Kaja Kallas: Digital Single Market report gets go-ahead from Committees

Kaja Kallas

This Monday (14.12) the IMCO/ITRE joint committee voted on my report on the Digital Single Market. All my comments on it are in the following article that was published in EurActiv.

Voting on the report on Monday (14 December)

Members of the European Parliament backed Uber-type companies in the heated debate about the sharing economy, calling on regulators to encourage their development in Europe.

Two parliamentary committees – on Industry, Research and Energy (ITRE) and on the Internal Market and Consumer Protection (IMCO) – jointly adopted their position on the new Digital Market Strategy (DSM) late on Monday (14 December).

The text, adopted with 80 votes in favour, six against and three abstentions, is “quite pro-sharing economy”, said the rapporteur, Estonian MEP Kaja Kallas (ALDE). “It is a good achievement that the report is pro-innovation,” she told EurActiv.

Kallas admitted that the sharing economy was one of the most controversial issues during the debate on the report that will be voted on in the Parliament plenary session in January. But following a “tough” round of negotiations, she claimed to have won support from all the political groups.

New forms of employment

The text “welcomes the increased competition and consumer choice” brought by the collaborative economy, which according to MEPs, includes “a more inclusive job market”. The report “urges the Commission and member states to support the further development of the sharing economy by identifying artificial barriers and relevant legislation hindering its growth”.

The “biggest difference” and issue of contention between the political groups resided in the new forms of employment brought by companies like Uber or AirBnB. While some MEPs consider self-employment as precarious, Kallas underlined the new opportunities brought by these new firms which “allow you to work when you want”.

MEPs reached a compromise by underlining that employment and social policies should be adapted to the sharing economy, by including “more flexible forms of employment” while ensuring that “existing employment rights and social welfare schemes can also be maintained in the digital world”.

“Everybody agrees that employment relations need to be modernised,” Kallas stressed.

However, she found “quite strange” an amendment supported by the leading political groups, including the centre-right European People’s Party (EPP), warning against the risk of ‘burnout’ caused by permanent connectivity and mobile phone availability in the realm of the sharing economy.

Diverging views in the Commission

The Parliament’s unified position in favour of the sharing economy contrasts with the views held inside the European Commission and the member states.

As part of the internal market review, Commissioner Elżbieta Bieńkowska said in October that the executive did not intend to regulate this new sector. Instead, the Polish Commissioner and her superior, Vice-President for Jobs, Growth and Investment, Jyrki Katainen, called on member states to avoid restrictions on the development of these promising firms.

“It would be very sad if Europe was the only continent which denied new business models and this would lead to bad situations in terms of jobs and economic growth,” Katainen said.

However, EU sources told EurActiv that the issue is far from being settled in the executive. Echoing concerns related to workers and consumer protection and taxation, some Commission directorates-general, including the ones for Transport and the one on Justice and Consumer Affairs, consider that new guidelines on how to interpret EU rules are not enough. They insist that further norms are needed.

The difficulty in reaching consensus on the sharing economy is echoed in member states like Spain. The Iberian country is one of the most restrictive nations when it comes to the collaborative economy―Uber is banned in the whole country, and AirBnB operates only under strict conditions in some regions. However, the national regulator is a staunch defender of the sharing economy, and is pioneering a report on the topic.

Moreover, Spanish ministries are far from holding a common view on this issue. While the Ministry of Public Works sympathises with the complaints of traditional service providers, such as taxi drivers, the Ministry of Economy is seen as more supportive of the sharing economy.

Pro-online platforms

The debate on the sharing economy is part of a wider discussion at EU level on how to deal with online platforms. MEPs are also wary of introducing further legislation to limit the growing influence of companies such as Google, Amazon or Apple.

The report stressed that the European Commission should examine whether the concerns raised so far could be resolved by “proper and full implementation of existing legislation”, including the consumer rights directive and effective enforcement of EU competition law. Moreover, lawmakers called on the Commission to maintain an “innovation friendly policy towards online platforms that facilitates market entry and fosters innovation”.

In MEPs’ eyes, the top priority is to ensure transparency and non-discrimination between platforms, while allowing users to switch easily between them. Ultimately, they believe this should address potential barriers for the emergence and scale up of platforms.

The executive launched a public consultation on the regulatory environment for platforms and online intermediaries in October. It warned that further regulation could be required due to the numerous concerns related to the collection and use of private data by such companies, their market strength and their bargaining power.

Kallas said that, in general, she is “happy” with the result of the agreed position on the DSM, as it includes all her priorities for the DSM roadmap, such as e-government, cybersecurity, the harmonisation of spectrum and the issue of online platforms. After almost 60 compromise amendments, and more expected before the plenary vote, she hopes the full chamber will back her text in January.


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