Contact: Michela Palladino - Michela@AppAlliance.org
Joint Letter to Members of the European Parliament on the European Electronic Communications Code
BRUSSELS - This morning, the Developers Alliance in partnership with Allied for Startups, Bundesverband Digitale Wirtschaft (BVDW), eCommerce Europe and startups.be issued the following letter to relevant Members of the European Parliament:
Dear Members of the European Parliament,
We write to you concerning the ongoing work on the European Electronic Communications Code.
While we welcome EP’s efforts to improve the communication services market in the EU, we are concerned about the amendments to the Code calling for interactive applications to be regulated in the same way as traditional telecommunications companies.
Applications such as iMessage, KakaoTalk, LINE, Signal, Skype, Snapchat, Threema, Viber, WhatsApp or WeChat are used and enjoyed by millions of consumers all over Europe. These interactive apps all have a variety of functions which change over time (money transfer, location sharing, real-time translation, etc. with an average of nine functions) and develop along with their users’ needs.
This means that capturing the nature of a broad variety of online applications, as proposed in the Code, is problematic and will harm innovation.
In this context, we would like to draw MEPs’ attention to two recent studies prepared for the IMCO Committee that take a data-driven approach to argue against the inclusion of online communication services in the Code. The first study highlights “the use of communications OTTs is rapidly growing in the EU indicating consumers’ satisfaction.” (Reference p.31) In spite of that, the second study worryingly concludes the Commission’s “proposal introduces new regulatory burdens for OTTs, potentially making their life more difficult without guaranteeing that end users will be better off.” (Reference p.26)
On this basis, we encourage policy-makers to avoid new unnecessary regulatory burdens that would hit companies offering interactive apps (most of which are small sized) disproportionately hard.
New interactive apps would have to comply with a number of requirements that would make market penetration much more difficult. An example would be the obligation to ensure interoperability amongst services provided: this is impractical and fulfils no consumer need. App developers would need to spend time figuring out how to link to established applications, rather than trying to beat them with new features. As a result, start-ups would be discouraged from identifying new service niches and developing great future products. Additionally, consumer choice would be limited by locking them into the services provided by the biggest players.
This would undermine Europe’s vibrant app economy - currently on a par with the US - which is worth EUR 17.5 bn and employs 1.8 m people. Those numbers are projected to rise to EUR 63 bn and 4.8 m respectively by 2018.
Finally, the positive effects of the app economy mean that interactive apps helped to grow global GDP by USD 5.6 trillion between 2000 and 2015, according to a WIK research institute study (p.19) The research also found that consumers using interactive apps are more likely to have above-average internet access speeds at home as well as a 4G contract, which drive profits of traditional communication service providers.
In the above context we urge MEPs to apply a “think small first” principle and to avoid imposing unnecessary obligations on small market players. With this in mind, we call on MEPs to:
1. ensure the IMCO and ITRE reports reject any extension of the scope of communications rules to interactive apps;
2. urge Member States and the European Commission to step up their efforts to properly implement existing legislation. Interactive apps are already subject to a number of obligations that concern consumer protection (Consumer Rights Directive, future Digital Content Directive), privacy and protection of their users’ data (GDPR) and security of the services they provide (NIS directive);
3. aim for horizontal consumer-focused legislation (Consumer Rights Directive, Digital Content Directive) rather than sector-specific rules in the Code which contribute to market fragmentation and goes against the principles of the Digital Single Market.
Interactive apps are a European success story, both in empowering consumers and business and in creating millions of jobs. We urge you to back this success by rejecting heavy handed calls for a ‘level playing field’ and supporting our future creativity.
Lenard Koschwitz - Director European Affairs, Allied for Startups
Marco Junk - Managing Director, Bundesverband Digitale Wirtschaft (BVDW)
Michela Palladino - Director European Policy & Govt Relations, Developers Alliance
Marlene ten Ham - Secretary General, eCommerce Europe
Karen Boers - Managing Director, Startup.be