/2011 (http://www.boe.es/diario_boe/txt.php?id=BOE-A-2011-20652) and Law 21/2014.  
99  The Swedish Act on Act on Responsibility for Electronic Bulletin Boards  
100  http://ec.europa.eu/growth/tools-databases/tris/en/search/?trisaction=search.detail&year=2017&num=127  
101  Directive 200/31/EU of the European Parliament and of the Council of 8 June 2000 on certain legal aspects 
of  information  society  services,  in  particular  electronic  commerce,  in  the  Internal  Market  ('Directive  on 
electronic commerce'), OJ L 178, 17.7.2000, p. 1–16 

102  In France, where user-generated-content platforms are concerned, after refusing to consider such operators as 
hosting service providers, courts decided to apply to them the safe harbour regime. As for search engines, the 
French courts have extended to them the safe harbour regime for hosts. In Spain, the courts also handed down 
decisions  enabling  YouTube  to  benefit  from  such  regime,  while  in  Italy  the  Court  of  cassation  described 
Google  Videos as  a  host.  The  court  of Appeal  of  Milan reversed a previous  decision  in  the  case  Yahoo v. 
RTI,  denying  the  differentiation  between  active  and  passive  service  provider,  and  in  a  recent  ruling  it 
excluded  the  application  of  Recital  42  to  hosting  services  providers;  similarly  Turin  courts  qualified 
YouTube and Dailymotion as host providers which could at most be subject to preventing re-upload of the 
removed  illegal  content.  In  Germany,  local  courts  gave  contradicting  judgments  as  regards  YouTube  and 
appeal  courts  have  found  YouTube  only  liable  as  a  host  provider  for  taking  down  and  filtering  unlawful 
content  where  the  unlawfulness  (infringement)  has  been  substantiated,  but  not  for  remuneration  of  right 
holders.  In  Poland,  the  Polish  Chamber  of  Books  sued  the  local  UGC  portal  Chomikuj.pl  to  block  certain 
content  and  to  reimburse  right  holders,  however  courts  rejected  the  case  because  of  the  safe  harbour 
principle.  

28 

 
 
                                                                                                                                                                                          
on platforms, but they also typically lack safeguards against unwarranted removal or effective 
redress mechanisms. 

The public consultation conducted in 2016 showed that the majority of respondents demanded 
either  clarification  of  existing  or  the  introduction  of  new  safe  harbours,  as  the  liability 
exemptions  of  the  E-commerce  Directive  are  known.103  The  most  commented  safe  harbour 
was that for hosting service providers (Article 14), in particular in relation to the concept of 
"passive and neutral role”.104 When asked specifically about this concept, many respondents 
complained  above  all  about  the  divergent  interpretations  at  national  level105.  Several 
respondents  supported  providing  clarification  by  means  of  soft-law  measures  such  as 
recommendations issued by the Commission. 

A  great  majority  of  respondents  (70.6  %)106  supported  a  differentiated  approach  as  regards 
notice-and-action,  without  abandoning  the  notice-and-action  system  as  such,  but  rather 
adjusting or improving the practice of action for a specific type of content; an overwhelming 
majority of respondents supported establishment of a counter-notice mechanism (82.5 %)107. 
Finally, a significant majority of respondents (76.7 %)108 demanded more transparency on the 
intermediaries'  content  restriction  policies  (e.g.  number  of  notices  received)109.  These 
percentages  echo  almost  identical  results  in  the  preceding  public  consultation  of  2012  on 
notice-and-action procedures110. 

103  52 % across all stakeholder groups; in individual groups the percentages are the following: notice providers 
(56.2 %), researchers (61.5 %), individual citizens (75.2 %), right holders (64.7 %), their associations (52.9 
%) and civil society associations (53.3 %). 

104  While  majority  of  notice  providers  and  right  holder  associations  who  provided  explanations  found  the 
concept to be unclear, majority of intermediaries and their associations found it to be sufficiently clear. From 
the respondents who discussed applicability of Recital 42, the analysis shows that majority of intermediaries 
(61.9  %),  individual  users  (90.6  %),  individual  citizens  (98.2  %),  associations  of  intermediaries  (66.7  %) 
believe that Recital 42 should not apply to hosting, while all the notice providers (100 %) and right holder 
associations (100%) who provided explanations on this point were of the opinion that it should. 

105  See 

in 

to 
http://ec.europa.eu/newsroom/dae/document.cfm?doc_id=15935  

particular 

analysis 

replies 

the 

the 

of 

the 

public 

consultation, 

p. 

19: 

106  This  percentage  represents  the  average  across  all  stakeholder  groups.  Looking  at  individual  stakeholder 
groups, there is a majority across almost all of them – intermediaries (72.4 %), content providers (59.3 %), 
individual users (62.4 %), notice providers (63 %), individual citizens (91.1 %), right holders (83.3 %), their 
associations (77.1 %), civil society associations (93.3 %) - with the exception of association of intermediaries 
(28.6 %) and researchers (41.7 %). 

107  This  percentage  represents  the  average  across  all  stakeholder  groups.  Looking  at  individual  stakeholder 
groups, there is a majority across almost all of them – intermediaries (64.4 %), content providers (87.7 %), 
individual users (87.9 %), notice providers (87.3 %), researchers (58.3 %), individual citizens (99 %), right 
holders (73.3 %), their associations (77.8 %) and civil society associations (91.7 %) – with the exception of 
associations of intermediaries (0 %) 

108  This view has obtained majority across almost all the stakeholder groups – intermediaries (72.4 %), content 
providers  (59.3  %),  individual  users  (62.4  %),  notice  providers  (63  %),  individual  citizens  (91.1  %),  right 
holders  (83.3  %),  their  associations  (77.1  %),  civil  society  associations  (93.3  %)  -  with  the  exception  of 
association of intermediaries (28.6 %) and researchers (41.7 %). 

109  Study on the role of intermediaries - Summary of the public consultation (https://ec.europa.eu/digital-single-

market/en/news/study-role-intermediaries-summary-public-consultation). 

110  The public consultation revealed broad support for EU action on notice-and-action (among all categories of 
respondents). More specifically it revealed strong support for clarification on certain notions of the ECD, for 
rules to avoid unjustified actions against legal content (in particular consultation of the content-provider and 
counter-notification by the content provider), for requirements for notices and for feedback to notifiers: 48 % 
considered that if a hosting service provider takes proactive measures it should be protected against liability 
that could result ("Samaritan clause"); 53 % affirmed that action against illegal content is often ineffective 
and  lacks  transparency;  64  %  considered  that  hosting  service  providers  often  take  action  against  legal 

29 

 
 
                                                            
 
In the context of the EU Internet Forum, the EU Internet Referral Unit set up at Europol in 
2015 has played a key role in referring terrorist material online to the companies, successfully 
referring nearly 24,000 pieces of terrorist content to over 50 platforms111. The quality of the 
referrals has received praise from the internet industry and resulted in material being removed 
in  approximately  83.3  %  of  cases  (some  companies  up  to  100  %  success  rate).  This  figure 
may fluctuate daily between 80-96 %. 

In the case of illegal hate speech, a Code of Conduct on Countering Illegal Hate Speech was 
agreed with Facebook, Twitter, YouTube and Microsoft on 31 May 2016. The Code brought 
some  important  progress,  as  it  ensures  that  the  IT  companies,  upon  receipt  of  a  valid 
notification, review such requests in a majority of cases within 24 hours and not only against 
their  rules  and  community  guidelines  but  also  where  necessary  against  national  laws 
transposing  the  Framework  Decision  2008/913/JHA112.  It  also  extended  the  trusted  flaggers 
network  across  the  EU.  The  first  evaluation  report  of  the  Code  of  conduct  on  hate  speech 
shows that on average only 28 % of all notifications of alleged illegal online hate speech as 
defined by national law implementing Framework Decision 2008/913/JHA led to the removal 
of the flagged content and 40 % of all notifications are currently reviewed under 24 hours113. 
Progress  is  expected  by  the  second  monitoring  exercise,  which  will  be  carried  out  in  26 
Member States, and whose results will be known by the end of May. 

As regards notices based on copyright infringements, Google reports that, during the last year, 
it has removed 912 million urls, 88.3 % of all urls notified. However, it also reports that 99.95 
% of all URLs processed from the Trusted Copyright Removal Program in January 2017 were 
not indexed in the first place, but generated automatically by the notice submitter114. A recent 
study115  on  the  notice-and-action  system  in  place  in  the  USA  for  copyright  infringements 
showed that nearly a third (28.4 %) of submitted notices raised questions about their validity; 
looking at Google Image takedown requests only, this percentage rose to 70 %. 

The  2017  EU  Justice  Scoreboard  will  for  the  first  time  present  data  on  the  efficiency  of 
interim  measures  on  EU  electronic  telecommunications  law  and  could  facilitate  a  deeper 
assessment  of  the  effectiveness  of  judicial  interim  measures  in  the  field  and  assist  Member 
States in improving their procedural rules.  

content; 71 % considered that hosting service providers have to consult the content providers first; for 72 % 
of  the  respondents,  different  categories  of  illegal  content  require  different  policy  approaches;  80  % 
considered that there should be rules to avoid unjustified or abusive notices; 83 % considered that the notice 
should 
content 
(http://ec.europa.eu/internal_market/consultations/2012/clean-and-open-internet/summary-of-
responses_en.pdf). 

describe 

alleged 

illegal 

nature 

the 

the 

of 

111  http://europa.eu/rapid/press-release_IP-16-4328_en.htm. 
112  Framework  Decision  2008/913/JHA  of  28 November  2008  on  combating  certain  forms  and  expressions of 

racism and xenophobia by means of criminal law. 

113   For 

further 

assessment 
http://www.google.be/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0ahUKEwj8vfqdxsbSAhVZGs
AKHXfYAhcQFggcMAA&url=http%3A%2F%2Fec.europa.eu%2Fnewsroom%2Fdocument.cfm%3Fdoc_id
%3D40573&usg=AFQjCNEL6trtMzPJWNOh316C243-bLooTg   

outcome 

data 

the 

the 

on 

of 

114  https://www.google.com/transparencyreport/removals/copyright/?hl=en#glance 

and 

https://regmedia.co.uk/2017/02/23/google-section-512.pdf . 

115  Urban, Jennifer M. and Karaganis, Joe and Schofield, Brianna L., Notice and Takedown in Everyday Practice 
(March  29,  2016).  UC  Berkeley  Public  Law  Research  Paper  No.  2755628.  Available  at  SSRN: 
https://ssrn.com/abstract=2755628 . 

30 

 
 
  
                                                                                                                                                                                          
To fill remaining evidence gaps and to assess the need for intervention, an external study116 
has been commissioned by the Commission to obtain a comprehensive picture of the existing 
legislation  and  case  law  in  the  field  of  intermediary  liability  (including  notice  and  action), 
existing  voluntary  practices  by  intermediaries  and  detailed  information  on  the  costs  and 
effectiveness  of  notice  and  action  and  voluntary  measures,  as  well  as  the  cost  of  legal 
fragmentation. The first results will be reported in mid-2017. Several workshops on different 
topics, like the impact of voluntary measures on fundamental rights or the difficulties faced by 
national judges when applying the E-commerce Directive, will also be conducted.  

3.2.  Developing the European Data Economy 

Policy Context 

The value of the EU data economy was more than EUR 285 billion in 2015, representing over 
1.94 % of the EU GDP.117 Due to a year-on-year growth rate of 5.03 %, this value increased 
to EUR 300 billion representing 1.99 % of the GDP in 2016. The same estimate predicts that 
in  the  event  of  Europe's  economy  entering  a  higher  growth  path  in  the  next  years 
characterised  by  a  stronger  driving  role  of  digital  innovation  and  higher  overall  ICT 
investments as a share of GDP while the policy and legislative framework conditions around 
the data economy are put in place in time, the value of the data economy will increase to EUR 
739  billion  by  2020  representing  4  %  of  the  overall  EU  GDP.  The  EU  data  economy 
employed  around  6  million  data  professionals  in  2015  and  6.16 million  in  2016  which 
indicates a 2.6 % year-on-year growth rate. By 2020, it is estimated under the same growth 
scenario  that  the  number  of  data  professionals  will  increase  to  10.43  million,  with  a 
compound  average  growth  rate  of  4.2  %  if  the  policy  and  legislative  framework  conditions 
around  the  EU  data  economy  are  put  right.  Data  companies  are  expected  to  grow  at  a 
compound annual growth rate (CAGR) of 4.5 % in the period 2015-2020 increasing to a total 
of 310,000 units in 2020. As far as data user companies are concerned, a moderate growth is 
expected in their number over the period 2015-2020 with a CAGR of 2.2 % increasing to a 
total of 724,900 units in 2020.118 

However,  regulation  by  local  and  national  authorities  can  lead  to  market  fragmentation  and 
reduces  possibilities  for  economies  of  scale  and  scope  for  cloud  computing,  data-driven 
services, science and the Internet of Things. Nevertheless, such measures are sometimes based 
on  the  protection  of  legitimate  interests.  However,  recent  technological  developments  are 
making  some  of  these  interventions  disproportionate  with  respect  to  their  public  policy 
objectives,  resulting  in  inefficient  outcomes.  To  prevent  this,  a  series  of  technical  and 
legislative  barriers  may  need  to  be  addressed.  In  particular,  some  types  of  data  localisation 
restrictions  hampering  a  wider  adoption  of  cloud  and  other  data  services  should  be 
scrutinised. 

What has been delivered?  

Building a European Data Economy Communication 

116  SMART 2016/0039. 
117  European Data Market study, SMART 2013/0063, IDC, 2016, http://www.datalandscape.eu/study-reports  
June  2016 
118  European  Data  Market 

(SMART  2013/0063),  Second 

Interim  Report, 

study 

http://www.datalandscape.eu/study-reports  

- 

31 

 
 
                                                            
The  Communication  on  Building  a  European  data  economy119  was  adopted  in  January 
2017,  accompanied  by  available  evidence.120  It  addressed  a  series  of  issues  that  were 
mentioned in the Digital Single Market Strategy as essential for innovation in a data economy 
based on big data, cloud services and the Internet of Things (industry 4.0). It also outlines a 
number of options for policy intervention, which are being assessed by the Commission based 
on  the  input  of  stakeholders  through  the  online  public  consultation121  conducted  from  10 
January till 26 April 2017 and through structured dialogues with Member States.  

New developments and challenges  

a)  Free flow of data - by removing unjustified localisation restrictions 

The evidence collected so far122, points to a growing number of unjustified or disproportionate 
national  measures  that  require  businesses  or  public  administrations  to  store  and/or  process 
data locally within a Member State. For example, measures requiring the localisation of tax, 
accounting and company data could both create unjustified burdens for entities generating or 
otherwise processing or providing services in respect of such data and inhibit the growth of 
innovative  data  services  in  this  field.  However,  some  restrictions  could  potentially  also  be 
justified. 

The  General  Data  Protection  Regulation  (GDPR)  already  ensures  the  free  movement  of 
personal data in the scope of its application. In relation to data which is outside the scope of 
the  GDPR,  the  Communication  urges  Member  States  to  be  guided  by  a  "principle  of  free 
movement of data within the EU" as a corollary of their obligations under the free movement 
of  services  and  the  free  establishment  provisions  of  the  Treaty.  It  also  announced  the 
Commission's  intention  to  take  appropriate  measures  on  the  free  flow  of  data,  including, 
where  necessary,  the  launch  of  infringement  proceedings  to  address  unjustified  or 
disproportionate data localisation measures, in line with Better Regulation principles, and, if 
necessary, further measures on the free flow of data.  

The  December  2016  European  Council  Conclusions  called  for  the  removal  of  remaining 
obstacles within the Single Market, including those hampering the free flow of data. In a letter 
of  13  December  2016  to  President  Tusk  from  the  Heads  of  State  or  Government  of  16 
Member  States123  an  early  legislative  proposal  providing  for  the  free  flow  of  data  is 
considered crucial to avoid market fragmentation and further obstacles to the development of 
the data economy in the EU.  

b)  Emerging issues 

The  above-mentioned  Communication  presents  possible  ways  forward  with  regard  to  issues 
that are currently typically governed by contracts rather than covered by existing regulation: 
a)  access  to  and  re-use  of  commercially-held  non-personal  or  anonymised  data,  without 
stifling innovation; b) addressing the extra-contractual liability challenges, including in terms 
of safety, for damage caused by products and services that are connected through the Internet 
of  Things  or  operate  as  autonomous  systems.  The  latter  issues  are  mainly  linked  to  the 

119  COM(2017) 9  
120 SWD(2017) 2 
121  https://ec.europa.eu/digital-single-market/en/news/public-consultation-building-european-data-economy  
122  SWD (2017) 2 
123  Belgium,  Bulgaria,  Czech  Republic,  Denmark,  Estonia,  Ireland,  Latvia,  Lithuania,  Luxembourg,  Malta, 

Netherlands, Poland, Portugal, Slovenia, Sweden and the United Kingdom. 

32 

 
 
                                                            
difficulties of applying concepts as "defect" or "product" in a context of increasing interaction 
between  autonomous  devices  and  humans  and  of  products  being  bundled  with  services  that 
dramatically increase their utility and value; c) possible introduction of a portability right for 
non-personal  data124.  An  experiment  and  test  trial  on  cooperative,  connected  and  automated 
mobility is proposed  in order  to test  the suitability of possible solutions for data access  and 
liability. 

c)  Complementarity with general personal data protection rules 

The  approach  proposed  by  the  Communication  is  complementary  to  the  General  Data 
Protection Regulation, which bans restrictions to the free movement of personal data within 
the EU where these are based on reasons connected with the protection of personal data. The 
Commission  is  working  with  Member  States  and  national  data  protection  authorities  within 
the framework of the Article 29 Working Party to ensure effective and uniform application of 
the new legislation at national level.  

The  confidential  transmission  of  both  personal  and  non-personal  data  via  public  electronic 
communication networks is covered by the current ePrivacy Directive (to be replaced by the 
current proposal for ePrivacy Regulation).  

Restrictions based on reasons other than the protection of personal data, e.g. under taxation or 
accounting  laws,  are  not  covered  by  the  General  Data  Protection  Regulation  and  could  be 
covered by the free movement of data principle proposed in the Communication. Moreover, 
the  GDPR  regulates  only  the  processing  of  personal  data,  which  means  any  information 
relating  to  an  identified  or  identifiable  person.  Therefore,  under  the  "emerging  issues",  the 
scope of any further action is on non-personal or anonymised data, e.g. machine-generated or 
industrial data.  

d)  Cloud market and governance in the EU 

The  Cloud-Select  Industry  Group  (C-SIG)125  established  in  2013  to  allow  stakeholders  to 
collaborate on the implementation of the actions set out in the 2012 European Cloud Strategy, 
has  prepared  and  presented  a  Data  Protection  Code  of  Conduct  for  cloud  service  providers 
relating  to  the  processing  of  personal  data,  to  a  newly  established  stakeholder  General 
Assembly. The Code is not yet fully compliant with the GDPR and it has not been approved 
by the Article 29 Working Party under the current Data Protection Directive 96/46/EC. The 
"C-SIG Code" has also been used as a model for a more specific code of conduct for cloud 
infrastructure  providers  (CISPE).  This  is  at  a  similar  stage  of  development  and  has  not  yet 
been  approved  under  EU  data  protection  legislation.  The  Commission  will  continue 
supporting the development of such initiatives and encourages the submission of the resulting 
codes for approval according to the procedures provided by the data protection legislation. 

Building  on  the  expert  group  on  cloud  computing  contracts  which  looked  into  the  issue  of 
contract terms and conditions for B2C and B2B cloud computing services, in December 2015 
the Commission tabled a proposal for a Directive on certain aspects concerning B2C contracts 
for the supply of digital content126 which provides for harmonised consumer protection rules 
against defective cloud services and lock-in. Following up on the work of the expert group, 

124  The right to portability of personal data is regulated in Article 20 of the General Data Protection Regulation 

(GDPR). 

125  https://ec.europa.eu/digital-single-market/en/cloud-computing-strategy-working-groups  
126  COM(2015)634. 

33 

 
 
                                                            
further evidence gathering is being launched to identify whether further action is warranted on 
B2B to protect (certain) business users of cloud computing services contracts.  

These  actions  are  expected  to  contribute  to  fostering  a  trustworthy  single  market  for  cloud 
services. 

e)  Improving re-use of data collected by public sector bodies 

Public sector bodies collect valuable data as a result of the execution of their public tasks.  

The Commission is striving to ensure the re-usability of such data through the provisions of 
Directive 2003/98/EC (as amended by Directive 2013/37/EU) on Public Sector Information. 
This Directive shall be reviewed before 18 July 2018. The upcoming evaluation of Directive 
96/9/EC on the legal protection of databases will also look into the issue of re-use of such data 
from a database protection point of view. The Commission makes data it holds itself re-usable 
under the provisions of Regulation (EC) 1049/2001 and Decision 2011/833/EU. It funds web 
portals  facilitating  the  findability  of  public  sector  information  such  as  the  European  Open 
Data Portal.  

Researchers  undertaking  actions  funded  on  the  basis  of  public  grants  (either  from  the  EU's 
framework programmes or from national R&D&I programmes) also produce valuable data as 
a result of their research actions. The Commission therefore mandates recipients of EU grants 
to apply an Open Access policy to such data unless legitimate grounds justify an 'opt out'. It 
recommends Member States to do the same. The implementation of this policy is subject of a 
review.  

f)  Sharing, access and use of spatial data in Government to Government and Government to 

Business context 

Following  the  REFIT  evaluation127  of  the  INSPIRE  2007/2/EC  Directive,  the  Commission 
and  Member  States  agreed  on  a  2016-2020  work  programme128  aimed  at  closing 
implementation gaps and improving the fitness-for-purpose of the INSPIRE measures in view 
of greater synergies with the actions under the Digital Single Market. 

This has led to the increased availability online129 and use of spatial data in a wide range of 
applications and economic sectors. Through the work programme further legal and technical 
obstacles to the sharing and re-use will be addressed in full coherence with the principles of 
the European Interoperability Framework and the Directive 2003/98/EC. 

127  Report published as COM(2016)478 and SWD(2016)273 
128  INSPIRE Maintenance and Implementation Work Programme 2016-2020  
129  INSPIRE official monitoring dashboards 

34 

 
 
 
                                                            
Source: INSPIRE official monitoring dashboards, May 2016. 

g)  Data for smart cities and communities  

There  are  several  initiatives  at  EU  level  for  Smart  Cities  such  as  the  European  Innovation 
Partnership  on  Smart  Cities  and  Communities,  the  European  Energy  Research  Alliance 
(EERA)130,  the  Joint  Programme  on  Smart  Cities131,  the  ERA-NET  on  Smart  Cities  and the 
Joint  Programming  Initiative  Urban  Europe132.  The  Commission  is  gathering  information 
from  the  monitoring  of  these  projects  and  platforms  in  the  EU  Smart  Cities  Information 
System133. 

In particular, the European Innovation Partnership on Smart Cities and Communities aims to 
bring  together  100  cities  and  100  firms  in  areas  like  electro-mobility  and  mobility  services, 
intelligent  lighting  or  building  blocks  with  positive  energy  balance.  The  partners  work  in  a 
"Market Place", a platform to develop and replicate solutions.134  

The  Commission  also  contributes  actively  to  the  EU  Urban  Agenda  improving  legislation, 
funding instruments and knowledge on urban priorities. Three of these priorities are linked to 
smart cities and communities: digital transition, energy transition and urban mobility. 

In Finland the project Open Data of the Six Cities (EUR 1.3 million) establishes cooperation 
models with companies and other developers as well as launches actions for developing and 
facilitating  data-based  business  in  the  six  biggest  cities  of  the  country.  Other  successfully 
implemented projects in this area include the JIC Innovation Park: A catalyst for innovation 
and growth in South Moravia in the Czech Republic and the project Apulian ICT Living Lab 
aimed at boosting digital innovation in southern Italy. 

h)  Agriculture and food data  

130  EERA  -  European  Energy  Research  Alliance  is  the  public  research  pillar  of  the  EU  Strategic  Energy 

Technology Plan (SET-Plan). 

131  These two platforms are in the context of the Strategic Energy Technologies - SET Plan. 
132  These two platforms are in the context of the European Research Area. 
133  http://smartcities-infosystem.eu/concerto/concerto-tmd-database  
134  https://eu-smartcities.eu/  

35 

 
 
 
 
 
 
                                                            
While  the  implementation  of  precision  farming  and  smart  manufacturing  technologies  is 
already  a  reality,  a  comprehensive  digital  ecosystem135  integrating  existing  technologies  is 
still  needed  to  gather  all  the  relevant  individual  data  which  are  needed  for  the  monitoring, 
control  and  treatment  on  farms  and  along  the  food  chain  in  a  particular  region.  Such  future 
data  management  and  exchange  scenario  would  allow  monitoring  and  control  of  plant  and 
animal products during the whole life cycle 'from farm to fork' including nutrition. It should 
also  help  farmers'  and  processors'  decision  making  with  regard  to  the  use  of  inputs  and 
management  processes  e.g.  pesticide  control,  nutrient  and  water  management,  lowering 
ecological footprints and economic costs as well as increasing food security, as well as enable 
consumers to access trustworthy information about the traceability of products.  

There is a broad range of existing and conceptual data sharing models in agriculture and food 
but here is no consensus or uniform approach yet on which type of data governance models 
are the most suitable to protect and satisfy the interests of the different parties involved in the 
agri-food  chain.  Especially  relevant  is  the  role  of  the  farmers  in  this  new  data  governance 
scenario.  There  is  no  consensus  on  which  should  be  the  most  promising  data  governance 
model  for  the  benefit  of  farmers  (better  position  in  the  market,  increase  their  production 
performance etc). Generally speaking there is demand for more openness. However, there is 
also  a  concern  that  the  use  of  big  data  by  market  dominant  players  in  the  sector  will 
exacerbate existing market power imbalances (concentrated upstream and downstream sector 
in  relation  to  a  fragmented  mass  of  farmers  and  food  SMEs).  Clear  models  to  share 
digitisation  benefits  are  needed.  Interoperability  and  proven  business  models  combining 
different  data  sources  are  paving  the  road  for  data-based  innovation  in  agriculture. 
Nevertheless, a part of the agricultural and food community is asking for more security and 
rights on data.  

Crop monitoring with aerial robots can reduce the use of pesticides by about 75 %, by better 
targeting the areas to be treated136. 

3.3. 

Fostering  a  trustworthy  cyber  ecosystem:  Tackling  cybersecurity  challenges 
together  

Policy Context  

Cyber  threats  are  a  borderless  problem  and  have  a  negative  impact  on  EU  economy,  on 
citizens'  fundamental  rights  and  on  society.  The  growing  number  of  offences  (for  instance 
data  interception,  online  payment  fraud,  identity  theft,  trade  secrets  theft)  is  leading  to 
significant  economic  losses.  They  often  result  in  disruption  of  services,  fundamental  rights 
violations  and  undermine  citizens'  trust  in  online  activities.  For  example,  more  than  4,000 
ransomware attacks have occurred every day since the beginning of 2016 (a 300 % increase 

135  A digital ecosystem in smart farming needs to be developed in order to ensure that the sector can take fully 
advantage of the use of data gathered from different sources (sensors, tractors, satellites etc). The ecosystem 
needs to be developed at different levels: (1) ensuring connectivity infrastructure: fully broadband coverage 
is  needed  to  fully  deploy  the  most  disruptive  technologies  (e.g.  IoT);  (2)  innovation:  supporting  start-ups, 
SMEs  and  entrepreneurs  and  the  involvement  of  farmers  and  cooperatives  in  the  innovation  process  is 
required to ensure the adoption of technologies by the farming sector; (3) interoperability and data standards 
are  required  to  ensure  integration  between  different  technologies  allowing  the  development  of  data 
management systems.  

136  Finding of EU funded research project RHEA, http://cordis.europa.eu/result/rcn/89889_en.html  

36 

 
 
                                                            
over 2015).137 In the case of hybrid threats, cyber-attacks can be used in a coordinated manner 
with other activities to destabilise a country or challenge political institutions.  

Member States and EU institutions have long acknowledged the need to protect our networks 
and critical infrastructure and to respond effectively to cyber-threats, leading to the adoption 
of  the  2013  European  Cybersecurity  Strategy.  In  2016  the Directive  on  Security 
of Network and Information Systems (NIS Directive) was adopted138 and in the meantime 
many  Member  States  started  developing  national  cybersecurity  strategies  to  address  the 
growing  challenge.  An  important  body  assisting  Member  States  and  the  Commission  is  the 
European  Union  Network  and  Information  Security  Agency  (ENISA),  which  is  undergoing 
evaluation at the moment.  
One  of  the  key  priorities  of  the  European  Cybersecurity  Strategy  was  to  develop  industrial 
and  technological  resources  for  cybersecurity.  For  the  period  2014-2016,  the  EU  has  so  far 
invested EUR 160 million under H2020 in cybersecurity research and innovation projects. 

EU investments in cybersecurity: 

MUSES - EU-funded researchers have developed and tested a new corporate cyber security 
system – designed to fit with current trends of working on multiple devices – and identified a 
simple way of making corporate cyber space safer and more secure. The MUSES consortium 
ran  a  number  of  field  trials  and  found  that  the  introduction  of  MUSES'  usable  corporate 
security led to a decrease in incidents due to improved user behaviour.  

EVIDENCE  (European  Informatics  Data  Exchange  Framework  for  Courts  and  Evidence): 
The project proposes standardized solutions to maintain and prove the integrity of the digital 
evidence to enable policy makers to realize an efficient regulation, treatment and exchange of 
digital evidence; and law enforcement agencies as well as judges/magistrates, prosecutors and 
lawyers  practising in  the  criminal  field  to  share a Common European Framework to  gather, 
use and exchange digital evidences according to common standards and rules.  

However,  at  the  time  of  announcing  the  Digital  Single  Market  Strategy  specific  gaps  were 
identified in the fast moving area of technologies and solutions for online network security. A 
more joined-up approach was needed to step up the supply of improved secure solutions by 
EU industry and to stimulate their take-up by enterprises, public authorities, and citizens. In 
addition,  the  lack  of  interoperable  solutions  (technical  specifications),  practices  (process 
specifications)  and  EU-wide  mechanisms  of  certification  was  identified  as  one  of  the  gaps 
affecting the single market in cybersecurity. 

In March 2017 the Scientific Advice Mechanism High Level Group published an Opinion139 
on Cybersecurity recommending to support the development of evidence collection methods, 
including sharing of evidence and best practices of cybersecurity-related information between 
EU Member States; to improve the mutual trust between national entities (e.g. CERTs) so that 
intelligence  information  can  be  more  freely  disseminated  between  stakeholders;  to  develop 
and  monitor  cybersecurity  standards  and  practices,  and  to  provide  sufficient  authority  and 
resources to do so, including adequate technical expertise in European bodies. 

137  https://www.justice.gov/criminal-ccips/file/872771/download 
138  Directive  (EU)  2016/1148  of  the  European  Parliament  and  of  the  Council  of  6  July  2016  concerning 

measures for a high common level of security of network and information systems across the Union 

139  https://ec.europa.eu/research/sam/pdf/sam_cybersecurity_report.pdf#view=fit&pagemode=none  

37 

 
 
 
  
 
 
                                                            
What has been delivered?  

A Communication on Strengthening Europe's Cyber Resilience System and Fostering a 
Competitive  and  Innovative  Cybersecurity  Industry  -  In  July  2016,  the  Commission, 
building  on  the  Digital  Single  Market  Strategy  commitment  and  on  one  of  the  22  actions 
under  the  Joint  Framework  on  countering  hybrid  threats,  adopted  a  Communication  on 
Strengthening Europe's Cyber Resilience System and Fostering a Competitive and Innovative 
Cybersecurity Industry140. This Communication encourages Member States to make the most 
of the cooperation mechanisms under the NIS Directive and to improve the way in which they 
work  together  to  prepare  for  a  large-scale  cyber-incident.  It  also  outlines  a  number  of 
measures to support the emerging single market for cybersecurity products and services in the 
EU. Some of the key initiatives under the Communication include: 

A  contractual  public-private  partnership  (cPPP)  with  industry  -  The  Commission  and 
representatives  of  the  stakeholder  association,  the  European  Cyber  Security  Organisation 
(ECSO), signed the contractual arrangement underpinning the cPPP on 5 July 2016. Between 
2017  and  2020  the  EU  will  invest  up  to  EUR  450  million  in  this  partnership,  under  its 
research  and  innovation  programme.141  Cybersecurity  market  players  are  expected  to  invest 
three  times  more,  bringing  the  total  investment  value  to  EUR  1.8  billion.  At  the  moment 
ECSO gathers more than 180 organisations including big and small companies, associations, 
public and regional authorities having a stake in cybersecurity.  

Certification - The Commission, in cooperation with the Joint Research Center (JRC) and the 
European  Union  Agency  for  Network  and  Information  Security  (ENISA),  organized  two 
workshops with representatives of Member States to define the scope of a possible initiative 
in the field of certification of ICT products and solutions. In cooperation with the Alliance for 
Internet of Things Innovation (AIOTI), the Commission also organized three workshops with 
representatives of the industry on increasing trust in the Internet of Things and the minimum 
requirements  for  security  and  privacy  in  the  Internet  of  Things.  As  a  part  of  the  evidence 
gathering exercise a study has been launched. In the course of 2017, several workshops will 
be organised with a specific aim to facilitate dialogue between experts from MSs and private 
sector, both from the ICT suppliers, integrators and users industry.  
ENISA's review - In 2016, the Commission started the review of the ENISA Regulation142 by 
presenting the initial roadmap for evaluation143 and launching a public consultation between 
18  January  2017  and  12  April  2017144.  The  evaluation is  currently  ongoing,  supported  by  a 
study launched in November 2016, and it is expected to be completed in the second half of 
2017.  

Cybersecurity  in  key  sectors  -  In  December  2015  the  Commission  launched  an  Expert 
Group (Energy Expert Cyber Security Platform-EECSP) to analyse the energy sector specific 
needs  in  terms  of  cybersecurity  and  to  reinforce  the  implementation  of  the  Directive 
concerning measures for a high common level of security of network and information systems 

140  COM(2016) 410 final 
141  https://ec.europa.eu/programmes/horizon2020/en/h2020-section/secure-societies-%E2%80%93-protecting-

freedom-and-security-europe-and-its-citizens. 
142  Regulation (EU) 526/2013, OJ L 165, 18.6.2013 
143  http://ec.europa.eu/smart-regulation/roadmaps/docs/2017_cnect_002_evaluation_enisa_en.pdf  
144  https://ec.europa.eu/digital-single-market/en/news/commission-launches-public-consultation-review-

european-union-agency-network-and-information 

38 

 
 
 
 
                                                            
across  the  Union145  at  energy  sector  level.  In  addition  the  Commission  will  also  establish 
stakeholder working groups under the Smart Grids Task Force to further elaborate a technical 
framework  on  energy-specific  cybersecurity  and  common  consumer's  data  format.146  The 
structure, scope and planning of the groups will be ready by spring 2017 and final results by 
the end of 2018.  

In aviation, the European Centre for Cyber Security in Aviation (ECCSA) was set up in 2016 
to  support  the  common  effort  of  building  increased  resilience  and  responsiveness  to  cyber 
risks in the sector. 

The  EU  funded  the  Smart  Grid  Protection  against  Cyber  Attacks  (SPARKS)  project  whose 
focus was to develop a range of solutions that can be used to mitigate threats to the electric 
smart  grid.  The  project  developed  approaches  to  risk  assessment,  including  processes  and 
tools,  which  can  be  used  to  evaluate  how  severe  the  risk  is  from  emerging  threats  that  can 
cause operational consequences, such as blackouts. The project developed guidance for smart 
grid stakeholders regarding how to develop a secure architecture for the smart grid, leveraging 
standards from international bodies. The project also developed an intrusion detection system, 
which  can  detect  malicious  behaviour  that is  observable in  the  supervisory  control and  data 
acquisition communication protocols used in the smart grid, and a security analytics platform 
that makes use of operational data, collected from smart meters, to identify when a smart grid 
is behaving anomalously – such behaviour could indicate an attack. 

New developments and challenges  

As outlined in the previous section, in recent years, the EU has made significant progress in 
cybersecurity:  in  2016  alone,  the  first  EU-wide  legislation  on  this  matter,  the  Directive 
concerning measures for a high common level of security of network and information systems 
across the Union, was adopted. The European Commission is working closely with Member 
States to ensure a timely and effective transposition and implementation that should also lead 
to more cooperation between Member States.  

 A EUR 1.8 billion public private partnership on cybersecurity was launched. The seeds for 
stepping-up cooperation and nurture the cybersecurity market have been planted and measures 
to fight hybrid threats announced. 

However, the threat landscape has evolved exponentially. 50 % of businesses in the EU have 
suffered a cyber-attack and the projected growth of cybercrime is now higher than the one of 
the  internet.  85  %  of  internet  users  in  the  EU  agree  that  the  risk  of  becoming  a  victim  of 
cybercrime  is  increasing.147  If  the  EU  fails  to  respond  to  cybersecurity  challenges,  it  could 
sacrifice up to EUR 640 billion of potential EU economic value.148 New threats include new 
actors and motives for cyber-attacks, including political motivation and cyber-terrorism. The 
misuse of the Internet of Things by the evolving cybercrime business models operating on a 
much  larger  scale  are  causing  considerable  financial  damage  and  could  lead  to  people's 
mistrust  in  using  ICT.  There  is  also  a  need  for  more  targeted  awareness-raising  on  cyber-

145  Directive  (EU)  2016/1148  of  the  European  Parliament  and  of  the  Council  of  6  July  2016  concerning 
measures for a high common level of security of network and information systems across the Union, OJ L 
194, 19.7.2016, p. 1–30  

146  COM (2016)860 
147  European Commission, Special Eurobarometer 423, 'Cybersecurity', 2015  
148  ENISA's role in the European Digital Single Market, December 2016 

39 

 
 
 
                                                            
hygiene  and  strong  work  on  cyber  skills  to  make  sure  that  the  SMEs,  who  are  important 
targets of cybercrime can better protect themselves. 

The number of incidents is growing constantly and criminals increasingly see cyberspace as a 
new and profitable field of activity. In the last two months of 2016, a number of major attacks 
were widely reported (e.g. as the Dyn, ThyssenKrupp and Deutsche Telekom attack infecting 
nearly 1 million routers used to access DT internet service).  

According to a study149, at least 80 % of European companies have experienced at least one 
cybersecurity  incident  over  the  last  year  and  the  number  of  security  incidents  across  all 
industries worldwide rose by 38 % in 2015. This damages European companies, whether they 
are big or small, and threatens to undermine trust in the digital economy.  

The  media  also  widely  reports  unlawful  intervention  in  functioning  of  the  democratic 
processes and institutions that are also proliferating (e.g. Italian case of cyber spying, recent 
cyber-attacks on European institutions).  

Having digital solutions in every field of social and economic life due to the ever increasing 
uptake of connected smart objects presents opportunities but also makes modern society even 
more vulnerable to cybersecurity threats than ever before.  

Cyber-security incidents can spread through connected devices from TV digital boxes, smart 
phones,  apps  to  fridges  or  baby  phones.  In  this  context,  ensuring  an  appropriate  level  of 
security,  or  'security  by  design',  in  such  devices  is  essential.  The  EU  requires  an  integrated 
approach  between  industry,  research  and  other  actors,  in  order  to  develop  the  necessary 
technologies  and  good  practices  for  minimising  the  cybersecurity  threats.  This  creates  the 
need for a more comprehensive approach.  

According  to  a  recent  Eurobarometer  survey150,  the  majority  of  Europeans  consider  that 
security and privacy features of the product play a role in the purchase of an IT product such 
as a computer or a smart phone. In this context, certification and standardisation become a key 
issue.  Currently  various  ICT  security  certification  schemes  for  ICT  products  (e.g.  software, 
operating  systems)  are  either  effective  only  in  a  few  Member  States  or  have  limited 
membership.  This  could  lead  to  a  situation  in  which  multiple  national  ICT  security 
certification  schemes  –  not  mutually  recognized  –  continue  to  surface  and  will  become 
mandatory through future legislation.  

4. 

MANAGING THE DIGITAL TRANSFORMATION OF OUR SOCIETY AND ECONOMY 

Digitisation has been changing Europe's societies and economies for the last twenty years, and 
this  evolution  is  gaining  in  speed.  The  pace,  scale,  scope,  and  impact  of  digital  innovations 
have  the  potential  to  cause  a  further  transformation  of  the  current  social  and  economic 
systems.  Artificial  intelligence,  advanced  robotics,  cloud  computing,  innovative  digital 
platforms,  distributed  technologies  and  new  financial  technologies  are  some  of  the  key 
technologies  underpinning  major  economic  and  social  transformation.  These  developments 
are overwhelmingly positive, improving living standards, life expectancy and quality of life. 
Nevertheless,  the  changes,  and  the  rapidity  of  those  changes,  in  particular  their  impact  on 
labour markets, can disrupt the lives of people. 

149  http://www.pwc.com/gx/en/issues/cyber-security/information-security-survey.html  
150  Special  Eurobarometer  460  on  "attitude  towards  the  impact  of  digitisation  and  automation  on  daily  life" 

(2017) 

40 

 
 
 
                                                            
Digitisation impacts labour markets in many ways. The most obvious one is that it increases 
demand  for  certain  jobs  while  reducing  demand  for  others.  Jobs  are  created  in  the  new 
technologies themselves. For example, in 2015, the EU counted nearly 8 million Information 
and Communication Technology (ICT) specialists, representing 3.5 % of total employment.151 
1.5  million  of  these  jobs  have  been  added  since  2011,  in  such  new  markets  as  the  app 
economy, which now employs hundreds of thousands of app developers. In addition, digital 
also sparks the creation of new jobs in sectors that are themselves not digital.  

Digitisation can also have a profound effect on the organisation of work. It allows cooperation 
over longer distances, enabling globalisation and mobility of workers; by reducing transaction 
costs,  it  encourages  work  outside  established  structures,  leading  to  the  boom  of  platform-
based work; by providing new technological solutions, it enables the emergence of innovative 
workplaces.  Despite  a  pick-up  in  research  in  this  area  in  the  last  few  years,  the  complex 
interactions between digital transformation and labour markets are not yet fully understood.  

As an indication of the efficacy of our joint efforts, the annual Digital Economy and Society 
Index  (DESI)152  allows  the  EU  and  Member  States  to  monitor  digital  progress  and  identify 
areas  for  priority  investment  and  action.  The  2017  Europe's  Digital  Progress  Report 
(EDPR)153 includes country profiles combining the quantitative evidence from the DESI with 
country-specific  policy  insights.  These  reports  show  the  progress  made  at  both  EU  and 
Member  State  level.  At  the  same  time,  there  still  is  a  significant  gap  between  top  digital 
players  and  lower-performing  countries.  Connectivity,  human  capital,  use  of  digital 
technologies by businesses, and citizens' access to public services online have all improved, 
but progress is slow. 

4.1. 

Digital skills and opportunities for all 

Policy context  

Already  90  %  of  all  jobs  require  at  least  a  minimum  level  of  digital  skills,  and  demand  is 
growing for IT professionals, digitally highly skilled workers and business leaders.  

The number of internet users has been steadily increasing in recent years (79 % in 2016). At 
the same time, on average across Europe,  44 %  of citizens and 37 % of those in the labour 
force still do not have basic digital skills. While employment of ICT specialists in the EU has 
grown by over 2 million in the last decade, the supply of new graduates and career changers 
has  not  kept  pace.  In  2015,  4  in  10  companies  in  the  EU  trying  to  recruit  ICT  specialists 
reported difficulties in filling vacancies154.   

Education and training systems, while having made progress, in many countries are not fully 
adapted  to  meet  the  requirements  and  make  best  use  of  the  digital  evolution.  According  to 
forecasts, those today in initial training are likely to change careers several times during 
their  lifetime  and  thus  need  continuing  training.  In  an  increasingly  dynamic  living  and 
working  environment  the  people  with  initiative  and  the  right  set  of  skills  stand  to  gain  the 
most.  However,  work-based  access  to  training  remains  highly  dependent  on  the  type  of 

151  Eurostat press release 25 October 2016  
152  https://ec.europa.eu/digital-single-market/desi  
153  European Digital Progress Report (EDPR) 2017, SWD (2017) 160. 
154  Eurostat, 

specialists 

statistics 

ICT 

on 

- 

hard-to-fill 

vacancies 

in 

enterprises 

http://ec.europa.eu/eurostat/statistics-explained/index.php/ICT_specialists_-_statistics_on_hard-to-
fill_vacancies_in_enterprises  

41 

 
 
                                                            
contract: almost one in two employees on permanent contracts receives training compared to 
32 % of employees with fixed contracts and 19 % of self-employed155. The responsibility for 
curricula and the organisation of education and training lies with the Member States.  

What has been delivered?  

The New Skills Agenda for Europe 

The New Skills Agenda for Europe156, adopted on 10 June 2016, addresses digital skills at all 
levels of education and training. The following parts are relevant for digital skills: 

1) The  Digital  Skills  and  Jobs  Coalition,  launched  on  1  December  2016,  is  a  multi-
stakeholder collaboration, following on from the Grand Coalition for Digital Jobs (2013-
2016). It aims to develop a large digital talent pool and ensure citizens are equipped with 
adequate  digital  skills.  By  2020,  the  Coalition  aims  to  have  trained  1  million  young 
unemployed  people  for  vacant  digital  jobs  via  traineeships,  apprenticeships  and  other 
training programmes. 

The  Coalition  calls  on  Member  States  to  have  comprehensive  digital  skills  strategies  in 
place  by  mid-2017  and  to  set  up  national  digital  skills  coalitions  among  education, 
employment and industry stakeholders to help implement them.  

Around 60 organisations have already pledged to undertake new actions. The link between 
skills and digital innovation hubs will be addressed in the Horizon 2020 work programme 
2018-2020. 

Organisations  that  are  members  of  the  Digital  Skills  and  Jobs  Coalition  and  active  in 
Horizon  2020,  the  EU's  research  and  innovation  programme,  or  Erasmus+  will  be  well 
placed  to  make  use  of  a  new  "Digital  Opportunity"  scheme,  aiming  at  giving  graduate 
students  hands-on  experience  in  the  digital  domain.  This  pilot  project  will  be  based  on 
cross-border internships in the digital domain available to students of all disciplines. 

2) The  Council  adopted  a  Recommendation  on  Upskilling  Pathways.157  It  will  help  low-
skilled adults to acquire a minimum level of basic skills such as reading, writing and maths 
and  including  digital  skills,  with  the  possibility  of  progressing  their  learning  towards  a 
qualification.  The  Recommendation  calls  on  Member  States  to  develop  "a  pathway  that 
would improve support for adults with low skills and qualifications". The pathway consists 
of  

  a skills assessment, to identify existing skills and upskilling needs;  

  a learning offer based on that assessment; and  

  opportunities to ensure the new skills acquired are validated and recognised. 

155  EPSC  Strategic  Note  #13  'The  Future  of  Work  -  Skills  and  Resilience  for  a  World  of  Change' 

http://ec.europa.eu/epsc/publications/strategic-notes/future-work_en 

156  COM(2016) 381 final 
157  Council  Recommendation  of  19  December  2016  (C  484/1,  24.12.2016),  http://eur-lex.europa.eu/legal-

content/EN/TXT/?uri=OJ:JOC_2016_484_R_0001  

42 

 
 
                                                            
2) These  three  steps  will  be  accompanied  by  outreach  and  support  measures  such  as 
awareness raising of the benefits of upskilling and opportunities available, and incentives 
for  those  least  motivated  to  take  advantage  of  these.  By  mid-2018,  Member  States  are 
requested to outline appropriate measures for the implementation of this recommendation 
at national level, including which groups of low-skilled adults should be given priority.  

3) In  2014-2016  the  Commission's  Erasmus+  programme  has  supported  more  than  1  400 
projects on the effective use or teaching of digital technologies, which reached more than 8 
000 beneficiary organisations in the education and training field. In 2017, the Commission 
will continue these efforts and specifically support the use of European Social Funds (ESF) 
and  Erasmus+  to  fund  projects  that  develop  upskilling  pathways,  or  improve  current 
programmes,  including  Erasmus+  projects  to  design  tailored  learning  provision  but  also 
support  services  such  as  outreach  to  learners  furthers  from  learning,  guidance  services, 
skills assessment tools or procedures. The Commission will also launch calls for proposals 
under  the  Employment  and  Social  Innovation  (EaSI)  programme  to  support  awareness 
raising  and  under  the  Erasmus+  Key  Activity  3  Call  for  forward-looking  projects  to 
develop pathways and learner support.  

4) The Commission launched a Blueprint for sectorial cooperation on skills which supports 
employers, trade unions, education and training institutions and other relevant stakeholders 
to work together to identify and address skills mismatches in a number of sectors. Work at 
EU level will focus on developing a comprehensive skills strategy and, among others, on 
updating  curricula  and  training  modules.  At  national  and  regional  level  implementation 
will  depend  on  national/regional  specificities,  and  could  be  supported  by  European 
Structural and Investment Funds (ESIF). The Blueprint will be piloted in the automotive, 
defence,  space  data,  maritime  technologies,  textile-clothing-leather-footwear  and  tourism 
sectors158. A call for proposals has been launched on 26 January 2017 under Erasmus+ to 
support EU partnerships (EUR 4 million for 4 years per sector).  

5) In  2017,  the  Commission  will  propose  a  revision  of  the  2006  Key  Competences 
Framework.  The  review  will  ensure  the  framework  reflects  political,  social,  economic, 
ecological  and  technological  developments  since  2006,  such  as  migration,  the  challenges 
of  radicalisation,  digital  communication,  and  the  increased  importance  of  science, 
technology,  engineering  arts,  mathematics  (STEM)  and  digital  skills.  The  review  will 
support  education  and  training  systems,  institutions  and  educators  to  develop  and 
implement  competence  based  education,  training  and  learning  and,  as  a  result,  help  to 
increase the number of people equipped with basic skills and key competences.  

Competence frameworks 

6) The Digital Competence Framework (DigComp), launched in 2015 provides the basis for 
a common understanding of what digital skills are and how to assess them159. Version 2.0 
of the framework is used to develop education and training curricula and programmes on 
digital  competences;  create  non-formal  and  work  based  programmes  and  training  to 
support  the  development  of  digital  competences;  make  policy  and  set  targets  for  digital 
education  and  training  to  support  digital  skills  and  competences;  design  tools  for 

158  Construction, steel, health, green technologies and renewable energies will be assessed in a second wave of 

implementation starting in 2017. 

159  The  Digital  Competence  Framework  is  used  in  at  least  19  Member  States/regions  for  policy  support, 

assessment for employability, education and training content and teacher's professional development 

43 

 
 
 
                                                            
assessment  and  self-assessment  of  digital  skills  and  competences 
employability.  

including  for 

A  new  version,  with  examples  of  use  and  eight  proficiency  levels  is  planned  to  be 
published  in  mid-2017.  In  addition,  the  Commission  is  developing  a  self-assessment 
instrument, planned for early 2018. The Commission continues to explore ways to widen 
the use of the Digital Competence Framework to all stakeholders in the European Union. A 
Digital  Competence  Framework  for  Consumers160  (DigCompConsumers)  was  notably 
developed  to  offer  a  reference  framework  to  support  and  improve  consumers’  digital 
competence.  A  framework  for  Educators'  digital  competence  (DigCompEdu)161  is  under 
development.  

7) In  2016,  the  European  e-Competence  Framework  (e-CF)  became  a  European  standard 
and was published officially as the European Norm EN 16234-1. It provides a reference for 
the  competences  of  IT  professionals  across  Europe  and  it  is  designed  to  meet  the 
requirements of businesses, education and other organisations in public and private sectors. 
Being a key component of the EU e-skills strategy, the e-CF is also supporting key policy 
objectives  of  the  "Digital  Skills  and  Jobs  Coalition"  and  is  promoted  as  a  useful  tool  to 
foster ICT professionalism, boost digital skills and the recognition of the competences and 
qualifications across Europe. As the current version was technically finalised in 2013, the 
Commission  launched  the  revision  of  the  standard  in  2017,  in  correspondence  to  new 
emerging digital business trends and market needs. 

Peer support and research in education and training 

Within the Education and Training 2020 Framework (ET2020), the Commission also supports 
Member States through exchanges of experience and best practice within a dedicated ET2020 
Working Group on Digital Skills and Competences. This group discusses both the teaching of 
digital skills and competences across educational sectors, as well as the potential and effective 
integration of digital technologies in improving teaching and learning.  

4.2. 

Startups and digitisation of industry and service sectors 

Policy Context  

The  DSM  strategy  aims  to  set  framework  conditions  to  help  mobilise  significant  private 
investment to achieve the EU digital ambition, as articulated in the "Maximising the growth 
potential of the Digital Economy" chapter of the DSM strategy. 

The  wide  integration  of  digital  technologies  and  innovations  in  products,  services  and 
business  models  across  all  sectors  of  the  economy  is  essential  to  pave  the  way  for  future 
sustainable growth and jobs.  

During  the  past  years,  both  the  Commission  and  Member  States  have  increased  the 
digitisation  awareness  across  the  European  industry,  but  European  SMEs  are  still  lagging 
behind  in  relation  to  awareness.  Only  about  1  out  of  5  companies  across  the  EU  is  highly 

160  https://ec.europa.eu/jrc/en/digcompconsumers  
161  https://ec.europa.eu/jrc/en/digcompedu 

44 

 
 
 
 
                                                            
digitised,  and  rates  vary  significantly  across  different  sectors  of  the  economy  and  between 
Member States.162  

162  https://ec.europa.eu/digital-single-market/en/integration-digital-technology 

45 

 
 
 
 
                                                            
Source: The Digital Intensity Index (DII) is a micro-based index that measures the 
availability to the firm of 12 different digital technologies163 

What has been delivered?  

The Digitisation of Industry Communication164 includes a governance framework that links 
national initiatives on digitising industry, creating a 'European platform of national initiatives' 
to facilitate the coordination of EU and national digitisation initiatives and roll out the digital 
transformation of industry across Europe, notably to share experiences and collaboration and 
trigger  joint  investments.  The  Platform  builds  on  and  complements  the  13  existing 
initiatives165 and will welcome and support more upcoming national initiatives166 as they are 
launched. The European Platform was launched on the occasion of the Digital Day in Rome 
in  March  2017  and  will  contribute  to  the  building  of  a  critical  mass  of  initiatives  and 
investments. The strong ministerial presence at the launch event shows the desire of Member 
States to drive digitising initiatives at the highest level, in a common collaborative effort with 
the European Commission and with an ambitious level of investments at national level. 

The  Commission  has  developed  a  catalogue  of  national  and  regional  initiatives  and 
priorities167, which it will update annually. In addition, the Commission will regularly report 
on the progress of all Digitisation of European Industry (DEI) actions. 

Under Horizon 2020's transport challenge, about EUR 1 billion has already been provided to 
develop  and  test  new  approaches  on  connected  and  automated  road  transport  as  well  as 
automation  projects  for  rail  (via  the  Shift2Rail  Joint  Undertaking),  aviation  (via  Clean  Sky 
Joint Undertaking and the Single European Sky Air Traffic Management Research – SESAR- 
Joint  Undertaking)  and  for  projects  on  connectivity  and  automation  of  logistics  chains  and 
waterborne transport.  

The  Commission  has  invested  more  than  EUR  200  million  on  Digital  Innovation  Hubs 
(DIHs)  to  support  experimentation  with  digital  innovations,  and  for  networking  of 
competence centres to enable access to the latest technologies in 2016-17. It resulted in about 
150 digital innovation hubs, about 50 % of them being new to the European network of DIHs. 
They support more than 1 500 Startups, SMEs and mid-caps to experiment highly innovative 
digital transformation. Moreover, initiatives of training and mentoring by existing DIHs were 
started to develop further DIHs in the next two years, notably in regions insufficiently covered 
in the network of DIHs and in Central & Eastern Europe. In the field of manufacturing, close 
to 400 SMEs have already benefited. They have tested out robotics, simulation and modelling, 
cyber-physical  systems  and  internet  of  things,  or  laser  based  manufacturing.  Most  of  these 
experiments  have  allowed  them  to  radically  improve  their  products  or  services.  It  has  also 
allowed the developed products to reach the market faster, and increased business confidence 
that investments in these technologies will bring important benefits.  

163  http://bit.ly/2mERBpd 
164  COM (2016) 180  
165  In Austria, Belgium, France, Spain, Portugal, Italy, Czech Republic, Hungary, Germany, Sweden, Denmark, 

Netherlands and Luxembourg. 

166  Such as Digital Impulse in Croatia and Manifesto for Digital Romania. Poland also announced the upcoming 
launch  of  their  strategic  initiative,  and  Latvia  and  Finland  are  making  progress  in  the  definition  of  their 
national initiatives. Additionally, an Industrial Strategy Green Paper has been published in the UK. 

167  https://ec.europa.eu/digital-single-market/en/cordination-european-national-regional-initiatives  

46 

 
 
                                                            
An up-to-date overview will be provided by the European catalogue of DIHs and blueprint for 
operationalising,  sustaining,  and  networking  DIHs  based  on  best  practices,  which  will  be 
delivered in autumn 2017. With EUR 100 million per year until 2020, the EU plans to invest 
in developing further digital innovation hubs and their networks. 

Horizon  2020  addresses  the  technological  foundations  of  industry  in  the  Leadership  on 
Enabling  and  Industrial  Technologies  (LEIT).  Research  and  innovation  priorities  meet 
industry  needs  thanks  to  Public-Private  Partnerships.  These  Partnerships  are  essential  to 
develop the key technologies for digital innovations as well as for Advanced Manufacturing 
and Processing. The Contractual Public Private partnerships (cPPPs) "Factories of the Future" 
and "Sustainable Process Industry" include projects on the integration of Digital technologies 
and the "4th Industrial Revolution".  

I4MS, ICT Innovation for Manufacturing SMEs, is an innovation programme under FP7 and 
H2020 endowed with EUR 110 million investment over 2013-2018. I4MS aims at supporting 
SMEs and mid-caps in the manufacturing sector with access to competences that can help in 
assessing, planning and mastering the digital transformation; access to innovation networks of 
a broad spectrum of competences and best practice examples and financial support to SMEs 
and  mid-caps  to  master  their  digital  transformation.  Through  close  to  300  focused 
experiments  of  short  duration,  brokerage  and  transfer  of  know-how  and  technology  are 
provided by the innovation hubs to the SMEs and mid-caps. It reaches out to 480 participants, 
340  are  from  industry  and  3  out  of  4  industrial  partners  are  SMEs  and  mid-caps,  of  which 
about two third had never participated in an EU research and innovation programmes before. 

Manutelligence  is  a  project  of  EUR  4.8  million  that  aims  to  improve  product  and  service 
developments in multiple industries by digitally connecting all parts of their value chains right 
down to the customer. Funded under the Factory of the Future cPPP, the objective is to enable 
product  designers  to  develop  holistic  views  on  the  lifecycle  of  their  creations  by  gaining 
access  to  relevant  product  and  market  data  from  multiple  sources.  By  merging  the  design, 
manufacturing  and  product  lifecycle  management  systems  with  those  derived  from  the 
emerging  Internet  of  Things,  manufacturers  have  vastly  more  information  at  their  disposal. 
This can help them to develop new innovative services based on their existing products and to 
create  tailored  services  based  on  product  usage  information  and  customer’s  wishes  while 
eliminating resource waste in the process.  

In  June 2016,  the  Commission set  up a thematic  smart specialisation platform for  industrial 
modernisation intended to support industrial projects across the value chain in several regions, 
and  to  combine  regional  funds  with  other  available  funds.  This  will  support  further 
investments  into  successful  innovations  developed  through  a  European  Network  of  Digital 
Innovation Hubs.  

Over EUR 12 billion of regional funds were allocated to advanced support services for SMEs 
to support entrepreneurship and incubation:  

  Around 12 % of the smart specialisation priorities that emerge from the over 120 national 
and regional smart specialisation strategies focus specifically on digital innovations; e.g. 
the  Photonics 
innovation 
management  capacities,  technology  transfer  and  cluster  development  across  sectors  and 
technology fields. 

(Oberkochen,  Germany)  provides 

Innovation  Booster 

  Many projects that support SMEs to be more innovative are under implementation such as 

47 

 
 
 
 
the  project  Economy  4.0  in  SMEs:  The  Digital  Transformation  (WiMiT)  (EUR 
600,000)  in  Bayern  Germany  that  supports  medium-sized  companies  in  the  field  of 
digitisation  while  the  project  Innovaatioseteli  (Innovation  voucher)  (EUR  700,000)  in 
Finland  uses  innovation  vouchers  to  make  it  simpler  for  companies  to  choose  service 
providers  and  to  make  production  of  services  more  dynamic  and  reactive  to  market 
changes.  

  Many  other  completed  projects  in  this  area  have  helped  the  modernisation  via  ICT  of 
SMEs  in  different  sectors  and  in  various  Member  States.  An  innovative  mobile 
application makes farming simpler and more efficient in Slovenia (Ljubljana) (EUR 2 
million).  The  new  mobile  application  helps  farmers  in  administrative  tasks  such  as 
accounting,  reporting  and  monitoring  their  daily  activities.  The  project  "ICT  Venture 
Capital Funds" – Supporting the Digital Economy in Greece, which is making use of 
innovative  financial  engineering  products  to  support  investment  in  ICT  startups.  So  far 
over 60 startups have been financed, leading to the creation of 700 jobs (EUR 42 million). 
In Poland the project Boosting ICT startups in Poland with the creation of The Torun 
Technology Park project helped IT entrepreneurs in northern Poland develop their startups 
(EUR 16 million).  

  Pipistel, a highly sophisticated and cost efficient aircraft designer SME in Slovenia, was 
supported  by  the  I4MS  programme  with  digital  skills  and  high-performance  computing 
resources  to  develop  an  aircraft  that  uses  less  fuel  with  higher  transportation  capacities, 
showing the way how to dramatically reduce development time and costs, by a factor 15 
and 10 respectively.  

  Heildelberger Druckmaschinen – Printing RDI (Germany): the company received a EUR 
100  million  loan  from  the  European  Investment  Bank  (EIB),  which  it  used  to  invest  in 
research  and  development  activities  focused  on  digitisation,  software  integration  and  an 
expansion of its digital printing portfolio.  

The  development  of  digital  industrial  platforms  is  essential  for  facilitating  the  operations  of 
the  connected  industry  of  the  future.  Platforms  are  bridging  technology  development  and 
market deployment, and allow EU actors to join forces in driving future global standards in 
their  interests.  To  ensure  European  leadership,  collaboration  is  needed  to  develop  the  next-
generation  digital  platforms,  reference  architectures,  and  integration  and  interoperability 
frameworks. 

Promising  initiatives  such  as  RAMI  (Reference  Architecture  Model  Industry  4.0)  and 
Industrial Data Space have been identified that could serve as a starting point to significantly 
ease integration efforts and facilitate the exchange and connection of data between different 
companies and organisations within a secure business ecosystem. 

Horizon 2020 Public-Private Partnerships are essential for developing key digital technology 
building  blocks.  Large  scale  pilot  projects  prepare  broad  deployment  through  test  beds, 
experimentation  facilities  and  pilot  lines,  leading  to  standardisation.  Examples  include  the 
ECSEL Lighthouse projects and a dedicated Focus Area in the R&I Work Programme 2018-
2020  on  “Digitising  and  transforming  European  industry  and  services”,  which  combines 

48 

 
 
 
 
 
 
 
 
 
 
budgets  across  PPPs.  In total,  EU  spending  for  2018-20  on  platform  building,  large-scale 
piloting,  pilot  lines,  etc.  is  targeted  in  the  order  of  magnitude  of  EUR  1  billion.  Based  on 
preliminary inputs from Member States and industry, industrial platform initiatives have been 
identified for ‘connected smart factory’, ‘health and care’, ‘smart agriculture’, 'connected and 
automated mobility', "smart energy', as well as for cross-cutting industrial data and Internet of 
Things platforms.  

Building  further  on  the  successful  EU  wide  partnerships,  which  have  enabled  the  latest 
technologies to be brought to market and strengthened collaboration of academia and industry 
with important spill-over effects on the whole economy, it is essential to further continue the 
development  of  digital  innovations,  and  their  integration  into  digital  industrial  platforms, 
critical to the EU industry. 

It is being considered to implement the above initiatives with support from Horizon 2020 and 
the Connecting Europe Facility in the Work Programmes 2018-20, from regional and national 
programmes,  and  from  industry  and  the  private  sector.  In  2018-2020,  projects  will  be 
launched to support the development of next-generation digital platforms and their validation 
via large-scale piloting in the areas of Connected Smart Factories, Smart Agriculture, Digital 
Transformation of Health and Care, Industrial Data Platforms, and the Internet of Things.  

In  this  new  environment,  devices,  services  and  applications  need  common  ICT  technical 
specifications  to  communicate  seamlessly  with  each  other,  regardless  of  manufacturer, 
operating  system  and  other  technical  components.  For  instance,  ongoing  work  on  ICT 
technical  specifications  inter  alia  aim  at  ensuring  that  connected  vehicles  will  be  able  to 
exchange data with other brands, and circulate across borders communicating with different 
road operators and traffic management centres.  

The  ICT  Standardisation  Priorities  for  the  DSM  Communication168  identifies  Cloud, 
Internet of Things, Cybersecurity, 5G and Data as the five priority areas for standardisation.  

The priority areas are being followed through collaboration with the relevant stakeholders, in 
particular with the European Multi-stakeholder Platform on European Standardisation.  

5G  -  The  5G  Public-Private  Partnership  (PPP)  ensures  integration  of  requirements  from  all 
sectors.  The  Global  Partnership  Project  responsible  for  5G  standards  (3G  PP)  is  working 
towards 5G standards. 

Internet  of  Things  (IoT)  -  Stakeholders  have  set  up  the  Alliance  of  Internet  of  Things 
Innovation,  to  build  consensus  on  reference  architectures  and  support  standardisation  to  fill 
any identified gaps. The global partnership project to develop IoT technical specifications has 
adopted a common service platform.  

Data - The Commission established the Big Data Value PPP and funds research projects to 
develop  a  roadmap  towards  a  big  data  reference  architecture  and  the  production  of  ICT 
standards for better interoperability of data to support cross-sectorial integration.  

Cloud  -  EU  funded  projects  are  contributing  to  development  of  standards  allowing  service 
level agreements and interoperability/portability across the cloud. Alignment of open source 
and common technical specifications can speed-up development processes and up-take of ICT 
technical specifications, and reduce public procurement costs. 

168  COM(2016) 176 final 

49 

 
 
                                                            
Cybersecurity - The Commission is working closely with Member States and the European 
Union  Agency  for  Network  and  Information  Security  (ENISA)  in  the  Network  and 
Information Security (NIS) Directive Cooperation Group to identify best practice and sector-
specific  guidance  for  cybersecurity  risk  management  based  on  European  and  international 
standards.  Furthermore,  work  is  on-going  on  ICT  security  certification  with  the  support  of 
ENISA  and  the  Commission,  while  a  dedicated  Working  Group  on  Standards  and 
Certification has been set up in the Cybersecurity contractual Public-Private Partnership. 

The  Communication  also  proposes  a  high-level  political  process  to  validate,  monitor,  and 
adapt  the  list  of  priorities.  New  standardisation  domains  are  being  assessed,  e.g.  financial 
(FinTech)  and  blockchain/distributed 
these 
ledger 
developments has caught the attention of the European Parliament.169  

technologies.  The  potential  of 

Startup Europe170 

To  boost  digital  entrepreneurship  across  Europe,  the  Startup  Europe171  initiative  actively 
works  to  create  links  between  ecosystems  of  entrepreneurs,  connect  highly  skilled  people, 
local ecosystems and international partners, and provide startups with information through the 
One  Stop  Shop.  In  2017,  the  Commission  will  reinforce  Startup  Europe  to  help  startups 
benefit from the Digital Single Market. Startup Europe  will coordinate EU work to  connect 
digital  ecosystems  across  Europe  and  bring  greater  coherence  between  EU  initiatives  in  the 
area  of  digital  entrepreneurship,  particularly  by  linking  up  national  and  regional  Ministries, 
innovation agencies and other stakeholders and ecosystems.  

Promoting Innovation Examples 

SME guarantees 
In the field of equity financing, in addition to the InnovFin Venture Capital product launched 
in  June  2015,  designed  to  back  the  Venture  Capital  Funds  supporting  innovative  small  and 
medium-sized  enterprises  and  innovative  intermediate-sized  enterprises  in  their  growth,  the 
Commission  has  (mid-October  2016)  extended  the  range  of  products  in  support  of 
investments  with  InnovFin  Business  Angel  and  InnovFin  Technology  Transfer.  Innovative 
SMEs  and  small  mid-caps  are  among  the  targets  of  these  three  products  which  aim,  in 
partnership  with  the  European  Investment  Fund  (EIF)  and  the  European  Fund  for  Strategic 
Investments (EFSI), to invest in such companies no less than EUR 4 billion. 

Mid-caps and large companies 
Three  instruments  (two  for  innovative  intermediate-sized  enterprises  and  one  for  innovative 
larger companies) are available for loans of between EUR 7.500 and EUR 300 million. The 
digital economy is one of the investment targets.  

Equity for SMEs and small mid cap:  
Via InnovFin Equity, the European Investment Fund (EIF) provides equity investments and 
co-investments to or alongside funds focusing on companies in their pre-seed, seed, and 
startup phases operating in innovative sectors covered by Horizon 2020, including life 
sciences, clean energy and high-tech. Under InnovFin Equity, EIF targets investments in 
around 45 funds, mobilising a total amount of EUR 4-5 billion to be invested in enterprises 

169  http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P8-TA-2016-0228, 

http://www.europarl.europa.eu/oeil/popups/ficheprocedure.do?lang=&reference=2016/2243(INI)  

170  http://www.startupeuropeclub.eu  
171  COM (2016) 733 

50 

 
 
 
 
                                                            
located or active in the EU and Horizon 2020 Associated Countries (Participating Countries). 

Startup Europe 
Over 700 startups have benefitted from Startup Europe programmes and over 3400 jobs have 
been created as a result. Over 200 million euro has been raised by startups that passed through 
Startup Europe projects. 

Peter Boye is the founder of Learning to Sleep, a startup in the Healthcare and Mobile sectors 
in Sweden. “Startup Europe has connected us with startup communities around Europe which 
have been of great help in internationalisation activities. A concrete example is our future 
expansion into the German market, where the contacts provided by Startup Europe gave us 
access to the startup community in Berlin and presence at the CEBIT 2017 conference. We 
are really satisfied and our experience has made the difference for us when now expand to 
other markets”. 

Blockchain and Fintech 

Blockchain refers to a public register containing all transactions that have taken place across a 
peer-to-peer  network.  It  is  a  decentralised  technology  that  enables  participants  to  make 
transactions, such as online payments, without having to go via a trusted central authority (a 
“middleman”)172.  The  well-known  cryptocurrency  Bitcoin  relies  on  blockchain  technology, 
but blockchain can potentially be used for all sorts of digital transactions, redefining how we 
operate,  record,  authenticate  and  share  data.  Blockchain  technologies  can  transform  digital 
services,  moving  away  from  centralised  platform  models  and  can  be  applied  to  different 
domains:  eHealth  services,  eGovernment  and  social  goods  delivery,  energy,  supply-chains, 
Internet of Things, the financial sector and others. By offering transparency and auditability 
Blockchain  have  the  potential  to  empower  citizens'  control  and  help  reduce  fraud  and 
compliance costs for public authorities and supervisors.  

Fintech (technology-enabled financial innovation) innovators and entrepreneurs are redefining 
the  way  we  save,  borrow,  invest,  spend  and  protect  our  money.  They  transform  financial 
services and pioneer an innovative culture. Traditional financial institutions invest significant 
effort and  money to  adapt to  this new environment, to  respond to  new consumer needs and 
behaviours. Across Europe, there has been considerable uptake of new digital channels: over 
58 % of Western Europeans (85 % for Northern Europeans) prefer to use digital over physical 
branches. Investments in this area have increased fivefold between 2013 and 2015. 
The financial industry has been a first mover in testing blockchain-based solutions173. In order 
for blockchain to be widely rolled-out, the issues of scalability, governance, interoperability, 
legal and regulatory aspects need to be addressed. This would require creating an environment 
that is safe, future-proof, favours experimentation and enables innovation.  

Some  regulatory  adjustments  have  already  been  adopted  such  as  amendments  to  the  Anti-
Money  Laundering  directive  and  the  use  of  electronic  identification.  Since  July  2016,  the 
Electronic  Identification  and  Trust  Services  Regulation  can  give  e-transactions  and  other  e-
signed  documents  the  same  legal  status  as  those  that  are  paper-based.  The  new  Capital 

172  https://www.enisa.europa.eu/topics/national-csirt-network/glossary/blockchain  
173  90%  of  major  North  American  and  European  banks  are  exploring  Blockchain.  They  have  built  proof-of-
concepts  for  different  applications  such  as  trade  finance,  international  payments,  securities  markets,  new 
customer on boarding, with huge efficiency gains and cost-cutting potential.  

51 

 
 
 
 
 
                                                            
Requirement Regulation CRR2 package adopted in 2016 takes technological innovations into 
consideration, and so is the 2017 Action Plan for Retail Financial Services. 

Following several public consultations regarding financial services, the EU Parliament report 
on Blockchain and Virtual Currencies174 and a Roundtable "Banking in the Digital Age", the 
Commission has set-up an internal horizontal Financial Technology Task Force to explore the 
impact of new financial technologies on consumers and businesses and the possible risks for 
financial  stability.  In  particular,  it  covers  regulation  and  supervision,  data  protection,  cloud 
identification  and  blockchain.  A  specific  public 
services,  cybersecurity,  electronic 
consultation has been launched in order to formulate recommendations for further actions at 
EU level.  

The Union has much to gain from a true Digital Single Market in financial services. Enabling 
innovative  services  and  fully  digital  processes  and  interactions  can  reinforce  the  European 
financial sector's competitiveness, and stimulate the growth of startups. 

Geo-spatial and metrological data 

The Commission will encourage greater use, take-up and exploitation of Copernicus175 data 
by launching the Data and Information Access Services (DIAS). In this, massive amount of 
Copernicus  and  other  data  is  made  available  together  with  processing  capacities  and  tools 
allowing businesses and public authorities to offer added-value services based on Copernicus 
data and information. This will be operational in early 2018. The DIAS will be a cloud-based 
infrastructure  set  up  by  industry  that,  in  the  future,  will  link  to  the  European  Open  Science 
Cloud  and  to  other  e-infrastructures  such  as  the  EU  Infrastructure  for  Spatial  Information 
(INSPIRE Directive) to allow the integration of Big Data coming from different sources.  

Transport and mobility 

Mobility faces great challenges and given its important role in the economy it is imperative to 
address them efficiently. Among the main challenges are 
1)  road safety, as 26 000 people died on European roads in 2015176;  
2)  the environmental impact, as  transport is responsible for a quarter of all  greenhouse gas 

emissions in the EU;  

3)  the successful introduction of new transport modes such as drones; 
4)  economic concerns, as roads congestion causes a huge cost to the EU economy; and 
5)  the  global  competitive  position  of  EU  industry,  especially  the  automotive  sector,  where 

Europe is still in the lead, but is challenged by big US entrants from the IT sector. 

Connected, cooperative and automated vehicle and system technologies are advancing rapidly 
for  road,  but  also  in  other  modes,  and  creating  high  expectations:  offering  new  mobility 
services for passengers and freight, improving traffic management, saving fuel and emissions, 
reducing road fatalities by mitigating human error, helping integrate all transport modes, and 
creating new jobs and business opportunities, to mention just a few of the potential benefits.  

The Commission is supporting not only technology research and development but also large 
scale  cross-border  trials  of  automated  vehicles  with  dedicated  calls  on  automated  road 

174  http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P8-TA-2016-0228 
175  Through the Copernicus programme, the EU collects earth observation data and makes it available to public 

bodies, researchers, business and citizens through an open data policy.  

176  http://ec.europa.eu/transport/road_safety/specialist/statistics_en  

52 

 
 
 
 
                                                            
transport and Internet of Things in Horizon 2020. On vehicle legislation and traffic rules for 
automated vehicles, the Commission together with Member States and international partners 
(e.g. Japan) have developed in the framework of United Nations Economic Commission for 
Europe  a  first  set  of  international  rules  for  vehicles  and  traffic  law  for  upcoming  partially 
automated systems.  

Regarding  the  deployment  of  interoperable  infrastructure  and  services  for  Cooperative 
Intelligent  Transport  Systems  (C-ITS),  the  Commission  launched  the  C-ITS  platform  in 
November 2014, to allow road users and traffic managers to share information and use it to 
coordinate their actions. This resulted in an expert report endorsed and published in January 
2016 which laid the groundwork for the EU Strategy on C-ITS177. This, in turn, enables pan-
European deployment of C-ITS services from 2019 onwards. 

The  Commission  also  adopted  a  number  of  horizontal  EU  policies  which  are  relevant  for 
connected, cooperative and automated mobility: the Action Plan for the deployment of 5G for 
Europe178  calling  for  the  availability  of  5G  along  main  European  transport  paths,  the  Space 
Strategy  for  Europe179  encouraging  the  use  of  GALILEO  and  EGNOS  positioning  systems 
and  the  Communication  on  the  future  framework  for  a  European  data  economy.  Finally,  a 
comprehensive  reform  of  legislation  on  the  protection  of  personal  data  (GDPR)  in  the  EU 
entered into force on24 May 2016 and it shall apply from 25 May 2018.  

In  line  with  the  Declaration  of  Amsterdam,  endorsed  by  Transport  Ministers  in  April  2016, 
the  Commission  announced  in  the  2017  work  programme  its  intention  to  work  in  an 
integrated way on mobility, connectivity and the future of the automotive industry.  

To further advance the deployment of interoperable infrastructure and mobility services, the 
C-ITS  platform  started  its  second  phase  in  July  2016,  seeking  recommendations  on  how  to 
exploit  synergies  with  automated  vehicles.  The  platform  expects  to  endorse  and  publish  a 
second expert report, concluding this phase, by September 2017. This is complemented by the 
C-ROADS  platform  which  launched  at  the  end  of  2016  and  links  all  C-ITS  deployment 
activities (amongst others making use of co-funding from the Connecting Europe Facility) to 
jointly develop technical specifications and to verify cross-border interoperability. 

In  order  to  ensure  a  coherent  EU  policy  on  vehicles,  the  Commission  launched  in  January 
2016  the  GEAR  2030  High  Level  Group  gathering  the  relevant  Commissioners,  Member 
States and stakeholders representing various industries: automotive, telecoms, IT, insurance. 
The High Level Group will assist the Commission in developing a long-term EU strategy for 
highly  automated  and  connected  vehicles  by  the  end  of  2017.  The  Group  will  build  on 
complementary  EU  initiatives  and  will  make  recommendations  to  ensure  that  the  relevant 
policy, legal framework and public support are in place for the roll-out of highly automated 
and  connected  vehicles  by  2030.  The  Group  delivered  its  first  recommendations  for 
automated  and  connected  vehicles  up  to  2020  and  is  currently  working  on  developing 
recommendations for automated and connected vehicles up to 2030. 

A  High  Level  Roundtable  involving  telecom  and  automotive  industry  was  launched  in 
September  2015  to  develop  joint  roadmaps  and  establish  cross-border  deployment  actions. 

177  https://ec.europa.eu/transport/themes/its/c-its_en  
178  https://ec.europa.eu/digital-single-market/en/5g-europe-action-plan  
179  http://ec.europa.eu/growth/sectors/space_en  

53 

 
 
 
 
 
 
 
 
                                                            
The  Roundtable  has  already  achieved  a  commitment  from  both  industries  to  form  new 
alliances  and  to  start  real  life  experimentation  with  5G  technologies  for  connected, 
cooperative and automated mobility180.  

For  longer  term  issues  regarding  connected,  cooperative  and  automated  mobility,  in  the 
context  of  the  Strategic  Transport  Research  and  Innovation  Agenda,  the  Commission  is 
developing  a  roadmap  on  connected  and  automated  transport  to  steer  and  coordinate  R&I 
activities and policies in Europe181.  

As announced in the Commission Communication on "Building a European data economy", 
the Commission intends to work with a group of interested Member States to create a legal 
testing  framework  for  conducting  experiments  on  the  basis  of  harmonised  rules  on  data 
access and liability. To allow for access to a sufficiently high volume of data, the trials should 
be based on 5G, operating in seamless co-existence with technologies already being deployed 
and under a complementarity principle.  

A Letter of Intent182 has been signed on 23 March 2017 by all Member States except the UK, 
and by Norway and Switzerland as well. These countries are ready to:  
1) Support  the  implementation  and  cooperation  on  cross-border  initiatives  (on  sections, 
itineraries  or  corridors)  and  extend  existing  ones  on  which  to  conduct  and  facilitate 
research,  tests  and  large  scale  demonstrations  notably  on  road  safety,  data  access,  data 
quality  and  liability,  connectivity  and  on  digital  technologies  for  Connected  and 
Automated Driving (CAD); 

2) Support  the  development  of  shared  practices  and  voluntary  common  building  blocks  to 

conduct such experiments; 

3) Support  the  availability of  spectrum  for  cross-border  experimentation  and  deployment  of 

CAD based on advanced communication technologies; 

4) Work  together  with  the  Commission  to  identify  by  September  2017  the  actions  to  be 

undertaken on the testing and large scale demonstrations. 

Such cross-border test beds will build on the pilot projects foreseen under Horizon 2020 and 
the  Connecting  Europe  Facility  (CEF)  in  the  area  of  connected,  cooperative  and  automated 
mobility.  

Furthermore,  the  European  Aviation  Safety  Agency’s  (EASA)  Data4Safety  (or  D4S) 
programme183  initiated  in  March  by  a  broad  alliance  of  industry  players  and  governmental 
bodies sets an example for organising the free flow of data within a sector, leading to tangible 
benefits  for  both  aviation  safety  and  the  leadership  of  European  industry.  It  will  take 
advantage of Big Data technologies to organise the collection of data from different actors in 
the aviation sector and support their analysis for the benefit of the European aviation safety 
system. 

Energy  

180  https://ec.europa.eu/digital-single-market/en/cooperative-connected-and-automated-mobility-europe  
181  http://ec.europa.eu/programmes/horizon2020/en/news/towards-strategic-transport-research-innovation-

agenda-stria  

182  http://ec.europa.eu/newsroom/dae/document.cfm?doc_id=43821  
183  https://www.easa.europa.eu/newsroom-and-events/news/easa-and-aviation-partners-launch-data4safety 

54 

 
 
 
 
 
 
                                                            
In November 2016 the Commission adopted the "Clean Energy for all Europeans" package. 
Digital  technologies  can  help  in  making  the  energy  system  more  renewable-based,  energy-
efficient and bring better service to consumers, with the package putting strong emphasis on 
digitalisation. 

a)  Energy markets and smart grids  

The energy sector involves a number of different actors in different roles: energy producers, 
transmission  system  operators  and  distribution  system  operators.  For  the  functioning  of  the 
single  market  at  wholesale  and  retail  level,  cross-border  access  to  relevant  data  is  of  key 
importance. In addition, real-time information from the smart grids can support the efficient 
operation of the grid and facilitate energy services. This is in particular the case for example 
when  renewable  energies  are  integrated  in  the  energy  system.  Access  to  such  data  would 
enable innovative solutions which can lower energy costs and enhance security of supply.  

A more efficient use of European electricity resources and balancing the grid needs to have a 
European  scale,  thus  requiring  a  European  data  access  governance  framework.  This 
framework is to take into account data management models currently in use while guarantee 
security and minimise cybersecurity risks. 

b)  Energy markets and smart meters  

With the massive roll-out of smart meters measuring electricity consumption, there are many 
possible uses for the enormous amount of data produced by energy market players. Improving 
access  to  smart  metering  information,  produced  in  a  more  detailed  level  and  close  to  real-
time, is one of the objectives of the proposal for a recast Electricity Directive. The proposal 
requires from Member States to ensure consumers' free access to their consumption data and 
to ensure the interoperability of smart metering systems, including through open standards.  

The Commission also proposed a new design of the EU energy market under the 2016 "Clean 
Energy  for  all  Europeans"  package.  The  objective  is  to  ensure  transparent  and  non-
discriminatory data access by any third parties with whom the consumers may choose to share 
their metering data, under a common format and procedures set up at European level. 

The  project  Intelligent  Network  Building  in  Poland  (EUR  2.5  million)  aims  to  ensure  an 
economically  and  technically  effective  and  sustainable  energy  system  of  low  loss,  high 
quality,  reliability  and  security  of  electricity  supply  level  for  the  electric  grid  in  the 
municipalities of Dąbrowa Chełmińska i Sicienko.  

iSARE, MICROGRID GIPUZKOA in Spain (EUR 3 million) designs and builds an efficient, 
sustainable  and  safe  smart  grid,  to  develop  and  experience  the  state  of  the  different  energy 
generation and storage technologies. 

in  Denmark,  with  demand-response  devices  using  smart  controllers 

The  EU-funded  initiative  EcoGrid  EU  equipped  almost  2  000  homes  and  businesses  in 
Bornholm 
to 
automatically adjust electricity consumption depending on fluctuations in supply. During peak 
generation periods when the wind is blowing strongly, the system automatically lowers prices, 
encouraging  consumption  and  ensuring  renewable  energy  usage  is  maximised.  If  the  wind 
dies down, prices rise and the smart controllers automatically reduce consumption in homes, 
such  as  by  turning  down  heating  within  predefined  parameters.  Danish  electricity  suppliers 
and grid operator Energinet.dk have estimated that the widespread deployment of smart grid 
solutions  in  Denmark  would  generate  savings  of  at  least  DKK  1.6  billion.  Last  year 

55 

 
 
 
 
Denmark’s wind farms supplied 42 % of demand, and by 2020 it is expected that wind power 
will  exceed  total  demand  for  electricity  by  more  than  1  000  hours  per  year.  The  EU  grant 
amounted to EUR 12.6 million, while the total budget of the project is EUR 20.6 million. 

With  the  Smart  Meters  UK–Spark  project  (United  Kingdom)  suppliers  can  avoid  deploying 
their staff to read meters which will save on operational costs. Customers will not need to stay 
at home for the reading, improving efficiency. 

c)  Digitisation in buildings 

The  use  of  sensors,  controls,  real  time  data  and  cloud  based  solutions  greatly  facilitates  the 
energy efficient management of buildings. The proposed revision of the Energy Performance 
of Buildings Directive aims to provide incentives for smart buildings deployment, such as the 
introduction  of  recharging  points  actively  reacting  to  price signals, and  promotes  the  use  of 
European  standards 
the  Smart  Appliances  Reference  ontology  (SAREF). 
Furthermore,  the  proposal  establishes  the  possibility  to  access  aggregate  anonymised 
buildings data from national databases for statistical and research purposes.  

including 

d)  Energy poverty 

At present there is limited sharing of data between key stakeholders in some Member States 
(e.g.  energy  suppliers,  municipalities,  healthcare  services)  that  would  facilitate  the 
identification of vulnerable and energy-poor households and enable the provision of targeted 
policy measures to support such households. 

Under the Governance Regulation, Member States will be required to collect data related to 
energy poverty. Linking this data with data on health, housing and environmental spatial data 
would  enable  authorities  to  address  issues  such  as  poor  housing  stock  that  may  result  in 
respiratory diseases and excess winter deaths. 

e)  Accelerating clean energy innovation through digitisation 

Innovation  in  the  energy  sector  will  arise  from  the  combination  of  digital  technologies  and 
new  energy  technologies  (such  as  photo  voltaic  panels,  local  storage,  electric  transport  and 
heating).  Besides  energy  companies,  data  and  communication  companies  are  increasingly 
active  in  this  sector  and  opportunities  open  up  for  new  players.  The  EU  needs  to  turn  its 
political  leadership  into  business  opportunities  for  companies  that  develop  and  offer 
innovative solutions and services to the consumers. 

Therefore,  the  Commission  intends  to  increase  its  support  for  both  sectors  across 
Horizon2020,  with  the  aim  to  promote  rapid  and  wide  dissemination  of  innovative 
technologies and services, helping the Energy Union objectives184.  

Modelling and optimisation software solutions will support the secure real-time operations of 
a  pan-European  power  system  with  very  high  shares  of  decentralised  renewables  and  the 
planning  of  its  long-term  development.  They  will  also  enable  the  integration  of  an  energy 
system efficiently combining electricity, gas, heating, cooling and transport.  

184  COM(2016) 763 

56 

 
 
 
 
 
 
 
 
                                                            
Modelling of the energy system and of its impacts will also support the assessment of policies 
for the decarbonisation of the European energy sector, their follow-up and the reconciliation 
among policies at member state and European level. 

4.3. 

Digital innovation for modernising the public services 

Modernising public administrations 

Policy Context  

For Europe to become a better place to invest and live in, public administrations must take a 
leading role by widely embracing the opportunities offered by digital technologies. In order to 
ensure  that  businesses  can  achieve  returns  on  investments  in  digital  technologies  and  that 
companies  can  conduct  their  business  without  unnecessary  administrative  burden,  there  is  a 
need for effective and efficient public administration. At the same time, governments need to 
live up to citizens' rising expectations by designing policies and providing services addressing 
their  needs,  while  improving  sustainability,  social  inclusion  and  government  accountability. 
The challenge  is  not  to  introduce digital  technologies  into public administrations, but  rather 
the  integration  of  digital  technologies  into  public  sector  modernisation  efforts.185  It  is  its 
transformative nature, impacting all levels of government and various public policy domains, 
that  has  a  great  potential  to  realise  significant  benefits.  Every  year,  over  250,000  public 
authorities all across the EU spend around 14 % of GDP on goods, services and works. If their 
processes  and  demand  increasingly  turn  digital,  they  can  spur  investment  and  innovation  in 
the  wider  economy.  Apart  from  being  digital,  public  administrations  also  need  to  be 
interoperable, in other words be interconnected with each other to implement digital services 
that seamlessly traverse their departments end-to-end. This can in turn allow citizens to easily 
identify and use these services while tracking the progress of their requests, and businesses to 
report and interact with the public authorities in a costless and simple way. For those reasons, 
the  Digital  Single  Market  Strategy  provided  for  the  development  and  adoption  of  a  new 
eGovernment Action Plan and of a new European Interoperability Framework.  

What has been delivered?  

The Communication EU eGovernment Action Plan 2016-2020 – Accelerating the digital 
transformation  of  government186  was  adopted  in  April  2016.  It  contains  a  vision  for  the 
future, a set of principles and specific actions aimed to address the problems faced by citizens, 
businesses and public administrations. Some of these actions included the following: 

1) Modernising public administration with ICT through the roll-out of eProcurement ensures 
the  transition  to  end-to-end  eProcurement  (by  using  contract  registers  which  digitally 
record public contracts, a single European Single Procurement Document (ESPD) and an 
online database of certificates delivered by public bodies (e-Certis) and eInvoicing (which 
traces  precisely  how  public  money  is  spent),  promoting  the  uptake  of  secure  electronic 
identification  and  trust  services  and  testing  a  common  reference  catalogue  of  ICT 
standards  for  public  procurers.  A  prototype  of  this  catalogue,  covering  four  domains 
(eGovernment, Electronic Tolling Systems, Cloud Computing and Energy Efficiency), has 
been developed and recently published187. 

185  Digital Government Strategies for Transforming Public Services in the Welfare Areas, OECD, 2016 
186  COM(2016) 179 final 
187  https://joinup.ec.europa.eu/community/european_catalogue/home  

57 

 
 
                                                            
2) Enabling  cross-border  mobility  through  the  interconnection  of  national  systems 
(business  and  insolvency  registers,  value  added  tax  registers,  social  security  and  health 
systems) and the establishment of a single digital gateway188 offering a better package of 
services  to  people  and  businesses  interested  in  going  cross-border.  The  single  digital 
gateway  is  designed  with  the  user  at  its  core.  It  will  operate  across  administrative  and 
sectorial silos and radically improve the findability, quality and availability of the services 
offered. It will not be a new website, but will build on existing ones both at national and 
EU level and make them searchable through an easy-to-use interface. Common minimum 
quality criteria will apply to all integrated services. Selected procedures will be digitised in 
all EU countries and exchanging supporting documents among competent authorities will 
be  made  much  easier  so  that  citizens  and  businesses  do  not  have  to  submit  the  same 
paperwork several times. The initiative will also eliminate discrimination against any EU 
citizen in accessing existing online procedures in another Member State. The single digital 
gateway will be continuously updated and improved based on users' feedback.  

3) Facilitating digital interaction between and with administrations by opening up public 
sector data and services to third parties and removing practical obstacles to the sharing of 
data between public administrations (for instance of geographical and spatial information).  

The Commission is also taking the necessary steps to apply the principles of the eGovernment 
Action Plan and facilitate access to information as well as interaction with stakeholders. For 
example, we will apply the 'digital by default' principle both internally and when interacting 
with  external  stakeholders  through  grants  or  tenders  using  eIDAS  services,  eInvoicing  and 
eProcurement.189  

The eGovernment Action Plan 2016-2020 is making an important contribution to the success 
of  the  digital  transformation  of  society  by  accelerating  the  digital  transformation  of 
government. As it also provides for a dynamic and flexible approach, further actions can be 
added throughout its lifetime190 to pursue the realisation of a connected Digital Single Market 
and  to  work  towards  modern,  open,  inclusive,  multilingual,  efficient  and  borderless  public 
administrations. 

In  the  area  of  interoperability,  the  Commission  adopted  on  23  March  2017  the 
Communication  European  Interoperability  Framework  -  Implementing  Strategy191.  It 
sets  the  foundation  for  interoperability  to  apply  nationally  and  consequently  globally  in  the 
Union, within and across policy sectors.  

The  new  framework  includes  12  principles  and  47  recommendations  to  guide  public 
administrations in their modernisation efforts by practising ‘interoperability by design’ for the 
implementation  of  end-to-end  public  services.  Member  States  should  align  their  national 
digital  and  interoperability  actions  with  the  framework  and  use  it  as  the  ultimate  guide  for 
their  eGovernment  projects.  The  framework  should  also  be  used  as  the  reference  point  for 
achieving  interoperability  when  preparing  EU  legislation  in  concerned  policy  sector  thus, 
increasing the interoperability effect following national transposition. 

188  COM(2017) 256. 
189  The full list of actions can be accessed here https://ec.europa.eu/futurium/en/egovernment4eu/actions  
190  Either  by  the  Commission  or  by  stakeholders,  including  Member  States  and  public  administrations  at  all 

levels (local, regional, national), see: https://ec.europa.eu/futurium/en/egovernment4eu 

191  COM(2017)134 

58 

 
 
                                                            
Except  from  developing  a  strategic  approach  to  interoperability  through  a  framework,  the 
Commission with instruments dedicated to interoperability such as the ISA2 programme192 has 
already delivered a series of interoperability solutions linked to core DSM priorities, in areas 
such  as  e-procurement  (e-Prior,  e-Certis,  European  Single  Procurement  Document),  secure 
network  infrastructure  (sTesta)  and  data  management  (semantic  specifications  like  ADMS, 
DCAT-AP, core vocabularies for person, location, business and public service). 

New eGovernment Actions in 2017 

In view of the above the following new actions were added to the eGovernment Action Plan:  

IT platform for exchange of electronic evidence between judicial authorities: In line with 
the  EU  security  agenda  and  in  order  to  effectively  combat  cybercrime,  there  is  a  need  to 
improve  the  possibilities  for  judicial  authorities  in  different  Member  States  to  exchange 
electronic evidence between them. In the context of its work on e-Justice193 the Commission 
will develop a secure online platform for requests and responses between judicial authorities 
of the EU Member States concerning e-evidence194. Member States that presently lack such 
capacity will be able to install the portal nationally. Target date: 2019. 

Electronic  Official  Control  for  food  and  plant  products:  This  initiative  will  pursue  the 
digitisation of animal and plant health certificates, in the context of the revision of the Official 
Control Regulation, where an Integrated Management System for Official Control (IMSOC) 
is foreseen. This will lower the administrative cost and burden when importing and exporting 
food and plant products, by integrating better the national and EU food safety services, using 
the possibilities of eSignatures. Target date: 2020. 

Enforcement  of  EU  agri-food  legislation  in  online  sales:  This  action  will  improve  the 
enforcement of EU rules that apply to the sale of food products, when such sale takes place 
over  the  internet.  The  action  aims  to  explore  potential  improvements  of  the  current  control 
regime  through  coordinated  control  actions  by  national  authorities,  the  identification  of 
officially  controlled  online  food  businesses  through  seals  or  logos,  or  other  innovative 
technologies,  and  a  reference  database  for  all  mandatory  indications  from  EU  and  national 
legislation  for  the  labelling  of  certain  categories  of  foods.  This  will  boost  consumers' 
confidence  in  e-commerce  and  foster  consumer  and  food  chain  actors'  information.  Target 
date: 2020.  

'Digital  Government  for  Citizens'  Charter:  The  aim  of  the  guide  is  to  outline  how  the 
principles  of  the  eGovernment  Action  Plan  2016-2020  will  help  citizens  in  the  European 
Digital Single Market save time, money and effort when dealing with administrative matters 
in the future and improve the quality of interactions with public administrations. The initiative 
aims  to  put  citizens  at  the  heart  of  the  digital  transformation  to  ensure  that  they  have  easy, 
trusted, and seamless access to public services, whenever they need them and independently 
of their geographic location. Target date: Q4 2017. 

'Urban  Digital  Transition'  actions:  As  local  administrations  are  at  the  forefront  of 
delivering  many  of  the  public  services,  the  Digital  Transition  partnership  of  the  Urban 
Agenda  for  the  EU  aims  to  provide  better  public  services  to  citizens  and  create  business 

192  https://ec.europa.eu/isa2 
193  June 2016 Council Conclusions 
194  This  action  is  part  of  an  initiative  on  e-evidence  included  in  the  Commission  Work  Programme  2017  and 

linked to the implementation of Directive 2014/41/EU on the European Investigation Order. 

59 

 
 
                                                            
opportunities at local level, with a focus on open data and digital services. The 'Urban Digital 
Transition'  actions  will  identify  areas  where  cities  face  issues  in  their  digital  transition  as 
regards  legislation,  access  and  use  of  available  funds  and  knowledge  base.  The  initiative  is 
part of the Urban Agenda for the EU and the related Pact of Amsterdam, which aim to better 
exploit the potential of cities. Target date: 2018. 

Overall, the new actions aim to address specific citizens' needs and to facilitate their mobility 
within the Digital Single Market, help the integration and use of electronic means for various 
operations of public administrations, streamlining the processes in line with the Action Plan 
principles.  They  will  also  help  stimulate  the  functioning  of  the  Single  Market  by  better 
enforcement of EU legislation.  

EU-funded projects have contributed to  

Citizens'  security  by  helping  to  increase  the  level  of  security  in  the  national  public 
administration  (project  in  the  Czech  Republic  EUR  2.5  million);  offering  a  digital  safety 
observatory  to  society  (project  in  Poland  Śląskie  Voivodeship  Silesian  Police,  EUR  4.2 
million); issuing biometric travel documents (project in Hungary, EUR 2.7 million). 

Reduction  of  red-tape  through  more  efficient  tax  services  (project  in  Latvia,  EUR  3.5 
million).  

Well-being  and  tourism  by  enabling  elderly  people  with  memory  disorders  to  continue 
living at home (project in Finland, EUR 350,000); using a mix of online communications and 
social  media  to  attract  tourists  (project  in  Lapland  -  North  of  Finland,  EUR  2.9  million); 
providing  e-services  in  the  field  of  culture,  protection  and  promotion  of  cultural  heritage 
(Internet portal of the Border Land of the Old Republic Heritage Museum in Poland, EUR 1.3 
million);  modernising  tourism  information  services  through  digital  kiosks  (Spain,  Madrid 
EUR 1.7 million). 

Creation  of  jobs  through  a  New  generation  data  centre  that  has  trickledown  effect  on  an 
entire region (Portugal, Covilha, EUR 15.7 million).  

In the area of interoperability, the ISA2 programme will continue delivering concrete solutions 
contributing to the completion of the Digital Single Market. Planned actions include support 
to the implementation of the INSPIRE Directive when it comes to interoperable exchange of 
location  data,  production  of  a  framework  and  roadmap  for  financial  data  reporting  and 
standardisation,  and  development  of  services  related  to  case  management  for  competition 
policy. 

Digital transformation of health and care  

Policy Context  

Europe  faces  a  major  challenge  with  ensuring  the  sustainability  and  quality  of  health  care 
provision,  as  a  consequence  of  demographic  change,  increased  longevity  and  rising 
prevalence  of  chronic  conditions  and  the  re-emergence  of  infectious  diseases.  Public 
expenditure on health and long-term care has been increasing over the last decades in all EU 

60 

 
 
 
 
 
  
Member  States,  and  is  expected  to  rise  even  further195.  To  a  considerable  degree  this  is  a 
consequence  of  an  ageing  population.  In  2015  healthcare  spending  accounted  for  8.7  %  of 
GDP  in  the  EU  and  could  reach  up  to  12.6  %  of  GDP  in  2060196.  The  extra  years  of  life 
gained through increased longevity are not necessarily spent in good health. Healthy life years 
(HLY) have not been increasing. Between 2010 and 2014 there has been a decline in average 
HLYs in the EU28. 

The  Commission  Communication197  on  effective,  accessible  and  resilient  health  systems 
concluded that Member States’ future ability to provide high quality care to all will depend on 
making  health  systems  more  resilient,  more  capable  of  coping  with  the  challenges  that  lie 
ahead.  And  they  must  achieve  this  while  remaining  cost-effective  and  fiscally  sustainable. 
Digital  technologies,  such  as  4G/5G  mobile  communication,  artificial  intelligence  and 
supercomputing offer new opportunities to transform healthcare systems198. They enable new 
approaches to personalised medicine, independent living or integrated health and social care, 
accelerate  scientific  progress  for  early  diagnosis  and  prevention  of  diseases  and  more 
effective treatments. Technology can  help improve citizen's  health  and address the systemic 
challenges faced by health and long-term care systems. 

What was delivered? 

The  2015  DSM  Strategy  highlighted  the  need  to  make  progress  on  standardisation  and 
interoperability  of  eHealth  solutions  in  support  to  health  system  reforms.  In  response  to  the 
Strategy, work focused on the major identified areas, including those in the digitising industry 
and  public  services  package  of  April  2016  (specifically  in  the  ICT  priority  standardisation 
plan199 and the eGovernment action plan200. Other relevant actions201 include: (i) the adoption 
of  new  guidance  on  interoperability  and  standards  for  digital  health  and  care,  (ii) 
strengthening of the digital infrastructure for cross border exchange of health data through the 
Connecting  Europe  Facility  (CEF),  and  (iii)  new  investment  commitments  in  large  scale 
implementation  of  in  digital  health  and  social  care  programmes  from  national  and  regional 

195  With an average age of 44 years, Europe will be the ‘oldest’ region by 2030 — more than double the average 
age  of  21  in  Sub-Saharan  Africa.  People  over  65  will  account  for  close  to  23  %  of  the  European  Union’s 
population, compared with 16 % today (Rand Europe report to ESPAS 2013). 

196  According  to  the  European  Commission's  Joint  Report  on  Health  Care  and  Long-term  Care  Systems  and 

Fiscal Sustainability (7 October 2016). 

197  COM(2014) 215 final. 
198  Health  and  care  has  been  identified  by  most  of  the  digital  PPPs  in  Horizon  2020  as  a  core  business  area 
where digital technologies can play a major role. The Digitising European Industry (DEI) high level group 
recently  established  a  working  group  on  health.  The  profound  transformation  of  the  job  market  sees  an 
increasing  number  of  routine  tasks  being  replaced  by  automated  processes,  but  at  same  time  it  leads  to 
opportunities  multiplying  in  the  digital  health  care  sector  (Deloitte  2016  Transformers:  How  machines  are 
changing every sector of the economy). 

199  COM(2016) 176 final. 
200  COM(2016) 179 final . 
201  The  eHealth  Network,  under  Article  14  of  Directive  2011/24/EU,  has  adopted  guidelines  on  the  minimum 
patient  summary  datasets for  electronic  exchange and on ePrescriptions.  On 28  July  2015  the  Commission 
has  adopted  the  Decision  on  the  identification  of  ‘Integrating  the  Healthcare  Enterprise’  profiles  for 
referencing  in  public  procurement.  In  2016  a  total  of  74  European  regions  from  18  Member  States  were 
awarded the title of 'Reference Sites of the European Innovation Partnership on Active and Healthy Ageing' 
(EIP  on  AHA).  The  network  of  74  reference  sites  have  committed  to  invest  EUR  4  billion  in  digital 
innovation for health and care services over the next three years, benefiting over 4 million people. 

61 

 
 
                                                            
authorities202grouped  under  the  European  Innovation  Partnership  on  Active  and  Healthy 
Ageing. Furthermore, the EU provides approximately EUR 1 billion research and innovation 
funding opportunities under Horizon 2020 that support the development and implementation 
of digital health and active and healthy ageing innovations.  

The  PASSPORT  project  developed  a  "virtual  liver"  that  helps  surgeons  take  critical 
decisions  on  whether  to  operate  a  patient  or  not.  In  2013,  the  project  coordinator  IRCAD 
launched Visible Patient, a startup that developed further the two main results of the project: 
the  patient-specific  preoperative  planning  software  and  the  3D  modelling  service  that  can 
create 3D models of any part of the human body. This service, operating since April 2015 is 
used  in more than 10 different countries with  more than 200 clinical cases modelled during 
the last months.  

New developments and challenges 

a)  Limited access to personal health data across borders 

Notwithstanding the considerable potential of digital technology to contribute to better health 
and care outcomes203 existing barriers limit access to personal health data when citizens travel 
to  another  Member  State.  Citizens'  access  to  digital  health  and  care  solutions  vary  greatly 
across Member States and regions.  

According to Eurobarometer, approximately 52 % of European citizens (respondents) wish to 
have  online  access  to  their  health  records  (including  health  data,  prescriptions  and  medical 
records)204.  However,  only  9  %  of  hospitals  in  Europe  allow  citizens  to  access  online  their 
own medical records (and most of those only give partial access).205 In 2008, Estonia became 
the  first  country  in  the  world  to  implement  a  nationwide  “birth-to-death”  electronic  health 
record  system  for  nearly  every citizen.  But  since  then  only  an  additional  13  Member  States 
have  granted  citizen  access  to  electronic  health  records  (EHRs).206  The  use  of  electronic 
prescriptions  (ePrescriptions)  across  Europe  is  equally  diverse,  with  only  a  minority  of 
Member States having it widely available to their citizens207. 

The eHealth Action Plan, supported by the Directive 2011/24/EU (Articles 11, 14) identifies 
electronic  health  records  (EHRs),  electronic  prescriptions  (e-prescriptions)  and  telemedicine 
as crucial components to enable the emergence of innovative digital health and care solutions 

202  In December 2016 the European Commission recognised with Reference Site status 74 EU regions for their 
commitment  to  invest  over  EUR  4  billion  in  innovative  digital  services  for  health  and  social  care 
https://ec.europa.eu/digital-single-market/en/news/74-european-regions-awarded-investing-digital-health-
and-care-elderly . 

203  The  Impact  of  eHealth  on 

the  Quality  &  Safety  of  Healthcare  (Imperial  College  London) 
http://www.ehealthnews.eu/images/stories/Impact_of_eHealth.pdf  and  WHO  Monitoring  and  Evaluating 
Digital Health Interventions: A practical guide to conducting research and assessment. 

204  Special  Eurobarometer  460  on  "attitude  towards  the  impact  of  digitisation  and  automation  on  daily  life" 

(2017). 

205  European  Hospital  Survey  –  Benchmarking  Deployment  of  eHealth  Services  2012-2013  (PwC) 
https://ec.europa.eu/digital-single-market/en/news/european-hospital-survey-benchmarking-deployment-
ehealth-services-2012-2013 . 

206  Overview of National Laws on Electronic Health Records in the EU Member States and their interaction with 

the provision of cross-border eHealth services, July 2014 (Milieu Ltd). 
Index 

207  Euro  Health  Consumer 

2016  Report 

- 

Professor  Arne  Björnberg, 

Ph.D 

(http://www.healthpowerhouse.com/files/EHCI_2016/EHCI_2016_report.pdf). 

62 

 
 
 
                                                            
benefiting  citizens  across  the  Digital  Single  Market208.  The  adoption  of  EHR  and 
ePrescriptions209  across  the  EU  would  improve  health  and  care  services  to  citizens  and 
generate efficiencies210. However, the reality across Member States remains very diverse. The 
level  of  detail  of  the  legislation  on  EHR  contents  varies  greatly,  ranging  from  a  simple 
reference  to  health  data  to  exhaustive  and  detailed  list  of  categories  or  data  items  to  be 
included as part of the EHR.211 

Under the Framework setup by the eHealth Network212, Member States have worked together 
with  the  Commission  to  build  the  eHealth  Digital  Service  Infrastructure  (DSI)  for  cross-
border  exchange  of  Patient  Summaries  and  ePrescription.  Co-funded  by  the  Connecting 
Europe Facility (CEF), the first Member States should go live in 2018, and then the number of 
participants to the exchange will grow. The 2015 CEF Work Programme supports the first 16 
Member States in building the eHealth DSI; the second CEF eHealth call will open in May 
2017 and further Member States are expected to join. 

Europeans requiring medical care when traveling or moving residence to another EU Member 
State are often confronted with the lack of access to their own medical records or medication. 
Access  is  particularly  important  when  citizens  seek  emergency  treatment  while  traveling 
outside their country of origin or residence. The percentage of hospitals exchanging clinical 
care  information  about  patients  electronically  remains  low.  Exchange  of  care  information 
within the same country ranges from 33 % to 39 %, whereas exchange with health and care 
providers in another EU country is only 4 %.213 The percentage of general practitioners (GPs) 
using  electronic  networks  to  exchange  medical  patient  data  with  other  healthcare  providers 
and professionals varies greatly between Member States (from 91.8 % of GPs in Denmark to 
only  5.4  %  GPs  in  Slovenia).  Even  in  countries  with  high  levels  of  domestic  exchange  of 
patient  data,  the  exchange  with  healthcare  providers  in  other  EU  Member  States  remains 

208  Directive 2011/24/EU on the application of patients’ rights clarified the legal framework for patients to be 
reimbursed  for  cross-border  healthcare.  Firstly,  it  established  the  principle  that  a  telemedicine  service  is 
considered  to  be  provided  in  the  Member  State  where  the  service  provider  is  established.  Secondly,  the  e-
Health  Network  established  cooperation  between  Member  State  health  systems.  The  Network  has  adopted 
guidelines  on  patient  summaries  and  e-prescriptions,  and  is  working  on  the  use  of  health  data  for  public 
health and research. The IT system supporting the exchange of patient summaries and e-prescriptions is being 
built with funding from the Connecting Europe Facility. 

209  Tora Hammar, Sofie Nyström, Göran Petersson, Tony Rydberg, and Bengt Åstrand, “Swedish Pharmacists 
Value E-Prescribing: a Survey of a Nationwide Implementation,” Journal of Pharmaceutical Health Services 
Research, Vol. 1, No. 1 (March 2010). 

210  Health Information and Quality Authority (HIQA), “E-Prescribing and Electronic Transfer of Prescriptions: 

An International Review,” Report, December 2012.  

211  Overview  of  the  national  laws  on  electronic  health  records  in  the  EU  Member  States  and  their  interaction 

with the provision of cross-border eHealth services, July 2014.  

212  http://ec.europa.eu/health/ehealth/policy/network_en . 
213  European Commission Digital Scoreboard 2013 https://ec.europa.eu/digital-single-market/en/create-graphs . 

63 

 
 
 
                                                            
low.214 This is particularly relevant as the number of patients receiving treatment in another 
EU Member State continues to increase.215 

b)  Fragmented infrastructures limit the advancement of health research, prevention and care 

According to Eurobarometer approximately 70 per cent of Europeans (respondents) would be 
ready  to  share  their  personal  health  and  wellbeing  data  (medical  and  care  data,  lifestyle, 
physical activity, nutrition, etc.) and a significant number of them would be willing to support 
scientific  research  to  enhance  treatment  and  early  diagnosis  of  disease216.  Patient  and  user-
generated  health  and  care  data  are  expected  to  further  proliferate  in  the  coming  decade, 
creating  an  opportunity  for  continuously  evolving  and  learning  health  systems217.  Despite  a 
growing  capacity  and  performance  improvements  in  high  performance  computing  and  other 
digital  technologies,  progress  in  translating  these  innovations  into  better  health  outcomes 
remains slow and limited, varying greatly across regions and Member States.218  

Advanced  expertise  on  rare  diseases  is  not  only  scarce,  but  also  scattered  in  different 
laboratories  and  knowledge  centres  throughout  the  EU.  This  scarcity  of  expertise  and  data 
availability translates  into  delayed  diagnosis,  fewer  products  and  difficult  access  to  care  for 
those suffering from rare diseases.219 Faster diagnosis and more personalised treatment of rare 
genetic diseases (it is estimated220 that 5 000-8 000 different rare diseases exist, affecting 27 
to  36  million  EU  citizens)  can  be  achieved  if  scientific  expertise,  data  and  advanced 
computing capacity are pooled across borders, significantly reducing the 5.6 years on average 
that  it takes  today  to  diagnose  a  rare  disease  in  Europe.  Rare  diseases are  ideally  suited  for 
rolling out personalised medicine given high patient buy-in for data sharing and an established 
scientific  and  health  community221  supporting  an  integration  of  research  and  innovation 
pipelines with a secure digital infrastructure to enable the transfer of knowledge from lab to 
clinic  and  feedback  from  healthcare  so  that  research  findings  quickly  get  translated  into 
clinical care improvements. 

214  Cross-border health care in Europe by Katharine Footman, Cécile Knai, Rita Baeten, Ketevan Glonti, Martin 
McKee (World Health Organization 2014). For example, Techniker Krankenkasse surveying 45,000 German 
insurants  who  had  received  services  abroad  in  2010.  The  company  found  that  37  %  of  insurants  required 
follow-up treatment after receiving care abroad, which was mostly provided by a German physician at home 
(92  %).  But  communication  between  the  physician  abroad  and  the  patient’s  physician  at  home  was  rare 
(15 %). 

215  European  Commission  -  European  Core Health  Indicators  (ECHI) based on  the Percentage of  non-resident 

people among all people being discharged from hospital. 

216  Special  Eurobarometer  460  on  "attitude  towards  the  impact  of  digitisation  and  automation  on  daily  life" 

(2017). 

217  In terms of data production, the landscape is changing dramatically – from the amount of data produced, who 
produces it to the way it is stored and used. According to CSC, “experts point to a 4 300 % increase in annual 
data 
http://www.csc.com/insights/flxwd/78931-
big_data_just_beginning_to_explode. 

generation 

between 

2020” 

2012 

and 

218  Blueprint on Digital Transformation of Health and Care in the Ageing Society (Dec. 2016). 
219  The  Council  Recommendation  of  8  June  2009  on  an  action  in  the  field  of  rare  diseases  (2009/C  151/02), 
suggested that the coordination of Community, national and regional programmes for rare disease research 
should be improved. 

220  Source European Commission https://ec.europa.eu/health/rare_diseases/policy_en . 
221  Notably  the  European  Reference  Networks  ,  E-RARE,  IRDiRC  ,  RD-Connect  ,  Orphanet  ,  the  European 

Platform for Rare Diseases Registration. 

64 

 
 
 
                                                            
In 2017, the Commission launched 24 European Reference Networks222, which will provide 
an unprecedented capacity for cross-border collaboration to diagnose and treat rare diseases, 
using  online  consultation  tool  built  with  Connecting  Europe  Facility  co-funding.  They  will 
pool knowledge and expertise, and offer an opportunity for clinical and scientific innovation. 
Further on rare diseases, the Commission has since 2003 supported the Orphanet database, the 
world  reference  now  describing  ca.  6  000  rare  diseases.  It  is  the  major  inventory  of 
information  for  health  professionals  and  patients.  Orphanet  plays  a  central  role  in 
interoperability for rare diseases systems and developing rare diseases codification. 

With  cross-border  movements223  comes  the  spread  of  communicable  diseases  such  as 
influenza,  SARS  and  Ebola.  Freedom  of  movement  means  EU-wide 
tuberculosis, 
coordination  is  necessary  for  early  identification  and  effective  and  sustainable  response  to 
epidemics  and  infectious  diseases  across  the  EU  territory.  The  EU  is  ideally  placed  as  a 
regional  organization  to  protect  EU  citizens  and  Member  States  from  major  public  health 
threats  not  only  by acting  to  prevent  health  threats  spreading  and  providing rapid responses 
when  a  threat  emerges  -  but  also  by  ensuring  that  there  is  a  robust  data  and  computing 
capacity  to  anticipate  and  rapidly  identify  infectious  threats  and  thus  limit  the  spread  of 
epidemics.  

Horizon 2020 funds COMPARE224, a project with a budget of almost EUR 21 million that 
brings  together  key  national  reference  laboratories  from  10  EU  countries.  COMPARE  has 
developed  a  globally  linked  data  and  information  sharing  platform  that  uses  advanced  IT 
technologies to  generate genomic data of infectious pathogens and integrate these  data with 
other  relevant  (clinical,  epidemiological,  demographic,  environmental  etc.)  data.  It  aims  to 
facilitate rapid identification of emerging infectious threats in the human health, animal health 
and food safety domains.  

Personalised medicine225,226,227, informed by health data analytics can lead to drug and therapy 
development that are more effective, with less adverse effects and that can ensure improved 
quality  of  life228.  Physicians  are  increasingly  welcoming  therapies  supported  by  data 
analytics229  which  have  the  potential  to  minimize  trial-and-error  diagnosis  and  treatment, 
benefiting both the provider and the recipient of health and care services.  

Horizon  2020  funds  ELIXIR-EXCELERATE:  an  INFRADEV  project  with  a  budget  of 
EUR  19  million  and  duration  from  September  2015  to  August  2019  to  accelerate  the 
implementation  and  early  operation  of  ELIXIR,  the  European  life  science  Infrastructure  for 

222  http://ec.europa.eu/health/ern/networks_en . 
223  The WHO estimates more than two million people cross international borders each day. 
224  http://www.compare-europe.eu/. 
225  Nimmesgern  E,  Benediktsson  I,  Norstedt  I,.  2017.  Personalised  medicine  in  Europe.  Clinical  and 

Translational Science (http://onlinelibrary.wiley.com/doi/10.1111/cts.12446/epdf).  

226  Council  conclusions  on  personalised  medicine  for  patients  (2015/C  421/03)  (http://eur-lex.europa.eu/legal-

content/EN/TXT/?uri=uriserv:OJ.C_.2015.421.01.0002.01.ENG&toc=OJ:C:2015:421:FULL). 

227  Personalised Medicine Conference 2016 

(https://ec.europa.eu/research/conferences/2016/permed2016/index.cfm?pg=about). 

228  During  2016  the  International  Consortium  for  Personalised  Medicine  (IC  PerMed)  was  established  as  a 
Member  States  led  initiative,  focusing  inter  alia  on  digitalisation  of  health  data  to  support  personalised 
medicine. 

229  The Big Data Revolution in Healthcare (McKinsey and Company), Peter Groves, Basel Kayyali, David Knott 

and Steve van Kuiken (January 2013), 

65 

 
 
                                                            
Biological  Information.  With  41  partners  in  17  countries  this  grant  enhances  existing 
resources 
increases 
bioinformatics capacity and competence across Europe.  

into  a  world-leading  data  service  for  academia  and 

industry, 

c)  Lack of wide-spread adoption of patient-centred digital innovation in response to chronic 

diseases  

Globally, Europe has the highest burden of chronic diseases which are responsible for 86 % of 
all deaths. The World Health Organisation considers the rise in chronic diseases an epidemic 
and  estimates  that  this  epidemic  will  claim  the  lives  of  52  million  people  in  the  European 
Region  by  2030.  Chronic  diseases  affect  more  than  80  %  of  people  over  65  in  Europe. 
Amongst  the  different  chronic  diseases,  mental  health  is  a  real  public  health  challenge;  an 
estimated 18.7 million EU citizens are expected to suffer from dementia by 2050. 

Health  systems'  reforms  aim  at  a  shift  from  a  hospital-centred  system  to  more  home  and 
community-based, person-centred and integrated care structures230. This will allow systems to 
address  more  effectively  the  needs  of  an  ageing  population  and  the  rising  prevalence  of 
chronic diseases. Digital solutions are central to support this shift in health and care provision 
allowing  the  citizen  to  be  actively  engaged  in  prevention  of  chronic  diseases  (active  and 
healthy ageing), adherence to treatments and providing feedback on the quality of health and 
care. 

Digital technologies (e.g., smartphones, tablets, wireless sensors, etc.) that can be employed in 
mobile  health  (mHealth)  surveillance,  prevention,  and  intervention  efforts  have  become 
affordable, easy to use, and widely adopted by users across socioeconomic statuses and age 
groups. When integrated within health and care systems, these solutions can help addressing 
preventable  risk  factors  associated  with  chronic  diseases  (e.g.  unhealthy  diet  and  physical 
inactivity)  supporting  active  and  healthy  ageing,  early  detection  of  symptoms  and  timely 
treatment, thus reducing the need for more burdensome treatments later on (annual savings in 
Europe estimated at EUR 69 billion231). Telemedicine and telecare, for example, can improve 
the quality of life of patients suffering from chronic conditions such as dementia or diabetes 
and  provide  them  with  the  support  they  need  to  live  safely  and  independently  for  a  longer 
period of time while reducing the need for institutionalised care. 

While there are numerous examples of proven digital health programmes across Europe that 
contributed to reduce the prevalence and burden of chronic diseases232 most of them remain 
on a small scale and fail to scale up across Europe, despite the clear benefits they could bring 
to  citizens  and  society.  The  differences  between  the  European  health  and  care  systems,  the 
lack  of  interoperable  solutions  and  low  awareness  by  health  and  care  authorities  of  co-
investment opportunities have been identified as the main obstacles to large scale uptake and 
implementation of digital health programmes to address the chronic disease epidemic.233 

230  WHO Global Observatory for eHealth Series http://www.who.int/ehealth/en/ . 
231  Socio-economic impact of eHealth An assessment report for the European Union (PwC 2013). 
232  The Innovative Practices Repository of the EIP on AHA (2016) https://ec.europa.eu/eip/ageing/home_en . 
233  Synthesis report on the public consultation on the European Innovation Partnership on Active and Healthy 

Ageing (http://ec.europa.eu/health//sites/health/files/ageing/docs/consult_report_en.pdf).  

66 

 
 
 
 
                                                            
EU  funding  of  more  than  EUR  4.6  million  towards  joint  procurements  in  7  countries  for 
innovative health  and  care solutions is  benefitting  more than 5 000 users in  the STOP&GO 
project, done in consultation with industrial suppliers and allowing for opening up major lead 
cross-border markets in Europe. 

4.4. 

Stepping up investments in digital technologies and infrastructures 

Policy Context 

As  with  past  technological  revolutions,  making  the  most  of  the  new  opportunities  whilst 
mitigating negative impacts will require massive investments. At EU level there is a clear case 
for investment into major and systemic projects that will support the rise of digital ecosystems 
in cities, regions and Member States. Building a world-class data economy infrastructure will 
require Europe to invest EUR 500 billion over the next decade. One third of this amount is 
above  current  investment  trends. More generally, the EU needs to  catch up in  a global race 
and  as  EU's  key  trading  partners  (China,  Korea,  Japan  and  US)  are  investing  heavily  in 
digital. This is all the more important that while all Member States are progressing, significant 
differences  still  remain  between  Member  States,  as  shown  by  the  Digital  Economy  and 
Society Index (DESI). 

Under  the  current  EU  Multiannual  Financial  Framework  (MFF),  2014-2020,  several  EU 
Programmes contribute to investments into digital infrastructures and services, throughout the 
different  stages  of  technological  development:  research  and  innovation,  testing,  deployment 
and market up-take. The digital component in the current MFF amounts to EUR 37.4 billion, 
of the total commitment of EUR 1 082 billion between 2014-2020 (this is only 3.9 % of the 
total).  

Over  the  last  programming  period,  the  Research  &  Innovation  (R&I)  investment  for  digital 
increased by 26 %, which corresponds to the overall increase of the R&I programme from the 
Framework Programme 7 to Horizon 2020. This means that the investment share for digital in 
R&I remained stable while the digital economy is becoming bigger.  

In order to maximise the impact of those investments the EU leverages additional public and 
private  funding  through  public-private  partnerships,  thematic  and/or  regional  platforms  and 
hubs as well as through different intermediaries such as banks.  

Under the European Structural and Investment Funds (ESIF) roughly EUR 21.4 billion have 
been allocated to finance the digital sector for the period 2014-2020, of which more than EUR 
6  billion  only  for  high  speed  broadband  roll-out  both  in  urban  and  rural  areas  (see  section 
2.2.8).  As  of  April  2017,  the  European  Fund  for  Strategic  Investments  (EFSI)  related 
investments  in  the  digital  sector  account  for  around  EUR  17.8  billion  (10  %  of  the  overall 
amount of investment mobilised at that date).234   

234  As  of  April  2017  EFSI  financing  of  EUR  3.2  billion  has  triggered  around  EUR  17.8  billion  of  total  EFSI 
related investments into the digital sector. The EFSI investments are intended to trigger EUR 315 billion of 
investment 
is  available  on  http://www.eib.org/efsi/efsi-
in 
projects/index.htm?c=&se=4 . 

three  years.  The 

list  of  projects 

67 

 
 
 
                                                            
The  2016  EU  Semester  exercise  identified  more  limited  bottlenecks  in  investment  in  the 
digital economy with respect to other network sectors like energy and transport. Nevertheless, 
further efforts are needed to reduce investment barriers, at both national and EU level. 

Investments in ICT account for 50 % of all European productivity growth.235 The ICT sector 
represents 4.8 % of the European economy. It generates 25 % of total business expenditure in 
Research and Development (R&D). This EU investment in ICT will support the whole chain 
from basic research to innovation that can deliver new business breakthroughs, often on the 
basis of emerging technologies. The Digital Agenda target of doubling publicly funded R&D 
in ICT between 2007 and 2020 requires an annual growth rate of 5.5 % (assuming constant 
annual growth rate). Estimated public ICT R&D expenditure was below the necessary trend 
line in 2015, with a gap of more than 20 %.236 

The policy framework for the Digital Single Market is of course crucial to incentivise private 
investment.  The  Scientific  Advice  Mechanism  High  Level  Group's  Opinion,  for  instance, 
points  out  to  the  importance  of  investment  in  Cybersecurity  to  reduce  uncertainties  in 
investment  and  conversely  the  importance  of  a  specific  effort  to  reinforce  the  cybersecurity 
industry in Europe.  

An indicative table of EU funding and financing to digital infrastructure and services as well 
as digital skills for the period of 2014-2020 can be found in the annex. 

4.4.1.  Towards a Gigabit society 

Policy Context 

The Digital Single Market Communication highlighted the need to encourage the deployment 
of  very  high  capacity  networks  as  the  backbone  of  the  DSM  while  maintaining  effective 
competition and adequate returns relative to risks.  

What has been delivered? 

Following an extensive public consultation on the need for internet speed and quality beyond 
2020, in September 2016 the Commission adopted a Communication on Connectivity for a 
Competitive Digital Single Market – Towards a European Gigabit Society.237 Building on 
work  to  deliver  the  connectivity  objectives  of  the  Digital  Agenda  for  Europe  (30Mbps 
connectivity  available  to  all  and  subscription  to  100Mbps  connectivity  by  half  the  EU 
households by 2020), the new Strategy sets out a vision for a European Gigabit society around 
three new strategic and complementary connectivity objectives for 2025: 

1) All  main socio-economic drivers such as  schools, universities,  research centres, transport 
hubs,  providers  of  public  services  such  as  hospitals  and  administrations,  and  enterprises 
relying  on  digital  technologies,  should  be  able  to  download/upload  1  gigabit  of  data  per 
second.  This  objective  aims  to  optimise  investment  in  new  very  high-capacity  networks, 
ensuring that such connectivity is installed in priority where it is most needed, i.e. locations 
or  hubs  where  people  gather  to  learn,  work  or  access  public  services  and  where  a  single 
connection provides internet to multiple users. In addition, the roll out of networks which 
offer  Gigabit  connectivity  at  those  points  will  contribute  to  developing  demand  for  such 
connectivity more widely and deepening the reach of the networks supporting it. 

235  https://ec.europa.eu/programmes/horizon2020/en/area/ict-research-innovation 
236  Joint Research Centre's calculations and estimates, based on EUROSTAT data and PREDICT project. 
237  COM(2016) 587 final 

68 

 
 
                                                            
2) All  European  households,  rural  or  urban,  should  have  access  to  connectivity  offering  a 
download  speed  of  at  least  100  Mbps  -  upgradeable  to  gigabit  speed.  In  most  rural  and 
remote areas, internet connectivity can play an essential role in preventing a digital divide, 
isolation and depopulation by reducing the costs of delivery of both goods and services and 
offsetting remoteness. Reaching this objective can also help rural businesses to reduce their 
costs and modern agriculture to benefit from online applications and sensor monitoring. In 
2016,  76  %  of  European  homes  could  already  access  high-speed  broadband  (at  least  30 
Mbps)  and  in  some  Member  States  a  significant  proportion  of  these  households  could 
already  access  networks  capable  of  providing  100Mbps  or  more,  but  rural  areas  still  lag 
behind238. 

3) All urban areas, major roads and railways should have uninterrupted 5G wireless coverage. 
This will allow users and objects 'on the move' to remain fully connected at all times. As 
an interim target, 5G should be commercially available in at least one major city in each 
Member State by 2020. 

The European Regional Development Fund will make it possible to provide more than 14,5 
million households across the EU with a high speed broadband access of at least 30 Mbps by 
2020. In addition the European Agriculture Fund for Rural Development (EAFRD) supports 
investments  in  ICT  infrastructure  and  accompanying  measures  (such  as  training,  advisory 
services and cooperation) with the aim of rolling out broadband to 18 million rural citizens by 
2020. 

European Strategic Investment funds provide a substantial contribution to the achievement of 
EU  broadband  targets.  Projects  under  development  in  the  area  of  Broadband  Networks 
contribute significantly in increasing the broadband coverage in many Member States. As an 
example, the Broadband Network Development in White Rural Areas in Greece (EUR 97 
million) helps close the “broadband gap” between remote and disadvantaged areas of Greece 
and the rest of the country where such services are already available.  

Other  broadband  projects  funded  by  the  European  Regional  Development  Fund  (ERDF) 
include  the  Construction  of  the  Wielkopolska  Broadband  Network  in  Poland,  where  a 
fibre-optic network open for all the operators was designed, built and operates. This project 
won  the  European  Broadband  Award  2016239  in  the  category  of  Innovative  models  of 
financing,  business  and  investment  and  is  an  example  of  public  private  partnership  and  a 
successful mix of managing different financial sources. The  Catalunya Connecta (EUR 30 
million) is an example of a project driven by the regional government in cooperation with the 
local  actors,  with  a  high  impact  on  bridging  the  digital  divide  as  well  as  enhancing  the 
competitiveness  of  the  regional  economy.  The  Net4all  project  in  the  Emilia  Romagna 
region in Italy is the winner of the 2016 EU Broadband award for “Cost reduction and co-
investment”:  a  public  and  private  partnership  (with  co-investing  enterprises)  which  brought 
very  high  speed  connectivity  to  industrial  areas,  based  on  reuse  of  existing  passive  public 
infrastructure and resulting in an open network.  

In  France,  the  project  "Nord-Pas-de-Calais  THD"  aims  to  provide  Fibre  to  the  home 
(FTTH) to over 500,000 households as well as to public and business sites, all located in areas 

238  European  Commission,  The  Digital  Economy  and  Society  Index  (DESI),  2017  https://ec.europa.eu/digital-

single-market/desi 

239  See: https://ec.europa.eu/digital-single-market/en/news/winners-european-broadband-awards-2016  

69 

 
 
 
 
 
                                                            
not  covered  by  the  commercial  operators.  The  European  Investment  Bank  (EIB)  financing 
amounts EUR 147 million out of a total cost of EUR 606 million. 

In  addition  to  the  contribution  expected  from  the  review  of  the  Electronic  Communications 
Code described in section 2.2.8, the Communication outlined a number of areas for follow-up 
action to achieve these objectives. 

4.4.2.  Developing a European Open Science Cloud, High Performance Computing 

and European Data Infrastructure 

Policy context 

The latest technological trends in Big Data, High Performance Computing (HPC) and Cloud 
offer  a  wealth  of  opportunities  for  scientists  to  revolutionise  the  way  they  share  and  re-use 
knowledge and data in all disciplines. To support the digitisation of industry, HPC is a critical 
technology.  It  enables  traditional  computational-intensive  sectors  to  move  up  into  higher 
value products and services. Currently Europe is not fully embracing the potential of data: it is 
not always open, or interoperable, and data structures are fragmented. Yet the demand for a 
world-class HPC infrastructure to process data is surging.  

Expenditure in Europe on cloud services is expected to reach between EUR 24.4 billion and 
EUR 59.6 billion in 2020, as part of EUR 439 billion of total IT spending. However, only 1 
out of the top 10 cloud service providers is based in Europe.240 

The Commission has already made available around EUR 1 billion of funding from H2020, 
including  from  the  High-Performance  Computing  and  Big  Data  Public-Private  Partnerships, 
and from the Connecting Europe Facility instrument. This should leverage a similar amount 
from the private and the public sectors covering the needs of this Financial Framework. This 
does not include investments necessary for demonstrating and testing the performance of the 
HPC and big data service infrastructure facility to a number of compute-intensive industrial 
applications.241 

 Europe  is  leader  in  the  use  of  HPC-powered  applications:  the  users  of  HPC  systems  and 
applications  in  Europe  include  the  most  profitable  and  vibrant  industrial  sectors  such  as 
manufacturing,  oil  &  gas,  or  pharmaceutical.  A  huge  demand  for  HPC  is  also  present  in 
emerging  domains  such  as  health  and  wellbeing;  secure,  clean  and  efficient  energy;  smart, 
green  and  integrated  transport;  climate  study,  monitoring  and  action;  food  security, 
sustainable agriculture, marine research and the bio-economy. While Europe consumes ~30% 
of the HPC resources worldwide, EU industry supplies only around 5%. 

Europe  does  not  have  a  HPC  capability  according  to  its  economic  power.  None  of  the  ten 
leading HPC infrastructures in the world is in the EU. In the world ranking the EU dropped 
from a peak of four machines in  2012. The U.S.A., China, and Japan, are racing ahead  and 
have  declared  HPC  an  area  of  strategic  priority,  with  large  investments  to  develop  HPC 
technology and deploying state-of-the-art exascale supercomputers. Today, the USA has five, 
China two (China has fielded the fastest world supercomputer since 2013).  

240  Enter the Data Economy EU Policies for a Thriving Data Ecosystem, EPSC, January 2017. 
241  COM(2016) 178, p. 12 

70 

 
 
 
 
                                                            
What has been delivered? 

The Communication on the European Cloud Initiative242 proposes actions around 3 axes: 

1) A European Open Science Cloud (EOSC), a federated virtual environment with free at 
the point of use, open and seamless services for storage, management, analysis and re-use 
of research data, across borders and scientific disciplines. 

2) A European Data Infrastructure (EDI), building  a world-class European  infrastructure 
of  HPC  and  data  capability,  and  their  high-speed  interconnectivity,  and  exploiting  the 
potential of quantum technologies. 

3) Gradually  widening  the  user  base  of  the  Science  Cloud  and  Data  Infrastructures  to  the 

industry and the public sector, and building trust. 

The  planning  and  implementation  of  the  European  Open  Science  Cloud  takes  into 
consideration the recommendations of the High Level Expert Group on the EOSC set up by 
the Commission that delivered its first report in October 2016.243  

The Commission already started developing the services of the European Open Science Cloud 
with the integration and consolidation of existing eInfrastructures that will form the basis of 
the European Open Science Cloud services. The initial phase of the European Open Science 
Cloud addresses  issues such as  its governance, its catalogue of services and their uptake by 
scientific  communities, 
to  disciplinary  research 
interoperability  and  connection 
infrastructures244. This initial phase of European Open Science Cloud began with the launch 
of  calls  in  the  Horizon  2020  Work  Programme  2016-2017  and  it  is  considered  to  continue 
support  in  the  next  programme.  The  Commission  is  preparing  a  Roadmap  for  the  European 
Open  Science  Cloud,  which  could  be  annexed  to  the  Commission  Decision  on  the  Horizon 
2020  Work  Programme  2018-2020.  It  would  address  the  issues  of  governance,  funding  and 
rules of participation. It is intended to become a platform for engagement with the Member 
States on the European Open Science Cloud vision.  

its 

From January 2017 open access and reuse of research data became mandatory for all projects 
funded  by  Horizon  2020245,  while  part  of  the  Horizon  2020  budget  is  directed  towards 
supporting FAIR246 data by rendering related costs eligible. The proposed Copyright Directive 
(see section 2.2.4) introduces a new mandatory exception for text and data mining carried out 
for the purposes of scientific research, offering research organisations legal certainty.  

The preparation of the  European Data Infrastructure (EDI) is facilitated through Horizon 
2020  and  the  Connecting  Europe  Facility  (CEF).  The  Commission  launched  several 
initiatives, such as a Public-Private Partnership (PPP)247 for the research and development of 
supercomputers  (EUR  700  million  committed),  and  is  providing  users  with  access  to 

242  COM (2016) 178 final 
243 http://ec.europa.eu/research/openscience/pdf/realising_the_european_open_science_cloud_2016.pdf#view=fit

&pagemode=none 

244  ESFRI – European Strategy Forum on Research Infrastructures has a key role in policy-making on research 
infrastructures in Europe. In particular the ESFRI contributes to the development of a strategic roadmap that 
identifies vital new European Research Infrastructures for the next 10-20 years. 

245   With a possibility to opt-out in justified cases. 
246  FAIR stands for: Findable, Accessible, Interoperable and Re-usable. These are data management principles. 
247  High 

Public-Private 

Performance 

Contractual 

Partnership 

Computing 

(HPC 

cPPP), 

https://ec.europa.eu/digital-single-market/en/high-performance-computing-contractual-public-private-
partnership-hpc-cppp 

71 

 
 
                                                            
supercomputers through PRACE248 and GEANT.249 The Commission is also working in close 
cooperation  with 
the  coordinated  acquisition  of  exascale 
supercomputers (by around 2022-2023) which will rank in the top three in the world. At least 
one of the supercomputers will be based on European technology. 

the  Member  States  for 

Work  is  in  progress  towards  setting  up  an  Important  Project  of  Common  European  Interest 
(IPCEI)  on  "High  Performance  Computing  and  Big  Data  enabled  Applications".  The 
Important Project of Common European Interest is under preparation by Luxembourg, France, 
Italy  and  Spain,  open  to  other  Member  States  to  join,  and  will  include  the  development  of 
industrial applications that need exascale supercomputing and data infrastructures. A study on 
access-to-finance  conditions  was  also  launched  by  the  European  Investment  Bank  for 
European  Cloud  and  High  Performance  Computing  infrastructures  and  services  to  inform 
future decisions.  

The  Commission  is  preparing  for  new  breakthroughs  in  computing  and  networking 
technologies  based  on  quantum  physics.  The  aim  is  to  accelerate  the  development  and 
commercialisation of products and services exploiting the fundamental principles of quantum 
physics  through  the  launch  of  a  new  Flagship  initiative  on  Quantum  Technologies.  This 
would be done in close cooperation with Member States and would require a total investment 
of around EUR 1 billion. First steps for setting-up this initiative started in 2016, the ramp-up 
phase is considered for funding under the Horizon 2020 Work Programme 2018-2020.  

In  respect  of  widening access  to the European Open Science  Cloud and the European  Data 
Infrastructure,  several  actions  are  considered  in  the  context  of  the  Horizon  2020  Work 
Programme  2018-2020:  incorporation  of  commercial  services  into  the  European  Open 
Science  Cloud  to  better  serve  thematic  communities,  offering  big  data  and  computing 
in-demand,  developing  High  Performance  Computing-enabled 
capabilities 
application test beds with industry or the public sector. The Cloud Select Industry Group (C-
SIG) is also being re-tasked to provide industry input. 

to  sectors 

4.4.3.  Building artificial intelligence capacities  

Policy context 

Artificial  intelligence  (AI)  is  fast  becoming  one  of  the  most  promising  technologies  for 
innovation,  e.g.  autonomous  robots  are  increasingly  used  in  factories,  homes,  cities  and 
hospitals.  Commercial  AI  platforms  such  as  IBM's  Watson  have  now  moved  to  real 
applications  in  health  and  environment;  the  automotive  industry  is  developing  autonomous 
vehicles.  

AI-based  systems  can  bring  unique  solutions  to  some  of  the  world's  biggest  societal 
challenges  ranging  from  treating  diseases  and  finding  the  best  cures  to  decreasing  fatality 
rates in road transport and minimising the environmental damage of farming. They have also 
a critical role in preserving security and safety and can accomplish tasks like rescue missions 
that  save  lives  and  protect  environments  and  that  are  impossible  to  achieve  without. 
Moreover, they are one of the key drivers of future productivity growth. 

A recent report estimated that the market for robots and AI solutions will grow to USD 153 
billion  by  2020,  comprising  USD  83  billion  for  robotics  and  USD  70  billion  for  AI-based 

248  PRACE: Partnership for Advanced Computing in Europe, http://www.prace-ri.eu/. 
249  GEANT:  the  Pan-European  network  that  interconnects  research,  education  and  innovation  communities 

worldwide, with secure, high-capacity networks. For more, see https://www.geant.org/Networks 

72 

 
 
                                                            
analytics.  The  Boston  Consulting  Group  estimated  that  the  annual  global  market  for  fully 
autonomous  cars  could  grow  from  EUR  5  billion  in  2025  to  EUR  35  billion  in  2035.  The 
combined  economic  impact  of  the  automation  of  knowledge  work,  robots  and  autonomous 
vehicles is estimated to reach between EUR 6.5 trillion and EUR 12 trillion annually by 2025 
including gains in productivity and benefits in areas such as healthcare or security.  

Despite these huge opportunities, AI is often perceived by citizens as a threat, ranging from 
existentialist  ("AI  could  end  mankind")  to  the  more  concrete  ("AI  costs  jobs").  A  recent 
Eurobarometer survey250 found that 72% of EU citizens think that robots steal peoples' jobs. 
At the same time, almost two thirds of respondents of the same survey have a positive view 
on  robots  and  AI-based  systems,  with  people  having  knowledge  of  robots/AI  exhibiting  an 
even more positive view.  

Advanced robots, autonomous and AI-based systems are capable to understand and interpret 
their  environments  and  act  appropriately.  The  current  regulatory  framework  related  to  the 
liability  for  defective  products,  which  applies  in  the  business-to-consumer  context,  is  under 
evaluation  with  a  view  of  clarifying  whether  Directive  85/374/EEC251  is  fit-for  purpose  for 
covering  damages  caused  to  consumers  by  advanced  robots  which  can  display  varying 
degrees of autonomous behaviour. In particular, the evaluation should investigate and provide 
an  evidence-based  assessment  related  to  possible  problems  or  gaps  that  could  arise  in  the 
context  of  product  liability  rules  as,  for  instance,  the  attribution  of  a  strict  liability  to  the 
producer, the definition of defectiveness based on the lack of safety or the fact that it applies 
only to products. As regards the product safety regulatory framework for these systems, the 
EU  legislation  on  radio  equipment  (Radio  Equipment  Directive  2014/53/EU)  regulating 
among other things aspects on safety and electromagnetic compatibility, allows the possibility 
to  address  in  the  future  any  potential  challenges  related  to  the  interconnectivity  of  robots, 
while  the  EU  legislation  on  machinery  (Machinery  Directive  2006/42/EC)  which  covers 
robots,  is  in  process  of  being  evaluated  with  a  view  to  adapting  it  to  such  new  emerging 
autonomous systems.252 

Europe  needs  to  maintain  its    strong  position  in  basic  and  robotics-related  AI  technology. 
More  than  40  %  of  service  robot  manufacturers  are  based  in  Europe253.  Half  of  the  top  10 
nations  with  the  most  industrial  robots  per  10  000  employees  belong  to  the  European 
Union254. European startups play an important role in AI, robotics and virtual reality. Since 2011, 
the number of deep tech startups founded in Europe has grown by 3.5255.  

Europe  is  particularly  strong  in  a  number  of  AI  technologies  such  as  cooperating  robots; 
speech  and  haptics-based  human-machine  interface;  knowledge  extraction  and  semantics; 
learning; safety; actuation (other than gears); grippers and dextrous hands; locomotion (except 
bipedal locomotion); navigation and collision avoidance; motion and task planning; modelling 
for control (kinematics and dynamics), bio-inspired systems, bionics, and cybernetics.  

250  Special  Eurobarometer  460  on  "attitude  towards  the  impact  of  digitisation  and  automation  on  daily  life" 

(2017). 

251  Council  Directive  85/374/EEC  of  25  July  1985  on  the  approximation  of  the  laws,  regulations  and 

administrative provisions of the Member States concerning liability for defective products 

252  The  EU  relevant  the  product  safety  regulatory  framework  is  complemented  by  the  General  Product  Safety 
Directive 2001/95/EC which regulates safety aspects not already covered by more specific EU legislation.  

253  https://ifr.org/downloads/press/02_2016/Presentation_12_Oct_2016__WR_Service_Robots.pdf 
254  https://ifr.org/ifr-press-releases/news/world-robotics-report-2016 
255  http://www.atomico.com/news/the-state-of-european-tech-2016  

73 

 
 
 
 
                                                            
However,  one  of  Europe's  key  weaknesses  in  the  area  of  AI  is  the  dominance  of  non-
European players in the burgeoning field of AI platforms. IBM, for example, has successfully 
launched  Watson,  Microsoft  has  announced  an  open-source  AI  platform  called  Malmo,  and 
Google  is  making  its  library  for  machine  intelligence,  Tensor  Flow,  also  freely  available. 
Their  competitive  advantage  derives  in  no  small  part  from  the  simultaneous  access  to  large 
quantities of data that can be used to refine the quality of the results. 

In  conclusion, AI is  a  key technology for Europe's future competitiveness. Many, if not  all, 
sectors will be affected. A concerted effort must be made to develop the next generation AI 
platforms  and  underpinning  technologies,  and  to  accelerate  their  take-up  by  businesses, 
industries  and  public  authorities  across  all  sectors  to  ensure  Europe  does  not  become 
dependent  on  non-European  suppliers.  At  the  same  time,  societal  concerns  and  legal  issues 
linked to the development of AI, in particular the need to have adequate safety and liability 
rules have to be addressed.  

What has been delivered? 

Since  2004,  AI  has  featured  in  robotics  Research  &  Innovation  projects  in  the  Framework 
Programme, and basically every funded project in robotics has some AI component. Overall, 
the investment in robotics in the 7th Framework Programme (FP7) reached EUR 550 million 
over the period 2007-2013, increasing to up to EUR 700 million in Horizon 2020.  

AI is a strong focus in Future and Emerging Technologies (FET) with investments of around 
EUR 120 million resulting in around 50 projects. Activities include support for projects in the 
area of situational awareness, machine learning and data mining, for bio-inspired approaches 
(swarm  intelligence),  intelligent  sensors  and  robots,  and  to  investigate  artificial  emotions, 
creativity and consciousness. 

learning  analytics,  semantic 

The  Big  Data  Public  Private  Partnership  also  has  considerable  activities  in  AI,  mainly  for 
deep 
language  understanding  and 
interaction,  decision-making  tools  and  data-driven  learning.  Most  of  these  activities  are 
industry-driven and innovation-oriented.  

technologies,  natural 

Under the Internet of Things area in 2016, a large-scale pilot on autonomous driving with a 
funding  of  EUR  20  million  is  being  launched  with  major  car  Original  Equipment 
Manufacturers and navigation system providers involved. Other Internet of Things large-scale 
pilots such as in agriculture and healthy ageing will also feature AI. 

The  European  Commission  has  launched  a  series  of  calls  for  research  proposals  in  Horizon 
2020  centred  on  developing  Europe's  production  base  in  the  context  of  the  digitising 
revolution.  They  include  in  particular  areas  such  as:  AI  and  flexible  robots;  optimisation  of 
production  flows  using  sensors  and  data  analytics;  flexible,  customised  and  distributed 
production  using  3D  printing;  acceptance  and  training  of  manpower.  The  aim  is  notably  to 
combine  high-performance  and  quality  with  customer  orientation,  productivity,  while 
realising reconfigurable, adaptive and evolving factories capable of small scale production in 
an  economically  viable  way.  It  is  also  to  ensure  social  sustainability  of  manufacturing  by 
integrating  human  skills  with  technology  and  to  ensure  environmental  sustainability  of 
manufacturing  by  reducing  resource  consumption  and  waste  generation.  The  digitising 
revolution is therefore at the heart of this vision, with funding of around EUR 160 million in 
2016 and a  sustained effort foreseen until  2020. The numerous projects which have  already 
been selected in the domain under FP7 and Horizon2020, including under the Factories of the 
Future contractual Public-Private Partnership, cover the whole range of the challenge.  

74 

 
 
A  good  example  of  this  diversity  is  given  by  the  Lean  Intelligent  Assembly  Automation 
(LIAA)  project,  which  mobilises  EUR  10.6  million.  Humans  and  robots  working 
collaboratively on assembly lines can improve worker safety and boost productivity. With this 
in  mind,  the  EU-funded  under  FP7  around  EUR  8  million  for  this  project  to  develop  a 
software  framework for assembly  systems that  merges  the  capacities of humans and robots. 
The  framework  enables  the  use  of  robot  assistants  on  assembly  floors  through  existing 
lightweight  robots  sold  commercially,  inexpensive  sensors  and  open  source  robot  control 
software.  The  workstation  assigns  jobs  accordingly  and  sends  specialised  commands  and 
instructions.  

Through  SPARC,  the  Public-Private  Partnership  in  Robotics,  work  has  been  done  as  well 
already on the ethical, legal and socio-economic aspects of robotics and artificial intelligence. 
Several reports were published, which summarise the current thinking, e.g. on the impact of 
automation on employment.  

4.4.4. 

5G 

Policy Context 

The DSM  Communication and the subsequent  Communication on Connectivity256  underline 
the  importance  of  very  high  capacity  networks  like  5G  as  a  key  asset  for  European  global 
competitiveness.  

Moreover, the digitisation of industry (DEI) package presented by the Commission in April 
2016 reconfirmed 5G as a key technology to serve the innovative digital business models of 
key vertical industries like automotive, healthcare, media, smart factories and energy. 

Project  mmMAGIC257  (EUR  8  165  million  EC  support)  has  paved  the  way  towards 
economic exploitation of new spectrum above 24 GHz, a spectrum region currently not used 
for  mobile  terrestrial  services.  Compared  to  today's  mobile  systems,  the  use  of  such  high 
frequency  bands  will  allow  data  rates  above  20  Gb/s  to  be  supported,  whilst  the  most 
sophisticated version of 4G would not exceed 3.2 Gb/s. This in turn supports the availability 
of  gigabits/s  access  rates  for  single  users  on  wireless  networks,  in  line  with  the  policy 
objectives of the Communication on Connectivity. Results of this project are currently being 
exploited in the context of a pre commercial trial launched in the UK.  

Project  FANTASTIC-5G258  (EUR  7  986  million  EC  support)  developed  new  radio 
technology  that  overcomes  the  disadvantages  of  4G  radio  access,  in  terms  of  poor  spectral 
containment, lack of robustness in highly asynchronous and high mobility scenarios, as well 
as inflexibility for the support of diverse services. The radio technology developed allows a 
more efficient use of spectrum, with more than 20 % spectrum use improvement compared to 
existing  technologies.  This  works  also  forms  the  basis  of  the  submissions  of  European 
industry tow standardisation bodies which have planned to finalise 5G standards by the end of 
2019. 

256  COM(2016) 587. 
257  https://5g-mmmagic.eu/  
258  http://fantastic5g.eu/  

75 

 
 
 
 
 
                                                            
All  projects  implemented  under  the  5G  Public  Private  Partnership  (PPP)  work  together 
towards exploitation of research results, notably with a view to contributing to the overall 5G 
standardisation  roadmap  and  to  the  identification  of  5G  spectrum  and  of  its  technical 
operations and licensing. 

What has been delivered? 

In  September  2016  the  Commission's  Communication  '5G  for  Europe:  An  Action  Plan'259 
proposed  a  set  of  strategic  non-legislative  actions  to  accelerate  preparations  for  the 
coordinated deployment of 5G network infrastructure across Europe.  

Actions related to radio spectrum 

The  Radio  Spectrum  Policy  Group  (RSPG),  which  considers  input  from  the  5G-PPP 
spectrum working group, provides advice on spectrum planning for 5G.  

1) A short RSPG Opinion on the overall strategy and the identification of pioneer bands for 

the initial deployment of 5G services was adopted in November 2016; 

2) A  fully-fledged  RSPG  Opinion  on  the  EU  5G  spectrum  roadmap,  including  assignment 

methodology, is planned for adoption by February 2018.  

In January 2017 the Commission issued a Mandate to the European Conference of Postal 
and  Telecommunications  Administrations  (CEPT)  to  develop  the  technical  conditions  of 
use of 5G spectrum bands:  

1) Early CEPT deliverables on pioneer bands are expected in March 2018; 

2) Final CEPT deliverables on all 5G spectrum bands are expected in March 2019. 

Actions related to the preparation of advanced pre-commercial trials  

The  Commission  has  selected  the  EU  projects  that  will  conduct  the  key  technological 
experiments and initial 5G demonstrators in the context of Phase II of the 5G Public Private 
Partnership (Horizon 2020) and is preparing a call for specifications for Phase III on end-to-
end demonstrators.  

In addition, a number of companies have responded to the call to organise pre-commercial 5G 
trials involving  key vertical industries  (e.g. healthcare, media, smart  factories),  as  set  out  in 
the  5G  Action  Plan.  As  a  result,  a  draft  version  of  the  strategic  EU  roadmap  for  pre-
commercial  5G  trials  was  agreed  between  the  main  promoters  and  will  be  delivered  to  the 
Commission by the end of May 2017. 

Actions related to standardisation 

The Commission has promoted the EU vision for 5G actively through the adoption of public 
positions in relevant events and participation in key meetings of 3G PP. The Commission has 
also  conveyed  its  views  on  standards  through  cooperation  with  international  partner 
administrations, notably of South Korea, Japan, Brazil and China, to support the emergence of 
global 5G standards and globally harmonised frequency bands. 

259  COM(2016)588 and SWD(2016)306 

76 

 
 
 
                                                            
Finally, the Commission manages the monitoring and support activity in the context of its 
general ICT standardisation policy, where 5G is one of the five priorities.  

Actions related to the planned venture financing facility to stimulate 5G innovation and take-
up 

The facility should combine public resources, such as the European Investment Fund (EIF), 
and  private  resources,  such  as  corporate  venture  capital,  to  stimulate  the  new  5G-enabled 
innovation  ecosystems  on  the  edge  of  the  network.  The  feasibility  study  is  expected  to  be 
completed  in  the  third  quarter  of  2017.  Depending  on  the  outcome,  the  Commission  may 
propose any appropriate allocation, or re-direction of EU funding to support the action. 

5. 

THE  DIGITAL  SINGLE  MARKET:  EUROPE’S  MAIN  ASSET  IN  THE  GLOBAL  DIGITAL 
ECONOMY AND SOCIETY 

Policy Context  

Overall, the EU has a strong position on the global digital stage. It is the biggest exporter of 
digital services,  has  enshrined its values,  such as  privacy,  the protection of personal data or 
net  neutrality  in  European  regulations  and  can  count  on  a  dynamic  community  of  digital 
startups  that  are  part  of broader  hubs  across  the  world.  Thanks  in  part  to  the  EU’s research 
and innovation programme, Horizon 2020260, Europe is at the cutting edge of innovation and 
is a leader in digital sectors such as smart cities and networking technologies. However, the 
EU can improve in other areas, such as providing faster connectivity to more of its citizens, 
and fostering the creation of large internet platforms.261  

While the Digital Single Market offers many opportunities for the EU to promote its values 
and interests globally, it also faces a number of challenges on the global stage notably linked 
to the rise of protectionism and diverging values. 

260  The world’s biggest multinational research program 
261  The  EU  the  EU  currently  represents  only  4  %  of  the  total  market  capitalisation  of  the  largest  online 

platforms: the vast majority of platforms originate in the US and Asia. 

77 

 
 
 
                                                            
What has been delivered? 

Protection of personal data 

The  General  Data  Protection  Regulation  offers  a  set  of  flexible  tools  for  the  transfer  of 
personal data from the EU to third countries so that when the personal data of Europeans is 
transferred abroad the protection travels with the data.  

framework, 

the  new  personal  data  protection 

Building  upon 
the  Commission’s 
Communication,  'Exchanging  and  Protecting  Personal  Data  in  a  Globalised  World’262  of 
January  2017,  aims  to  facilitate  cross-border  data  flows  while  ensuring  a  high  level  of 
protection of personal data, both in the commercial sector and in the area of law enforcement 
cooperation. It recognises  that an adequacy  finding  for a specific third country "reduces the 
risk  of invocation  by that  country  of  personal  data  protection  grounds  to  impose  unjustified 
data localisation or storage requirements." Exploring the possibility for an adequacy finding 
with  respect  to  third  countries  that  fulfil  the  legal  requirement  of  an  essentially  equivalent 
level of data protection is thus a strategic priority for the Commission and the Communication 
stipulates a set of criteria to guide the Commission's efforts in this regard. At the same time, 
the  Communication  points  to  the  need  to  monitor  existing  adequacy  decisions  such  as  the 
recently adopted EU-US Privacy Shield. Moreover, the Communication explains the possible 
use  of  the  other  tools  for  cross-border  data  transfers  in  the  General  Data  Protection 
Regulation,  which  can  be  adapted  to  specific  types  of  business  or  processing  operations, 
thereby providing a high degree of flexibility.  

Trade policy 

In  its  Communication  on  "Trade  for  all"263  the  Commission  committed  to  seek  to  use  Free 
Trade  Agreements  (FTAs)  and  the  Trade  in  Services  Agreement  (TiSA)  to  set  rules  for  e-
commerce  and,  if  appropriate,  cross-border  data  flows,  and  tackle  new  forms  of  digital 
protectionism, in compliance with the EU's privacy and personal data protection rules.  

Developing alliances and fostering EU's soft power 

Cooperation  to  develop  the  global  digital  economy  is  one  of  the  main  deliverables  at  EU 
summits  with  its  key  partners.  These  are  prepared  and  further  implemented  through  a  large 
ecosystem  of  ICT  dialogues  and  workshops  on  the  digital  economy  with  inter  alia  Brazil, 
China, India, Japan, Mexico, South Korea and the USA.  

The EU also promotes the Digital Single Market internationally through the G20 & G7. The 
international  dimension  of  Horizon  2020 aims  to  support  EU  research  and  innovation 
excellence  and  our  economic  and  industrial  competitiveness.  By  cooperating  with  our 
strategic partners internationally, the Commission promotes the global adoption of European 
technological  developments  and  market  innovations.  International  research  cooperation  and 
science  diplomacy  remain  the  key  instruments  for  asserting  the  relevance  of  the  EU  in 
research and innovation, and enhancing the role of the EU as a global actor.  

262  COM(2017) 7 final. 
263  COM (2015) 497. 

78 

 
 
                                                            
Standards, spectrum and 5G  

In its Communication on ICT Standardisation Priorities for the Digital Single Market adopted 
in April 2016264 the Commission set out a number of measures to strengthen its presence in 
the  international  dialogue  and  cooperation  on  ICT  standards.  To  meet  objectives  on  global 
interoperability  on  5G  (spectrum,  standards  and  research)  the  Commission  signed  a  joint 
declaration  with  its  counterparts  in  Brazil,  China,  Japan  and  South  Korea  and  cooperates 
closely with the USA and India. 

International  spectrum  convergence  and  harmonisation  is  particularly  important  for  the 
development  of  5G.  The  EU  is  working,  through  the  European  Conference  of  Postal  and 
Telecommunication Administrations (CEPT), to agree on a strong EU position on spectrum in 
the  International  Telecommunication  Union.  The  EU  also  reaches  out  to  its  neighbourhood 
and supports Africa on spectrum harmonisation.  

Startup Europe 

Creating  connections  between  EU  startup  ecosystems  and  other  leading  technology  hubs 
across  the  world  benefits  both  the  wider  uptake  of  the  Digital  Single  Market  policy 
framework and opportunities for European digital businesses. In 2016, Startup Europe started 
its international outreach with partnership activities with Silicon Valley, India and Africa.  

Internet Governance 

The EU has played a major role in ensuring that the UN negotiations preceding the renewal of 
the World Summit Information Society (WSIS) led to an outcome that reinforced the role of 
the multi-stakeholder model in a free and open internet.265  

In  September  2016  the  contract  between  the  Internet  Corporation  for  Assigned  Names  and 
Numbers  (ICANN)  and  the  US  Government,  on  the  supervision  of  the  Internet  Assigned 
Numbers  Authority266  was  allowed  to  lapse.  Up  to  that  point,  the  US  provided  oversight  of 
ICANN's management. From October 2016, that supervisory role became the responsibility of 
the  multi-stakeholder  community,  in  which  the  European  Commission  participates,  together 
with the EU Member States. This was a major success for the long standing position of the 
EU in the area of internet governance, and paved the way to develop a sustainable approach to 
internet  governance  with  the  aim  of  keeping  the  internet  open.  The  Commission  Work 
Programme for 2017 also includes an evaluation and revision of the Regulations establishing 
and implementing the EU trusted domain names. 

New Developments and challenges  

The rise of the digital economy and global trade flows 

Between  2000  and  2015,  internet  penetration  increased  from  6.5  %  to  43  %  of  the  global 
population. In 2015, e-commerce was worth around USD 22 trillion.267 Mobile technology is 

264  COM (2016) 176 
265  Outcome  document  of  the  high-level  meeting  of  the  General  Assembly  on  the  overall  review  of  the 

implementation of the outcomes of the World Summit on the Information Society 

266  IANA –  the  global  worldwide  "allocation"  contract/process  for  IP  addresses  and protocol  assignments  that 

keeps the internet together 

267  UNCTAD, press release July 2016, http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=1281  

79 

 
 
                                                            
used  by  around  4.5  billion  people  around  the  world,  and  digital  solutions  are  powerful 
enablers  of  growth  in  developing  countries.  The  development  of  e-commerce  provides  a 
global  platform  for  European  business  to  access  the  global  marketplace,  expand  their 
consumer base and globally extend their value chain.  

The  importance  of  data  flows  in  global  exchanges  is  also  rising  rapidly268.  Data  flows  are 
emerging as a potential substitute for trade in physical goods, namely thanks to technologies 
such  as  three-dimensional  (3D)  printing.  Between  2008  and  2012,  world-wide  cross-border 
trade in data increased by 49% while trade in goods or service rose by just 2.4%.269 

Promoting EU values 

The  adoption  and  further  development  of  a  comprehensive  and  up-to-date  European 
framework for personal data protection and privacy, guaranteeing free flow of data between 
Member  States  under  the  General  Data  Protection  Regulation  and  the  recent  Commission 
proposal for a Regulation on Privacy and Electronic Communications270, creates a baseline for 
Europe  to  develop  its  external  policy  on  the  global  data  economy.  Promoting  upward 
convergence of data protection principles, through adequacy decisions,  cooperation between 
data  protection  authorities,  bilateral  agreements  and  multilaterally  within  the  Council  of 
Europe,  the  Organisation  for  Economic  Co-operation  and  Development  (OECD),  the  Asia-
Pacific  Economic  Cooperation  (APEC)  or  the  G7/20  will  be  key  to  ensuring  the  trust  of 
citizens  globally.  Strong  cybersecurity  measures  play  an  essential  role  in  protecting  data, 
including personal data and privacy, and the EU promotes such measures in various forums, 
including the Internet Corporation for Assigned Names and Numbers (ICANN).  

Through  supporting  and  promoting  cooperation  between  regulatory  authorities, 
the 
Commission  contributes  to  the  creation  of  stable,  predictable  and  non-discriminatory 
regulatory  environments  which  in  turn  improves  business  conditions  and  market  access  for 
European 
in  Southern 
Mediterranean and EU4Digital: Telecom (EaPReg) with the Eastern Partnership may serve as 
examples for future support actions in Latin America and Africa. The EU is also a member of 
the International Competition Network. 

in  our  partner  countries.  Initiatives 

like  EMERG 

industry 

Another  area  where  gaps  could  emerge  in  the  future  is  related  to  the  approach  towards  net 
neutrality and the open internet. The EU has been at the forefront of defending net neutrality 
and  an  open  internet.  The  transition  of  the  Internet  Assigned  Numbers  Authority  (IANA) 
function from the US government to the multi-stakeholder community and improvements to 
ICANN's accountability procedures should be followed up by continuous development of the 
multi-stakeholder approach both in the EU and internationally. 

Defending EU interest on the global stage 

There is a rising number of takeovers of European companies by foreign investors, resulting 
in a potential loss of control and ownership of strategic technologies. For example, between 

268  McKinsey estimates that cross border flows of capital goods, services and data added an extra EUR 7.4Tn to 
the  global  economy  in  2014,  with  data  flows  representing  EUR  2.6Tn,  slightly  more  than  the  value  of  the 
global trade in goods. 

269  Enter the Data Economy, EU Policies for a Thriving Data Ecosystem, EPSC, January 2017.  
270  COM(2017) 10 final 2017/0003 (COD)  

80 

 
 
                                                            
2010 and 2015, the number of European companies bought by Chinese companies grew from 
91  to  183271.  In  turn,  European  companies  only  bought  20  Chinese  companies,  and  the 
majority  of  European  foreign  direct  investment  (FDI)  in  China  consists  of  new  production 
facilities  that  are  built  from  scratch  (“greenfield  investments”).  The  scope  of  these 
acquisitions  seems  to  be  focusing  on  AI,  robotics  and  micro  /  nano-electronics,  with  the 
acquiring companies mainly coming from the USA and China. 

EU enlargement and neighbourhood policies  

Alignment between EU digital policy and the Digital Single Market is also achieved through 
an  active  policy  towards  the  EU’s  neighbours.  For  example,  through  the  accession 
negotiations  with  the  candidate  countries,  through  ICT  projects  and  cooperation  with  the 
Southern Neighbourhood, or through the more selective approximation with the 6 Eastern 
neighbours272 under the existing Association Agreements. 

Using digital technologies to improve our Development assistance 

Following  the  UN  General  Assembly's  approval  of  the  2030  Agenda  for  Sustainable 
Development273, the Commission proposed in the Communication on a "Proposal for a New 
European Consensus on Development"274 that the EU would focus on mainstreaming digital 
solutions  in  development  as  they  are  powerful  enablers  of  growth.  The  EU  Council  on 
Foreign  Affairs/Development  adopted  conclusions275  on  mainstreaming  digital  solutions  in 
EU development policy and invited the Commission to prepare a Staff Working Document on 
that issue276.  

A strong digital pillar in our development policy can be helpful in accelerating the economies 
of  least  developed  and  developing  countries,  particularly  in  the  EU  neighbourhood.  The 
African  continent,  since  2006,  has  leaped  from  twelve  mobile  subscriptions  per  100 
inhabitants to 80. There are now more households in developing countries that own a mobile 
phone  compared  to  having  access  to  electricity  or  clean  water,  which  have  spurred 
productivity growth and created jobs. In Africa, it is estimated that in 2010 the mobile phone 
ecosystem  employed,  directly  or  indirectly,  nearly  5.8  million  people.  This  corresponds  to 
1.4% of the total African workforce.277  

271  Ernst & Young Report, "Chinesische Unternehmenskäufe in Europa, Eine Analyse von M&A-Deals 2005–
July  2016:  http://www.ey.com/Publication/vwLUAssets/ey-chinesische-unternehmenskaeufe-in-

2016", 
europa/$FILE/ey-chinesische-unternehmenskaeufe-in-europa.pdf (slide 3)  

272  Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. 
273  Transforming our world: the 2030 Agenda for Sustainable Development, Resolution adopted by the General 
on 
2015, 

Assembly 
http://www.un.org/ga/search/view_doc.asp?symbol=A/RES/70/1&Lang=E 

A/RES/70/1, 

September 

available 

UN, 

25 

on 

274  COM(2016) 740 final 
275  Council of the European Union, Council conclusions on mainstreaming digital solutions and technologies in 

EU development policy adopted on 28 November 2016, 14682/16  

276  SWD (2017) 157 final. 
277  GSM Association (commonly referred to as 'the GSMA') is a trade body representing the interests of mobile 

operators worldwide. 

81 

 
 
                                                            
ANNEX: INDICATIVE TABLE OF EU FUNDING AND FINANCING TO DIGITAL INFRASTRUCTURE AND SERVICES, AS WELL AS SKILLS, 2014-2020 

Percentage 
of 
programme 
going 
to 
digital 
4,8  % 
of 
overall  EU 
ESIF  (456,5 
billion)278 

Additional  Member  States  and 
private 
investments  mobilised 
(leverage effect) 

in 

total  211  ERDF 
There  are 
Interreg.) 
36 
(including 
programmes 
and  48  EAFRD 
programmes  with  DSM  related 
allocations.  
Member  States  contribute  between 
15 % and 50 %, depending on type 
of Region and type of Country 
Project selection on-going. 

i. Funding through grants 

EU Programme 

Short 
description 
digital topics funded 

of 

EU contribution  

European Structural 
and Investment 
Funds 
- regional 
- rural development 

Digitizing 
economy, 
public  administration,  e-
skills, 
infrastructures,  e-
inclusion  and  ICT  use, 
health. 

EUR 21,4 billion  

-  of  which  more  than  EUR  6 
billion to broadband  

ESIF  technical  assistance 
budget  (within  ERDF  and 
EAFRD  programmes)  can 
the  Broadband 
finance 
Competence 
Offices 
(BCOs)  at  national  and/or 
level.  The  EC 
regional 
complements 
this  action 
by  financing  a  support 
facility  for  managing  and 

278 https://cohesiondata.ec.europa.eu/overview 

82 

 
 
 
 
                                                            
 
 
 
HORIZON 2020 
grants279 

- FET and e-
infrastructures 
- LEIT 
- Societal Challenges 
(including 
externalisation/external 
agencies) 

assisting  the  network  of 
BCOs. 
Digital  transformation  of 
the  economy  and  society 
societal 
to 
challenges  and  enhance 
EU competitiveness 

address 

~EUR  12  billion  for  ICT  for 
2014-2020, including notably: 

16 % 

-  more  than  EUR  5  billion  on 
Partnerships, 
Public-Private 
including 
Electronics 
Components  and  Systems  (EUR 
1.2  billion),  High  Performance 
Computing  (EUR  700  million), 
5G  (EUR  700  million),  Big  Data 
(EUR  480  million),  Robotics 
(EUR  630  million),  Photonics 
(EUR 630 million), Cybersecurity 
(EUR  450  million  ),  Factories  of 
the Future (EUR 450 million); 

-  more  than  EUR  500  million  on 
Digital  Innovation  Hubs,  out  of 
which  EUR  200  million  have 
been 
till  2016;  an 
additional  EUR  300  million  is 
planned. 

invested 

instance, 

-  EUR  20  billion  of  additional  co-
investment from industry and EUR 
15 billion from Member States and 
regions over 2016-2020 to PPPs. 
For 
industry 
committed  to  invest  three  times 
more  than  the  money  put  by  the 
European  Commission  to  cPPP  on 
cyber  security,  envisaging  in  total 
the investment of EUR 1.35 billion 
between 2017-2020. 

the 

Health, demographic 

-  EUR  1  billion  for  Societal 

Societal 

Challenge 

Health, 

279  According  to  the  Digitising  European  Industry  Communication,  COM(2016)  180  final,  the  planned  activities  in  Horizon  2020,  CEF  and  COSME  and  related  national 

public and private efforts will mobilise close to EUR 50 billion of public and private investments. 

83 

 
 
                                                            
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
change and wellbeing 

Challenge  Health,  Demographic 
Change and Wellbeing. 

Change 

and 
Demographic 
Wellbeing  funding  leverages  an 
estimated  EUR  252.9  million  of 
additional 
from 
(PPI/PCP), 
regional 
Member States (AAL) and industry 
(Innovation  Actions  and  SME 
instrument). 

co-investment 

authorities 

-eInfrastructures  in  Europe  are  co-
funded  by  Member  States,  in  the 
case  of  the  example  GEANT,  co-
financing by National Research and 
Education Networks equals approx. 
55 %. 

- research infrastructures in Europe 
are  mostly  funded  by  Member 
States. 

to  our  scientists 

-  more  than  EUR  890  million  on 
eInfrastructures  to  provide  ITC 
in 
services 
Europe  (e.g.  about  50  Million 
users  in  the  GEANT  network, 
managing  a  traffic  per  researcher 
10  000  higher  the  traffic  per  EU 
citizen) 

-  more  than  EUR  620  million  on 
the  digitization  and  clustering  of 
research  infrastructures  and  the 
management  of  open  research 
data of H2020 projects. 

-Total EC contribution budget for 
H2020 projects in Transport with 
(Joint 
component 
digital 
Undertakings  not  comprised): 
EUR 
(Work 
650  million 
Programme  2014-15  and  2016-
17) 
-  EC  contribution  to  transport 

84 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Smart, green and 
integrated transport 

Secure, clean and 
efficient energy 

- Automated road 
transport, Logistics, Road, 
ITS, Urban Mobility, 
Safety, Waterborne, 
Aviation 

Societal Challenge Energy 

34  %  of  the 
total 
EC 
contribution 
budget 

for 

their 
Joint  Undertakings 
digital  components  (2014-1027): 
EUR  70  million  (Shift2rail)  plus 
EUR 300million (SESAR) 

-  Projects  supported  under  the 
Societal  Challenge  Energy  also 
address  the  use  of  ICT  in  the 
energy  sector.  Between  2014-
2016, more than EUR 130 million 
has  been  dedicated  to  energy 
projects  contributing  to  the  DSM 
strategy.  The  Energy  work 
programme 2018-2020 foresees 4 
substantial  joint  topics  with  the 
ICT  programme  part 
(jointly 
targeting  ICT-related 
financed) 
issues for the energy sector. 

Combined  budget  of  EUR  30  M 
for 2016-2017 for these activities.  

Smart, 
integrated transport 

green 

and 

connected 

- 
and 
Automated  road  transport, 
Logistics, 
Infrastructure, 
Urban  Mobility,  Safety, 

34  %  of  the 
EC 
total 
contribution 
budget 

85 

23  million 

EUR 
of 
cofinancing  of  H2020 
projects, 
leverage  effect 

direct 
funded 
the 
for  which  no 

notwithstanding 

 
 
 
 
 
 
 
 
 
 
 
EUR 30 million  

complete data is available 

Food security, 
sustainable agriculture 
and forestry, marine 
maritime and inland 
water research and the 
Bioeconomy (SC2) 

Aviation, 

Waterborne, 
Rail 
Horizon 2020, through the 
synergies between SC2 
and Climate Challenge and 
ICT parts of the 
programme provides 
funding for several digital 
related activities, e.g. 
Robotics Advances for 
Precision Farming, 
observation systems or sea 
and soil integrated 
observation systems 

IoT Large Scale Pilot in 
funding on Smart Farming 
and Food Security 

Inclusive, innovative 
and reflective societies 
(SC6) 

ICT enabled open 
government  
(eGovernment) 

Connecting 
Facility 

Europe 

Digital 
Service 
through 
Infrastructures, 
building  blocks,  that  can 
be  used  for  services  in 
eGovernment, 
eProcurement, 
eHealth 

eIdentity, 

EUR  240  M  including  the  Large 
the  Member 
Scale  Pilot  with 
in  view  of 
States'  authorities 
'Once  Only 
the 
implementing 
Principle' at European level 

EUR  1  Billion  in  total,  out  of 
which 

3.3 % 

86 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- Telecoms 

Europe 

Creative 
MEDIA 
subprogramme 

support 

MEDIA 
competitiveness 
adaptation  of 
industry to the DSM..  

the 
and 
the  AV. 

European Social Fund  Enhancing 

use 

the 
and 
accessibility, 
quality  of  information  and 
communication 
technologies 
disabled 

the 

for 

Member  States  contribution  for 
cross-border 
services 
infrastructure amount to at least 25 
%. 

digital 

MEDIA 
complements  Member 
States  significant  investment  on 
AV  policies,  estimated  at  over  2 
billion per annum.  

Approx.  8% 
of  MEDIA  is 
devoted 
to 
digital 
promotion  of 
EU works. 

-EUR  770  million  for  cross-
border 
services 
digital 
infrastructure. 
For  instance  EUR  33  million 
related  to  cybersecurity  (2014-
2017);  EUR  30.1  million  related 
to  Digital  Service  Infrastructure 
(ePrescriptions, 
for 
ePatient  summary  and  European 
Reference Networks (ERN) (2015 
-2017) 

eHealth 

-€120  million 
for  WiFi4EU 
initiative  (pending  approval  from 
Council). 
the 
EP 

and 

Creative  Europe  has  a  budget  of 
EUR  1.56  billion  in  2014-2020. 
The  MEDIA  sub  programme 
accounts  for  at  least  56%  of  the 
budget.  

2.3  billion  €  overall  (digital  part 
not specified) 

87 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ii. Financing through financial instruments 

EU Programme 

Short 
description 
digital topics funded 

of 

EU contribution  

European Fund for 
Strategic Investments 

Horizon 2020 financial 
instruments (through 
banks and other 
intermediaries) 

high 

Next  Generation  Access 
speed 
networks, 
broadband,  4G  mobile 
network,  digitalisation  of 
the  bank  sector,  on-line 
sales,  health 
life 
sciences sectors 

and 

InnovFin 

- 
financial 
instruments, a coherent set 
of  financial  products  co-
developed  with  the  EIB 
Group  (EIB  and  EIF)  and 
the 
implementation 
for 
complementing 
latter, 
grants,  over 
the  entire 
value  chain  of  research 
and  innovation  in  order  to 
support  investments  from 
the  smallest  to  the  largest 

EUR 3,2 billion (amount of EFSI 
the 
financing  approved  under 
Investment 
Infrastructure 
Window  (IIW)  and 
the  SME 
Window  of  EFSI  contributing  to 
the digital objectives) 

and 

EUR 1 billion has been approved 
for broadband related projects   

EUR  2,61  billion:  overall  budget 
foreseen  (as  at  31/12/2016)  for 
the 
total  programming  period 
(digital part not specified)  

88 

Additional  Member  States  and 
private 
investments  mobilised 
(leverage effect) 

Percentage 
of 
programme 
going 
to 
digital 
10 % (so far)  EUR  17,8  billion  (estimated  total 
related investments triggered by the 
3,2 billion of EFSI financing) 

EUR  3.2  billion  (estimated  total  
related investments triggered by the 
1 billion of EFSI financing). 
EUR  25,75  billion  of 
loans, 
guarantees  and/or  equity  financial 
products  overall:  target  for  the 
entire  period  of  the  programme, 
covering InnovFin Equity (H2020), 
Innovfin  guarantee  (H2020)  and 
R&I  H2020 
(digital  part  not 
specified)  

 
 
 
 
 
 
 
 
 
 
 
 
enterprise 

InnovFin 

- 
Guarantee 

SME 

Innovfin 

- 
for  Equity 
(SME and small mid cap)  

- Innovfin for large project 
and midcap 

Investments  into  venture 
capital  and  private  equity 
funds  which  have  a  focus 
further 
ICT 
on 
specified) 

(not 

COSME Financial 
Instruments, Equity 
Facility for Growth 
(EFG) 

CEF Broadband 

Broadband  deployment  in 
less  dense  areas  between 
2017 and 2021 

-  EUR  15  billion  of  loans  and/or 
guarantees for innovative small and 
and 
medium-sized 
small 
including 
innovative  ones  (digital  part  not 
specified) 

enterprises 

mid-caps, 

- ICT is 40 to 
50 % 

- ICT is 15 to 
20 % 

latest 

Per 
reporting 
date  77  %  of 
EFG 
all 
commitments 
went  to  ICT 
oriented 
funds 

100 %   

Expected  leverage  of  operations 
financed to date is about 8 (i.e. for 
every  1  Euro  invested  under  the 
EFG it is expected that EUR 8 will 
be  invested  in  SMEs  in  the  ICT 
sector) 

Connecting  Europe  Broadband 
fund: EUR 500 million from public 
and  private  sources.  It  is  expected 
to  trigger  additional  investments 
amounting  to  EUR  1  billion  to 
EUR 1.7 billion. 

EUR  78  155  470  (accumulated 
budget 
the 
beginning  of  the  programme  to 
ICT funds) 

committed 

since 

EUR  130  million  for  broadband 
infrastructure,  out  of  which  EUR 
100  million  for  the  Connecting 
Europe  Broadband  Fund  (equity 
and  quasi  equity)  and  approx. 
EUR  30  million  for  CEF  debt 
cross 
instrument 
sectoral 
transport  and 
instrument  with 

(a 

89 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
energy) 

Creative Europe  
Culture and Creative 
Sectors Guarantee 
Facility  

To  enhance  the  access  to 
finance  of  SMEs  in  the 
creative 
and 
cultural 
sector,  operational  as  of 
2016. 

EUR  121  million  in  total  for 
2016-2020  (with  no  current  split 
between 
of 
media/digital/cultural available) 

funds 

Leverage  effect  is  expected  to  be 
5.7  with  the  investment  objective 
of EUR 600 million by 2020  

90