While the European Union has removed the need for physical borders between member states, digital borders still remain. You may not need a passport to cross into some European countries, but if you try to purchase products online from one while residing in another, it is not so easy.

Digital goods, such as streaming music and TV are also blocked by "digital borders", while copyright rules and intellectual property are also difficult to enforce in different countries.

The European Commission is pushing to implement a Digital Single Market which will create a set of standards for trading goods online across member states, estimating it will add £375 billion per year to the EU economy.


Being able to stream your favourite TV show while abroad or purchasing a dress at the same price point offered in your neighbouring country are all positive for consumers, but there are further business benefits to implementing a Digital Single Market.

While US-based tech companies like Google or Uber continue go from strength to strength, politicians are arguing technology companies from European countries can't compete until they have a level playing field across the Union which will allow them to grow.

Speaking at an event at Europe House in London last week, MEP, Vicky Ford, noted how the UK has one of the most digital enabled economies in the world, but businesses wanting to trade across the EU are faced with disparate rules and regulations which make it difficult to do so.

"It's the idea you're trying to remove 28 different sets of rules and make it easier for a UK company to take themselves across all of Europe," she explained.

"We want to find solution which works for businesses and consumers – that's why we’ve ended data roaming. But when you're on holiday you should be able to access the music you thought you had paid for in the UK.

"But we've got to do it in a way that works," she added, noting how the change in VAT rules to make tax collecting easier from big companies was not a perfect solution. "It was a massive hit on small companies having to effectively register for VAT in 28 different countries."

She added: "We have to help both big and small companies to remove legislation and unnecessary paperwork. But the economies of scale are vital. Europe is very good at technology with seven UK companies hitting their billion dollar valuation, but we need to make sure there are more of those for small companies to scale up while keeping them in Europe as well."

Data concerns

The EC delivered its Digital Single Market strategy in May, outlining 16 steps it hopes to deliver by the end of 2016. These are currently in consultation, where issues like cross-border parcel delivery and geo-blocking will be discussed by MEPs.

The key to the consultation is balance. In the discussion at Europe House last week, the word ‘data’ kept coming up. In order for digital to grow participants discussed how the industry needs to reiterate the positives of data sharing despite the increasing fear of online data breaches.  

Matthew Fell, director for competitive markets at CBI, said he is worried about the data debate and its downsides. "Data does enable all the fantastic things we enjoy about the internet and the digital age."

Of course, data needs to be carefully looked after, and when you have big corporates like TalkTalk loosing customer data due to teenagers hacking from their bedrooms, it is not surprising the public has little faith.

Damian Tambini, associate professor at the London School of Economics, said: "If you’re trying to get people to put things in the cloud and share their data more, you also need to take into account big data needs big protection."


Another aspect being discussed by MEPs during the consultation period is concerns around unjustified geo-blocking, for instance blocking certain people from accessing foreign websites using IP-addresses.

The EU claims "unjustified geo-blocking and other forms of discrimination based on nationality or place of residence are clearly contrary to the principles of the EU Treaty" by limited consumer access to cross-border offers, such as a company selling a dress at a different price to different incoming nationalities.

But Ford said geo-blocking is not a simple 'black and white' discussion. She described a justified use of geo-blocking would be a small local butcher who has a website to sell product locally but cost restraints mean it is unable to package and ship meat across the entire EU. "And now he has to sell sausages to 28 different countries – it's justified when they can't sell fresh product and can't get it delivered," she said.

"It's not clear at the moment what is and isn't justified geo-blocking," she added.


Infrastructure is the next big challenge to overcome. While the opportunities sound beneficial, they are redundant if the infrastructure does not exist to support the growing digital economy in the future.

Ford said the digital world is moving so fast it is difficult to know where to invest money into building infrastructure to support it. For instance, the introducing of a 5G mobile network in the UK is thought to happen around 2020, but there is always a concern that the next generation network will not be fast enough to support the digital world of the future.

CBI's Fell added: "You can’t go far enough and fast enough on boosting the infrastructure with faster speeds. If you are using the internet as a sales channel there are eCommerce barriers, so knocking them down would be a helpful start."

Essential eCommerce explains more about the Digital Single Market on the Innovation Blog. Click here to read more about the intended timeline and political processes.