Digital Services Act the first step towards a digital community market

Today Europe’s situation on the theme of digital is at a turning point and the open discussion around the Digital Services Act proves it. From their early stage of their installment, the new commission had made clear that the digital world with all its subcategories, e-commerce in the first place, was no longer a theme to be part of their primary agenda. However, it was the Covid that revealed this topic’s centrality and strategic importance.

Infact, the new dossier by the Commission shows a series of provisions that had already been in place. For instance, the protection of data and privacy of the European user with the GDPR or the guarantee of transparency in favor of consumers thanks to geoblocking, a measure came into force at the end of 2018, which guarantees the right to have a full view of the prices of a commodity in the different countries of Europe. But the big news is that for the first time a statement was made clear: the digital sector is no longer an accessory sector, but a new and real strategic development asset, as the aviation or the steel industry.

But what are the needs of the sector expected to be taken in account? First of all, a digital single market is completely lacking in Europe and the issues are mostly country-related: the difficulties of accessing managed funds to create European excellences. Furthermore, we operate in a context of great cultural differences. This picture makes us extremely permeable to the great American or Chinese players who do not know these difficulties in their domestic market and who enter Europe only after growing at home.

This trend is flanked by the new store models on which Europe has no possibility of intervention: placing data at the center creates dominant positions in the digital value chain by controlling the different stages of its development, leaving local vendors with a margin that is a little more beyond survivability.

As if an ice cream maker was forced to obtain supplies from a single supplier for milk, fruit, machinery, and who also owns the facilities in which the maker operates. It is clear that the supplier is not only the sole source of subsistence of our entrepreneur, but they are also the only ones who can unequivocally establish his profit margins. This is an extreme example which, however, is not so far from what the great international players do, entering the process so deeply and so diffusely that they put companies using their tools in an extremely weak position.

This is the reason why it is strategically important for Europe to work on a community regulation of the sector, aiming at rebalancing the forces in the field. This is the first step in making the European digital industry competitive globally.

This is the only way to feed a culture capable of leading to the aggregation necessary for the creation of European sector champions. In this sense, the Digital Services Act is the first step on a path towards the construction of a new regulatory environment that favors the industrial development of the digital world.

Today we are in a phase in which Europe recognizes and states the value of the digital world. This is an important moment of awareness to which America, for example, has not yet arrived. If in the US there is a digital entrepreneurial culture, the same cannot be said of a “state” culture. Europe could benefit from this awareness but in order for the transformation to be complete, is once again necessary to act on three fronts: first, regulations needs to be one, with a single framework at European level, second,  the finance world needs to provide incentives for the sector, and last, culture must include policies that facilitate aggregations at European level.

Giovanni Meda is a digital entrepreneur, CEO Kooomo

Kooomo is a tech platform helping brands to sell online and connect internationally