External study advises EC over 'patchwork' online regulation
Author: Magnus Franklin
13 Oct 09 | 10:52 GMT+1
IN BRIEF
The European Commission is today discussing behind closed doors a legal opinion which describes the online single market as 'patchwork,' and offers guidance on where action is needed. On net neutrality, it suggests regulatory intervention only on an ad hoc basis, while copyright needs a 'fundamental reform.'
The European Commission is today discussing behind closed doors a legal opinion which describes the online single market as 'patchwork,' and offers guidance on issues such as net neutrality, copyright and e-commerce.
The report, which is over 400 pages long, has been compiled by law firm DLA Piper, and is linked to an economic analysis on the topic published in July by Berlin-based consultancy DIW.
It looks at the current legal instruments available to the commission, including the directives on copyright, e-commerce and data protection, as well as forthcoming legislation such as the new regulatory framework for telecoms, and identifies gaps where further legislation or changes to the existing rules may be needed.
One of the overall conclusions of the report is that many of the current rules governing the online marketplace are inadequate or outdated, either because they were created before the ubiquity of the internet was envisaged, or because they were designed in a rigid manner that is unable to cater to the changes in business models such as those triggered by the so-called web2.0 - collaborative and multilateral transactions where the transfer of data is fluid and difficult to establish.
For example, the report states that excessive formalism and differentiation between online and offline rules "can be understood as the reaction of a legislator who had 'cold feet' to regulate in unknown and fast-evolving territory, and who did not trust the new digital environment."
"The current legislative framework could therefore be described as a patchwork, where some rules are missing, other
rules are overrepresented; some rules overlap with each other, and still other rules seem to contradict each other," the report sets out in its introduction.
The report also offers some detail on certain sensitive political issues. For example, on the issue of net neutrality, the report concludes that regulators should only intervene when the actions of access providers are discriminatory or harmful for competition or innovation.
It also recommends any intervention should be based on current telecoms regulation unless infringements become persistent, in which case principles around net neutrality should be passed into law.
On copyright, the report concludes that "a fundamental reform has become necessary" as the current legal instruments are insufficient. For example, the list of exceptions and limitations to the exclusive rights of authors doesn't fit with the online environment, whilst not being technology neutral.
As a result, copyright owners face piracy and a fragmented market, whilst users face a list of exceptions and limitations on the use of content that is confusing and not adapted to daily life.
The draft has been presented to the commission at a crucial time, when it is in the process of a fundamental overhaul of many of the rules governing online transactions. It has just closed its catch-all consultation on the digital agenda that is designed to guide the online policy of the next commission, with over 400 responses received.
It is also widely acknowledged that tackling issues such as territorial licensing of copyright material and creating a single internal market for e-commerce will be a difficult and controversial process.
The thorough analysis presented to the commission should help in steering its thinking on these issues, though its conclusions will almost certainly be challenged and revised during the course of the commission's work on these issues in the years ahead.