Completing the Digital Single Market: proposals set out by UK Government.
David Cameron’s office published "The UK Vision for the EU's Digital Economy" earlier this week. This is a set of proposals for finalising the EU Digital Single Market, which they say could create €250 billion in growth.
This is one of the biggest areas of discussion in Europe right now. In his "Agenda for Jobs, Growth, Fairness and Democratic Change", European Commission President Jean-Claude Juncker put "A Connected Digital Single Market" as the second of his ten priorities for action. On this one priority Juncker has set out six objectives for change, covering copyright, data protection, telecoms rules, consumer rights, corporate governance, and digital skills.
The vision set out this week by the UK government will therefore form the starting position for the UK in the high-level negotiations that are taking place this year on this high-profile agenda. We can expect discussion of major changes to regulation to take place on all these areas over the next few years. By covering such a broad range of extremely important areas of regulation, these proposals could therefore have long-term impacts on the games industry in all parts of its business.
I have set out headlines from the proposals below, and it is well worth games companies reading the full proposals. Ukie will be actively engaging with the UK and EU governments, in partnership with our fellow games industry representatives from across Europe and with our colleagues in the rest of the UK creative industries. We want to hear from all parts of the games industry about how these proposals could affect your business, both positive and negative, so we can be sure we are representing the entire industry in our conversations with government. If you have thoughts you would like to share, please email our policy officer Andy or join in the conversation we have started on our members forum.
Some of the key issues are:
The UK government call for the completion of the Data Protection Regulation discussions which have been underway since 2012. They stress the need to give consumers confidence about control of their data, to make sure that companies will be able to innovate with new data-based services. Through our membership of ISFE (the Interactive Software Federation of Europe), Ukie have been involved throughout these negotiations in Europe and will continue to do so as they come to a conclusion this year.
This is another area that has long been under discussion at EU level. Ukie have again been closely involved through ISFE; the latest position paper on the Telecoms Single Market, which contains a games industry position on net neutrality in the EU, is available here. Ensuring an open, well-functioning and competitive telecoms market is vital to the future of the games industry, and we will continue to work to ensure this is not threatened by inappropriate regulation. It is good to see the UK government acknowledge the need to "not be too prescriptive" in this area.
One of the potentially more controversial proposals in the vision is for total portability of content across the EU, including more harmonised pricing between EU countries. They argue that consumers "should be able to buy online content not easily accessible from a home provider" and that "prices for digital products and services should not change unfairly on the basis of where consumers come from in the EU". This would require major changes to copyright licensing practices for some industries, and potentially significant changes to EU copyright law itself. This is likely to be one of the most argued-over parts of the whole package. Ukie will ensure we take a close part in all discussions around this, and that games industry business models are considered throughout.
Open Data and Copyright
Another aspect of copyright is addressed with regard to open data. Alongside a call for the rest of the EU to adopt the G8's Open Data Charter, the paper proposes that copyright exceptions for research, education and text and data mining be adopted across the EU. This is another potentially significant change to existing copyright law, which will again be hotly debated. Ukie will continue to ensure that games industry business models are considered throughout these discussions.
The Vision proposes "a common set of consumer rights tailored to the purchase of digital content". The Consumer Rights Bill currently being passed in the UK Parliament introduces specific consumer rights for digital content, so it seems the UK is proposing that other EU countries should adopt the same rules.
Ukie has been closely involved in discussions of the Consumer Rights Bill since its inception, making sure that some dangerous proposals were not taken forward and that games industry business models will not be disrupted. Our submission to the original consultation on the Bill is available here. Whether we would support the further spread of this approach, when the rules are not even in place and being tested in the UK, is something we need to discuss closely with the industry.
A single EU point for business registration, VAT registration and similar issues is proposed in the paper. This sounds potentially beneficial for games businesses. However we need to gather thoughts from companies on how it would practically affect them.
The VAT rules for cross-border purchases within the EU changed on 1 January 2015 (some guidance for games companies available here). There is a lot of concern about how this will put an administrative burden on games businesses selling digital content in the EU. To try to overcome part of this problem, the UK have proposed a VAT threshold for cross-border digital purchases, to further protect micro-businesses. Again this sounds like a proposal that may be beneficial to games companies but we need to gather more evidence.
Again, we need to hear from games companies about how these different proposals would affect your business. Please get in touch either on our forum or by email, by the links above, with any thoughts you have.