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Consumer Summit, 1-2 April 2014

NEW DEALSConsumer driven innovation enabled by the digital technologies

Werner Stengg

A. Seven online trends/statements

1. An online/internet strategy is needed2. Online is offline3. Online is a revolution (not a trend)4. Online is an opportunity for the single market5. Online is a threat to the single market6. The consumer is the new superpower7. Faust: I give you power, in return for your soul

B. Policy implications/options

SETTING THE SCENE

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1. An online/internet strategy is needed

IN THE SHORT TERM:How to adapt historically grown offline policies and structures to the online world?

IN THE MEDIUM TO LONG TERM:What is our policy vision for the digital age? Should we have an online/ internet strategy for the SM?

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2. Online is offline

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3. Online is a revolution, not a trend

Shares a video with friends

Journalist, writing a review

Buys or sells ticket for next concert

Googles for next concert date

Praises or criticises concert on Facebook

(Enjoy the concert)

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And our "old" narrative still works:

• The Single Market is good (overall). (WELFARE)• Online is good (overall). (GROWTH, OPPORTUNITIES)• Online makes the Single Market a reality. (INFORMATION, POWER)• Online renders single market obstacles more visible. (PARTICIPATION,

TRANSPARENCY)

4. Online is an opportunity for the single market

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So let us address remaining obstacles:

• Regulatory fragmentation (consumer, data, taxation, labelling, etc.).• Payment.• Delivery.• VAT.• Article 20(2). Territorial supply constraints. Platform bans. New forms of

differentiation/discrimination in the online environment (e.g. IP tracking).• Copyright.• Infrastructure (broadband, radio spectrum, cloud, net neutrality,…).• Information (SMEs, consumers)• Fair search. • Inter-operability for business (e.g. internet of things) and consumers (e.g. e-

books, apps,…).

4. Online is an opportunity for the single market

Compare: 2012 Communication/Action Plan for e-commerce & online services!

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Online threatens traditional business models:

o Bricks-and-mortar retailers.o Content industries (music, books, film, TV,…).o Brands.o Intermediaries (travel agents,…).o Postal operators (e-substitution).o Etc. etc. etc.

5. Online is a threat to single market policy

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• Online may also have adverse social and societal effects:

o Public debate about vulnerable jobs in large warehouses.o Some parcel operators paying lousy "wages".o Threats to local jobs, local supply, city centres,…

• Consequence: Increasing calls for "protection":

o Create "level-playing field"o Treat online and offline in the "same" way ("equivalent" way)o Risk for single market? (Mutual recognition?)

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UPERCONSUMER

6. The consumer is the new superpower

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THE EMPOWERED CONSUMER…

….OBTAINS, CREATES AND SHARES INFORMATION.

S/he:

• COMPARES offers (even if not offered to him/her).• BUYS where s/he wants. (Ok, there is also Article 20(2))• COMMUNICATES (e.g. views on products/companies).• SHARES what s/he owns (e.g. music, cars, houses,…).• CONSUMES - even if not allowed to (e.g. gambling, content,…)

Caveat:

• Fair search.• Gatekeepers to information.• Possible abuse of information about consumer.

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WHO "SUFFERS" FROM THE EMPOWERED CONSUMER…?

• COMPANIES find it more and more difficult :

o to satisfy constantly rising consumer needs and expectations (e.g. "free delivery") – especially if they are small

o to CONTROL where and how their products/services are sold and consumed (e.g. IPR, Article 20, vertical restraints)

• GOVERNMENTS find it increasingly hard to protect their companies (from competition), their citizens (from gambling),…

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7. The Faustian Pact: "I give you power, if you give me your data"

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POLICY OPTIONS?

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1. DO NOTHING

The online revolution cannot be reversed

Whatever we do (promote or protect), online will grow.

Main drivers:

CONSUMERS. (Because they WANT it.)

BIG (ONLINE) COMPANIES. (Because they can DO it.)

TECHNOLOGY. (Because what CAN be done, WILL be done.)

2. DO MORE OF THE SAME

Eliminate remaining obstacles.

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3. SUBSTANTIAL OVERHAUL OF REGULATORY FRAMEWORK

• Licensing for Europe• New data protection regime• [Adapt postal USO to new communication needs]• More harmonisation?

4. FLANKING AND/OR PROTECTIVE MEASURES

Protect:• Traditional business models (e.g. book stores)• Small business (SME)• Competition (against abuse of dominant positions/monopolies)• Employment and workers• Consumers

o from sellers (consumers protect one another)o from oligopolistic/monopolistic structureso from data abuseso from each other (peer-to-peer selling, renting, borrowing,…)

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"New deals"

Key discussion themes:• Key trends. Added value for consumers.• Main challenges (for business and consumers)• Best options to address challenges.Panels:• Digital technologies as enabler for consumers.• Consumers driving innovation & creating new

and better deals themselves.