The Confederation of Swedish Entreprises: Practically every sector and part of the economy are presently re-structured due to the development of the digital economy. This process also changes the face of global competition. Europe’s ability to create legislation that safeguards a single market for the digital age will determine EU’s outcome in the global race for competitiveness.

Having a well-developed digital infrastructure is a pressing concern for Europe and a prerequisite for growth, for a functioning and innovative economy, and for continued social prosperity.                

Currently, the European broadband market is fragmented. Countries have progressed at different rates in expanding their infrastructure in terms of accessibility and capacity. Part of the digital agenda’s aim is to ensure that by the year 2020 everyone in Europe has access to a 30Mbit/s internet connection. Achieving this will require significant investment in infrastructure as well as wireless spectrum-width being freed for mobile communications.

However, regulatory changes are as important. The regulators should not attempt to structure the market using technology-based regulations because such attempts are likely to create more harm than good in fast-moving markets. There have been some signals that the Commission is thinking about regulating specific platforms, which is also problematic. The best solutions for creating a single digital market which is also responsive to upcoming challenges must be a technology-neutral one.

Finally, the outcome of the Data Protection Regulation should not be reached emphasizing speed over quality. A harmonized framework for data protection is crucial for the functioning of a real single market, and companies depend on continued reliable mechanisms for data transfers both within and between companies.

1 Building the Internet

Sweden has a good position in terms of access to high speed broadband, due to the presence of several infrastructure market competitors. Business and consumer demand for digital goods and services drives market incentives towards investment in infrastructure, in terms of both greater availability and higher capacity. However, the current differences in the development of networks and infrastructure in the EU member states hamper opportunities to scale-up and constitute a real obstacle to creating a single digital market.                     

Many European countries promote the sharing of passive infrastructure by mobile operators. Given the high cost of obtaining 3G (IMT-2000) licenses, many European operators have also been considering sharing active infrastructure for 3G mobile services and thereby building a network without back-up. On 23 February 2015 Sweden became aware of the consequences, when the mobile network collapsed due to broken router hardware shared by Telia and Tele2, two of the largest mobile operators in Sweden. Ear-marked spectrum for broadcasting services is a big problem in many EU member states. A common effort is needed to make sure that at least part of this allocation is made available for network operators. Mobile and fixed networks offer viable options and offer on-demand capabilities that consumers take for granted while this is not the case with broadcasting. This shows the vulnerability of the system and proves that the hardware on the network to create the so-called Internet of Everything is not finished.

2. Technological neutrality and net neutrality

Europe is facing a spectrum shortage. Given the exponential increase in mobile traffic and difficulties surrounding spectrum band clearing, policy makers in many member states are currently looking into ways of freeing up under-used spectrum to meet the region’s ever-growing digital demands. However, spectrum sharing alone will not solve the spectrum crunch, given that millions of Europeans are simultaneously watching streamed movies, managing their training records and controlling the fridge in their homes, all through their mobile devices. Not to mention all the complex operations and transfers made constantly by companies that organise their operations through global value chains and require speedy and stable bandwidth.

One step to free broadcast spectrum should be an expansion of the broadband network where possible. A second step is ensuring technology neutrality when revising current or introducing new legislation. Internet policy, cyber-security and telecommunications regulators should refrain from measures that regulate specific technologies or are a response to challenges posed by certain currently dominant technologies. The justified fear that the legal framework will change in the near future is a real problem if we want to stimulate private investment in network infrastructure. The laws that need to be crafted to better organize the European digital environment must leave enough flexibility to allow for a technological development that we cannot predict.

An additional concern is how to accommodate the principle of net neutrality; that

 Internet traffic – regardless of who sent it or what is being sent – is largely given equal treatment by internet service providers. This strengthens innovation and ensures freedom of information and freedom of speech in society. However, balancing between securing economic incentives for continued maintenance of physical infrastructure while encouraging continued innovation of internet based services has become one of the bigger challenges to maintaining a functional internet. Companies use a wide range of various pricing models for internet access to make investment profitable. It is crucial to take the need for profitability into consideration and ensure the continued possibility to offer and utilise various services and content. Legislators must understand and respect these mutual principles of the open internet when drafting legislation, directly or indirectly affecting the internet’s functionality.

3. Data transfer and privacy

For society to fully take advantage of the opportunities afforded by digitisation, it is essential that all users – whether organisations, businesses, or individuals – trust the new technologies and processes. If the trust is missing, there is no basis for conducting business and consumers and companies alike lose out on opportunities.

For individuals, adequate protection of online privacy is necessary for creating trust. When the current data protection directive will be replaced by the Data Protection Regulation, EU lawmakers are faced with the challenge of adapting a legislation which functions satisfactorily in our modern, interconnected society and still carefully balances various rights and interests against each other.

Harmonised legislation is crucial for the functioning of the single market. Companies are already using data processing for a wide range of different business activities and to offer specialised products and services, and data flows have become an essential way of organising production across global value chains. Creating effective rules which do not hamper the way companies operate globally, while still succeeding in protecting personal integrity, so that consumer trust is guaranteed, is therefore increasingly important.

The Data Protection Regulation currently discussed in the EU institutions holds great potential to simplify and clarify rules regarding the processing and controlling of data, as well as better protection of personal data. However, the Regulation should not be rushed to agreement unless quality and propriety can be guaranteed. A harmonised framework for data protection is absolutely crucial for the functioning of a real single market, but companies depend on the continued reliable mechanisms for data transfers both within and between companies. A well-functioning one-stop-shop which truly simplifies and clarifies the responsibility among European Data Protection Authorities is one of the most essential features of such a framework. Furthermore, the notion of risk must be taken into account when deciding about both levels of protection and size of sanctions. 

One of the essential factors in this endeavour is to clearly define what constitutes an increased risk when dealing with data and to weigh requirements placed on those who process and analyse data against that risk. Additionally, companies’ ability to adapt products and services to customers’ needs and wishes must be considered. It is also important that sanctions and fines are proportionate and based on the actual damage caused to a data subject, and do not unjustly limit the creation of new and innovative services.

An overly detailed or all too static form of protection risks impeding the opportunity for innovation and effectiveness of business. It would increase the administrative costs for businesses and put EU-based companies at a competitive disadvantage compared to other parts of the world. Complex demands for explicit consent from the data subject will impose large administrative costs and has negative impact on business. It is important to acknowledge the individual’s privacy rights to build trust, all the while allowing companies to organize themselves in different ways to accommodate consumer privacy.