Travel Tech

Although it has generally been a difficult time for the Eurozone economically, the European Commission (EC) clearly views the digital marketplace has a particularly valid commercial revenue. With this in mind, the EC has recently announced plans to push for a single digital market in Europe as it attempts to make cross-border selling more feasible and viable.

New EC Digital Directive

The executive body of the European Union has outlined that the series of policies it is implementing will be completed by the end of next year, as it attempts to create a single market for the sale of digital goods. According to statements released by the hierarchy of the commission, producing the single market will be a top priority for the administration of Europe in the next 18 months, and in line with this the EC has launched an e-commerce antitrust competition enquiry as part of the process.

With the digital single market clearly a key aim of the commission within the next year or so, a statement made by the European Commission indicated that the aim of this procedure is to tear down regulatory walls and move from 28 separate national markets to a single European one.

This general trend and move to a single digital market has been diagnosed in the new Package Travel Directive, which will shift the regulation of financial protection for holidays from the country of sale to the member state where a travel organiser is established. After some debate and refinement, the council and Parliament of Europe have recently agreed with the final text of this directive, ahead of its imminent publication.

Enhancing cross-border digital business

Proposals tabled by the European Commission are intended to enhance cross-border business opportunities in the digital market. However, it should also be noted that they will lead to new entrants in the UK market in particular, and all of those pose difficulties to regulators. Britain, of course, remains outside of the European Union, even though its trading practices are very much entwined with the European mainland.

Gunther Oettinger, European commissioner for the digital economy, pledged that the proposals would "balance the interests of consumers and industry”. It is stated by the European Commission that this new arrangement will enable consumers to acquire the best deals possible regardless of their location in Europe. The notion of a single market will probably also significantly benefit retailers and those invested generally in the digital industry.

Plans for this new market will see consumer protection standardised across the European continent, with contract rules a particular focus. The European Commission has also stated that it intends to end the widespread online practice of ‘geo-blocking’; effectively restricting access to content based upon a consumer's geographical location.

Speaking about this particular element of this new legislative framework, the European Commission specifically mentioned car rental companies. It has been noted that at present car rental customers in one member state can pay significantly more for identical car rental in the same destination as customers in another nation. The aim with this new directive is to ensure that no consumers in the Eurozone suffer from such discrimination.

Digital tax burden reduced

In accordance with these plans, that European commission has also pledged to reduce the VAT burden on businesses across different tax regimes in the Eurozone. In making this decision, it has noted that small businesses trading in Summer European Union countries faced VAT compliance costs which can amount to €5,000 per year.

It is worth noting that the impact on VAT arrangements in that United Kingdom are not entirely clear. As Britain is not within the auspices of the European Union, it operates an entirely separate taxation system, and it is the case that aspects of the Tour Operators' Margin Scheme do not comply with current EU rules on VAT. So whether this will ultimately apply within Britain remains to be seen, but European commissioners have expressed their enthusiasm about this notion and indicated that they intend to enter into discussions with the British government.

Search engine policy

With search engines always a key issue for the digital sphere, the European Commission has also vowed to investigate online platforms and the existing policy related to search results and pricing. This is clearly a major issue for businesses in many industries, and it should be seen as a central facet of this new digital directive.

The European Commission stated that its goals in this area are to examine the role of online platforms “including "non-transparency of search results and pricing policies, relationships between platforms and suppliers, and promotion of their own services to the disadvantage of competitors”. Privacy is also to be a focus of this directive, particularly as the commission knows that 72 percent of Internet users currently worry about the amount of personal data that js requested from them.

In conclusion, this is an important political policy that will have a significant impact on businesses which operate across Europe. This will definitely apply to all travel-related companies, and anyone with a significant stake in the European continent would be advised to familiarise themselves with the implications of this directive.


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