ACT | The App Association appreciates the opportunity to submit comments to the EU-Africa Digital Economy Task Force (DETF) to inform its report containing concrete recommendations for the future digital cooperation between the two continents.

The App Association represents thousands of small business software application development companies and technology firms that create the software apps used on mobile devices and in enterprise systems around the globe. Today, the ecosystem the App Association represents—which we call the app economy—is valued at approximately €853 billion and is responsible for millions of European jobs. Alongside the world’s rapid embrace of mobile technology, our members have been creating innovative solutions that power the internet of things (IoT) across consumer and enterprise use cases.

The global digital economy holds great promise for small business digital economy innovators across Europe, particularly developing and developed markets in Africa. Generally, however, App Association members face a diverse array of challenges when entering new markets. Commonly referred to as “trade barriers,” these challenges are reflected in the laws, regulations, policies, or practices that protect domestic goods and services from foreign competition, artificially stimulate exports of particular domestic goods and services, or fail to provide adequate and effective protection of intellectual property rights. These barriers take many forms but have the same net effect: impeding EU growth and job creation.

The App Association generally supports DETF’s efforts to advance digital cooperation between the EU and Africa, and urges DETF to focus on preempting and mitigating barriers to the digital economy, enabling foreign direct investment, and protecting intellectual property rights. We are committed to working with DETF and other stakeholders to reduce or eliminate trade barriers that will inhibit the growth of the app economy widely. The App Association strongly recommends that the DETF’s recommendations for the future digital cooperation between the EU and Africa reflect the following core principles:

• Enable Cross-Border Data Flows: The seamless flow of data between economies and across political borders is essential to the functioning of the global economy. Innovative app development companies must be able to rely on unfettered data flows as they seek access to new markets.
• Prohibit Data Localization Policies: EU digital economy innovators looking to expand into new markets often face regulations that force them and other foreign providers to build and/or use local infrastructure in-country. These data localization requirements seriously hinder imports and exports, reduce an economy’s international competitiveness, and undermine domestic economic diversification. Our members do not have the resources to build or maintain unique infrastructure in every country in which they do business, and these requirements effectively exclude them from commerce.
• Prohibit Customs Duties on Digital Content: EU digital economy innovators must take advantage of the internet’s global nature to sustain growth. The “tolling” of data crossing political borders with the purpose of collecting customs duties directly contributes to the balkanization of the internet, and significantly jeopardizes the efficiency of the internet, effectively blocking innovative products and services from market entry.
• Ensure Market Entry is Not Contingent on Source Code Transfer: Some governments have either put into place or proposed policies that require companies to transfer, or provide access to, proprietary source code as a requirement for legal market entry. Intellectual property is the lifeblood of small business tech companies’ innovation and the transfer of source code presents an untenable risk of theft and piracy. Government policies that pose these requirements are serious disincentives to international trade, and a non-starter for the App Association’s members.
• Preserve the Ability to Utilize Strong Encryption Techniques to Protect End User Security and Privacy: Global digital trade depends on the use of strong encryption techniques to keep users safe from harms like identity theft. However, some governments continue to demand that backdoors be built into encryption keys for the purpose of government access. These policies jeopardize the safety and security of data, as well as the trust of end users, by creating known vulnerabilities that unauthorized parties can exploit. From a privacy and security standpoint, the viability of an app company’s product depends on the trust of its end users.
• Provide for Strong Intellectual Property Protections: The infringement and theft of intellectual property and trade secrets threaten the success of the App Association’s members and hurts the billions of consumers who rely on these app-based digital products and services. Intellectual property violations can lead to customer data loss, interruption of service, revenue loss, and reputational damage – each a potential “end-of-life” occurrence for a small app development company. Strong protection of intellectual property for copyrights, patents, trademarks, and trade secrets is essential for digital cooperation between the EU and Africa.

DETF’s efforts are not only important, but they are timely. In other key markets, policies are being proposed and finalized that would erect barriers to the flow of data through applying physical good customs approaches to the digital economy. Indonesia, for example, has even codified new tariff codes for digital goods. Now, more than ever, it is imperative that the EU and Africa to set an example to the world on the best ways to facilitate the growth of the digital economy and to enhance business environments. Doing so will advance the ability of EU small business innovators to grow into new markets to create more EU jobs.

The App Association appreciates the opportunity to provide its views to the DETF to inform its report containing concrete recommendations for the future digital cooperation between the EU and Africa .

Brian Scarpelli

Senior Policy Counsel

ACT | The App Association

Lighthouse Europe

Avenue Adolphe Lacomblé, 59

B-1030 Brussels

p: +1 517-507-1446

e: bscarpelli@actonline.org