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C 284/6 EN Official Journal of the European Communities 14.9.

98

Opinion of the Economic and Social Committee on the ‘Communication from the Commission
to the Council, the European Parliament, the Economic and Social Committee and the
Committee of the Regions: Globalization and the Information Society — The need for
strengthened international coordination’

(98/C 284/03)

On 6 February 1998 the Commission decided to consult the Economic and Social Committee,
under Article 198 of the Treaty establishing the European Community, on the above-mentioned
communication.

The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing
the Committee’s work on the subject, adopted its opinion on 3 June 1998. The rapporteur
was Mr Burani.

At its 356th plenary session (meeting of 1 July 1998), the Economic and Social Committee
adopted the following opinion by 143 votes with 2 abstentions.

1. Introduction 2. New policy challenges

1.1. Continuing its study of information society 2.1. The communication sums up the present situ-
issues (1), in the present document the Commission ation: the European Union is making an international
examines aspects of communication which, now that contribution to the negotiation of agreements in a
unlimited information has made it global, requires number of fora: WTO, ITA (agreement on tariffs for
globally-harmonized technical and legal frameworks. information technology products), etc.; several national
regulatory initiatives and actions are under way in
1.2. Even at European level, the problems are far European countries and elsewhere in the world. Consis-
from simple: the difficulties multiply once globalization tency and coordination of initiatives is becoming essen-
comes into play. Aspects which are intrinsically complex, tial. The Member States should carry out a critical
given the subject’s highly technical nature, the range of examination of their own policies for adjusting to new
disciplines to be covered and the varying experiences requirements, without thereby ‘surrendering national or
and requirements of those involved, are further compli- regional traditions and cultures’.
cated by the large number of international bodies which
are — or believe they are — competent to deal with the 2.2. If the Union acts ‘quickly and boldly’, it will make
issue. a contribution to the shaping of a new environment, and
should signal this to the international community. The
1.3. The purpose of the communication is to set Commission, then, presents proposals on how to identify
out (2): the areas in which strengthened international cooper-
ation is necessary, and underlines that it is now time to
— the need to create an international framework seek an international agreement on the procedures to be
to facilitate the development of global electronic followed in the future to create a genuinely world-wide,
commerce; border-free market.
— a preliminary analysis of the technical, commercial
and legal obstacles hampering the developing of this 2.3. The Committee would point out that a multitude
framework; of earlier communications, recent or otherwise, have
long highlighted the need for international cooperation
— a proposal for immediate action to coordinate and urgent European-level coordination. Repeating this
initiatives designed to remove key obstacles; message at this stage gives the impression, to an
— a proposal for an International Charter to reach uninformed reader, that little progress has been made
agreement between the relevant parties. in this direction; in other words, precious time seems to
have been lost between the moment at which the need
became clear and the present. However, regardless of
(1) Cf. in particular the following communications on ‘A the terms used, this impression is confirmed, even for
European initiative on electronic commerce’ (COM(97) informed readers, by the subsequent comments. In the
157 final); ‘Illegal and harmful content on the Internet’ meantime, several Member States have taken individual,
(COM(96) 487 final); ‘Ensuring security and trust in uncoordinated initiatives.
electronic communication’ (COM(97) 503 final); and the
Green Paper on ‘The protection of minors and human
dignity in audiovisual and information services’ (COM(96) 2.4. The Community authorities and the parties
483). concerned are well aware of the legal problems, as well
(2) Cf. point 4 of the communication, ‘The Next Steps’. as the problems of standardization, cryptography,
14.9.98 EN Official Journal of the European Communities C 284/7

electronic signatures, competition and taxation. With regulations to a constantly and rapidly changing field
the exception of the latter — taxation — the features of is not resisted.
these aspects are well-known, in part because the parties
concerned are constantly consulted. To speed matters
up, the Commission should make its own point of view
on a range of problems known at the earliest opportunity,
thereby establishing the starting point for practical 4. Measures to ensure market access and competition
initiatives for urgent implementation.

4.1. The Commission mentions a major obstacle to
market access: high telecommunications costs, although
in point 2.1 of the communication it acknowledges that
3. The need for interoperable technical solutions there have already been ‘significant price reductions’ as
a result of falling costs and increased competition.

3.1. The communication emphasizes that in the past,
cooperation between authorities, users and standards 4.2. The question is not unimportant: is the cost of
bodies has worked well in a number of spheres such telecommunications ‘too’ high, and therefore liable to
as telecommunications, mobile phones, etc. In the hinder progress and penalize Europe from the angle of
competing with the United States, or ‘reasonably’ high,
technological field, a turning point has been reached
and not such as to deter the less advantaged from
today: rather than an official, institutional framework,
spontaneous self-regulation is growing as in the case of entering or to have serious repercussions on European
Internet, which has given birth to its own community competitiveness?
with its own rules and bodies.

4.3. The communication raises the problem discussed
in the previous point in the second part of the section,
3.2. The Commission makes no judgment of this where it deals indirectly with competition: transatlantic
phenomenon: it simply notes that the Internet com- telecommunications are said now to cost 1,5 % of their
munity is adopting open standards (protocols) that price 60 years ago, and should fall by a further two-thirds
satisfy the principles of interoperability and competition. by 2010, thereby allowing SMEs and consumers to enter
It adds, however, that measures to facilitate the con- a market no longer limited to large companies.
tinued growth of Internet will need to take the present
‘open’ approach into account. For its part, the Com-
mittee notes that vigilance will be required to ensure
that self-regulation is not accompanied by social dis- 4.4. The ESC has warned against facile enthusiasm
crimination or exclusion to the detriment of certain in earlier opinions: firstly, SMEs could benefit from the
categories of user. To protect young people, it must be information society, but might also lose ground to
ensured that unsuitable or offensive material can be more skilled and experienced competitors; secondly,
withdrawn through self-regulation. consumers must be aware of the risks they run in an
integrated world market where they no longer enjoy
uniform protection.

3.3. The ESC feels that these comments give grounds
for thought: Internet began with pre-established initial 4.5. Unarguably, however, the advantages of a
standards, and has subsequently developed without reduction in telecommunications prices will vastly out-
specific rules. Such rules are beyond the capacity of the weigh any disadvantages or dangers. In any case, as far
authorities to lay down in time, given their cumbersome as the current situation is concerned, the ESC believes
decision-making procedures. Fortunately for all, self- that it must draw the authorities’ attention to a glaringly
regulation has reflected the fundamental, general rules obvious fact: telecommunications prices vary by some-
underpinning international coexistence: interoperabi- times significant amounts from one country to another,
lity, non-discrimination, observance of the rules of and even between different operators in a single country.
competition. This situation, resulting from competition with is good
for consumers, should be welcomed; nevertheless, the
Committee notes that charges for the different means
(fixed-location and mobile telephony, Internet connec-
3.4. A conclusion, or rather a lesson, can be drawn tion, etc.) are often structured on a highly detailed
from the above: technical progress cannot be bound and complex case-by-case basis, making comparison
by detailed rules, which are necessarily based on the difficult. It thus becomes difficult for consumers and
past: a small number of fixed points supported by SMEs to make informed choices.
general principles, together with effective control of
diverging practices, is enough. International agreements
to this end should not be too difficult to reach in
terms of content and timing: they do, however, become 4.6. The Committee is well aware that it is not the
difficult when the temptation to apply detailed authorities’ function to regulate prices, which must be
C 284/8 EN Official Journal of the European Communities 14.9.98

open to free competition; one of their tasks is however nature multidisciplinary, but with close links between
to ensure compliance with the principles of transparency the various aspects.
(which, among other things, entails the possibility of
comparing costs and services provided) and standards
for competition and dominant positions.
5.5. In the ESC’s view, therefore, there must be the
political will to construct a coordinated European legal
framework, based on universal general principles which
5. Creating a consistent legal framework: the basic reflect the steps already taken by individual Member
elements States, without being dependent upon them, and this
must be done relatively quickly. There is, in principle,
no reason why different aspects should not be discussed
separately and simultaneously by a range of bodies and
5.1. The need to establish an international legal experts, subject to central coordination. The ESC realizes
framework has already been discussed in a number of that a solution of this kind is easy to describe but harder
other Commission communications, the most recent to achieve: one stumbling block is the variety of interests
of which, ‘Ensuring security and trust in electronic at stake; another, even greater (cf. point 6.1 below), is
communication’ (1), stressed the urgent need to find the widely differing international bodies and customary
solutions in the areas of certification and authentication negotiating procedures which have become established
of signatures. with time, but which must be revised and streamlined.

5.2. The legal framework for electronic communi-
cation as a whole is very broad, covering a variety of 5.6. The desirability of Europe-wide regulation arises
aspects of which the Commission sets out to draw up a from the fact that 90 % of trade takes place within the
non-exhaustive list: application of VAT, jurisdictional Community. Bearing in mind that the information
conflicts, labour law, copyright, data and trade mark society is, by its nature, a global one, the European legal
protection, consumers’ rights, validity of contracts, framework must be prepared on a realistic basis: the
safeguards against fraud and organized crime, etc. No more detailed it is, the less it is likely to be recognized
less important, although unmentioned, is the question outside the Community. In other words, these rules
of the content of communications, particularly where the should be restricted to establishing universally accept-
protection of minors is concerned (2). The Commission able fundamental principles. This does not, of course,
considers that, in general, the legal framework must not preclude more detailed rules being drawn up applying
replace self-regulation, but should establish the limits only to the relations between European suppliers, users
within which the parties’ free will may be expressed. and managers.

5.3. The Committee cannot but agree with the need
to tackle these problems and resolve them as soon as
possible. However, it would express its surprise at the 6. Strengthening international coordination
claim that a list of priority obstacles to the development
of the information society needs to be drawn up: firstly,
because legislators and operators are by now well aware
of these obstacles — views on the solutions may differ,
but there is unanimous agreement on their nature; and 6.1. The Commission highlights the need for coordi-
secondly, because of the method involved — prioritizing nation, but the description it gives of current and
urgency (and probably importance) would mean split- planned initiatives is not reassuring. To quote only one
ting a global problem into a multitude of separate aspect of the information society, electronic commerce,
solutions. the document lists no less than twelve agreements and
conferences between 1995 and early 1998 at the initiative
of a host of bodies, governmental or otherwise. If it is
true that ‘much work has already been achieved within
5.4. From both the theoretical and practical points the WTO, notably the GATT, GATS and TRIPS
of view the ‘priority’-based approach might at first Agreement’, then the completion of a universal legal
appear justifiable: after all, the problems are of different framework cannot be far off.
types and concern different areas. However, this over-
looks the fundamental point that a legal ‘framework’,
on account of its very nature, cannot consist of separate
elements added at different times. The subject is by
6.2. The real picture is very different: the freedom to
supply and access information services has not yet been
consolidated: the rules of competition, discussed by a
WTO working group, should ‘eventually’ be strength-
(1) OJ C 157, 25.5.1998. ened: but the amount of time it takes, and the number
(2) OJ C 287, 22.9.1997 and OJ C 214, 10.7.1998. of reservations which must be overcome, for a WTO
14.9.98 EN Official Journal of the European Communities C 284/9

agreement to be transposed into law are notorious. The 7. Towards a new method of coordination: an ‘Inter-
Commission itself acknowledges that ‘although good national Charter’
progress has been achieved, the understandings and
agreements arrived at within these fora consist either of
principles, which are not necessarily compatible, or do 7.1. The comments made by the ESC in point 6.5
not cover all elements of a comprehensive framework above — which might be seen as provocative — are
... there is a growing number of urgent issues awaiting implicitly shared by the Commission (1) which, in view
solutions’. It might be added, in reply to this statement, of the ‘growing constellation of actors and bodies
that if the number of ‘urgent’ issues is growing with involved’, wonders how they could ‘work together in
time, the available machinery for dealing with them has future’. It is then proposed to reach an agreement
proved itself inadequate to the task. between the parties on ‘how best to develop common
approaches’ and on the development of procedures for
the coordination of public and private interests. Such
an agreement, or ‘charter’, would be non-binding,
6.3. On the basis of the Commission’s own state- would recognize the value of present work, and would
ments, the ESC notes that if this is the outcome of years contribute to greater regulatory ‘transparency’.
of discussion in dozens of different fora, involving
hundreds of government and other experts, of such a
well mapped-out issue whose problems were brought to 7.2. Here again, the Committee is puzzled. In itself,
light years ago, then serious questions must be asked as the proposal certainly makes sense, but the complexity
to the efficiency of international consultation and of the procedures for achieving a ‘charter’ once again
decision-making machinery. The market, and in particu- raises the problems discussed above: excessive plurality
lar SMEs and consumers, views this situation with of the parties involved, conflicts of competence, lengthy
concern and frustration. deadlines. After all this, the final result would be a
[non-binding] ‘understanding on how a process of
strengthened international coordination should be
organized’. Coordination is already needed simply to
6.4. Taken individually, each body justifies its exis- reach agreement on the ‘charter’: how much time and
tence by displaying the results of its work: the defence effort will be required to get that far, which is only
of particular interests, coordination of different interests, preliminary to all the rest? The Committee expresses
or provision of a discussion forum for different parties. uncertainty not about the proposal itself, but its chances
Taken together, however, the excessive number of of success in the short term.
bodies slows down and complicates the decision-making
process. In more general terms, the collective cost of
each individual decision needs to be considered.
8. The next steps

6.5. The ESC is fully aware that it is fruitless to 8.1. The last part of the communication sets out the
propose a reduction in the number of international Commission’s programme for the immediate future:
bodies which exist according to well-established pro-
cedures which cannot be undone. The aim is simply to
draw the attention of national, European and inter- — to seek an understanding with the Member States
national authorities to the need to review procedures on the procedure to be followed;
with a view to greater efficiency, speedy decision-making
and lower costs for taxpayers. The authorities must, of — to pursue discussion with international partners;
course, also direct their attention to their own internal
procedures. — to organize a round table of experts to obtain a more
comprehensive view of the issues;

— to seek an ‘active contribution’ by Europe to an
6.6. The comments made in points 6.4 and 6.5 above agreement between the private and public sectors;
are of a general nature and do not relate specifically to
the subject under discussion in the present opinion. On — to invite all interested parties to send their comments
this matter, it is noted that during the course of 1998 by 31 March 1998.
the Commission plans to organize a round table of
experts, providing them with the opportunity to voice the
views of all the parties concerned, together — possibly —
8.2. The ESC appreciates these initiatives, and urges
with an international ministerial conference to define
the Commission to continue its efforts to get to grips
the priorities mentioned in point 5.3 above. The ESC
hopes that the methodological suggestions made in
points 5.4 and 5.5 above will be taken into consideration,
and that the general comments of the present opinion
will be reflected in the progress of work. (1) Cf. point 3.3 of the communication.
C 284/10 EN Official Journal of the European Communities 14.9.98

with this complex subject reasonably soon. Such efforts their applications change much faster than regulations.
are made all the more arduous by lengthy and costly Procedural streamlining must be included in the review
procedures, which can only be modified if there is an which international and EU bodies should take on as
understanding of the basic problem: technologies and their primary duty to the community as a whole.

Brussels, 1 July 1998.

The President
of the Economic and Social Committee
Tom JENKINS

Opinion of the Economic and Social Committee on the ‘Proposal for a Council Regulation
(EC) laying down detailed rules for the application of Article 93 of the EC Treaty’ (1)

(98/C 284/04)

On 11 March 1998, the Council decided to consult the Economic and Social Committee, under
Article 198 of the Treaty establishing the European Community, on the above-mentioned
proposal.
The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing
the Committee’s work on the subject, adopted its opinion on 3 June 1998. The rapporteur
was Mr Sepi.
At its 356th plenary session (meeting of 1 July 1998), the Economic and Social Committee
adopted the following opinion by 135 votes to one, with three abstentions.

1. Introduction 1.5. The proposal also follows the regulation on the
application of Articles 92 and 93 of the Treaty to certain
categories of horizontal state aid (3).
1.1. The Committee has several times acknowledged
the need to regulate competition in a thorough and
legally valid manner. 1.6. The Committee urges the Commission to con-
tinue to extend its regulatory work, in order to build up
a corpus of measures which harmonize and clarify the
1.2. In its opinion (2) on the 22nd report on compe- entire competition issue, also in view of enlargement.
tition policy, the Committee had already emphasized
how important and necessary it was for the Commission
to lay down regulations that would improve trans- 1.7. In some key sectors of EU industry, these
parency and give greater legal certainty to all interested measures will have to take account of the situation
parties. regarding aid granted in competing countries.

1.3. The Committee wishes to highlight the greater 1.8. The proposal attempts to strike a balance
awareness that is developing in all EU countries on the between efficiency and transparency. The Committee
subject of competition, both among economic and legal believes that, broadly speaking, Community institutions
practitioners and, more generally, on the part of public should pay greater attention to transparency and third
opinion. This is due to the good results obtained in price party rights.
restraint and in increased competitiveness.

2. The Commission’s document
1.4. It is precisely in this sphere that legislation is
needed to make the Commission’s work more methodi-
cal and transparent. 2.1. The proposed regulation is basically a procedural
proposal which on the one hand codifies a tried and

(1) OJ C 116, 16.4.1998, p. 13.
(2) OJ C 34, 2.2.1994. (3) OJ C 129, 27.4.1998.