Incumbents rule

LOBBYING is big in Brussels (see chart). As well as lots of cash, it takes up vast amounts of time. Between December 2014 and this July, members of the European Commission, the EU’s executive body, and their closest advisers held more than 11,000 meetings with lobbyists. Among the most approachable, it seems, were commissioners Andrus Ansip and Günther Oettinger and their teams. They clocked up 2,156 meetings, or 6.5 per working day on average, according to Transparency International, an anti-corruption group.

It helps to keep these numbers in mind to understand the evolution of what is arguably the commission’s most important economic initiative, led by Messrs Ansip and Oettinger. This is to create a digital single market across all of the EU’s member states. On September 14th the commission unveiled its most controversial proposals thus far, one on telecoms regulation, the other on copyright reform. The plans have to be approved by national governments and the European Parliament, and they are already being fought over.

The commission’s intentions are laudable. In the digital realm Europe is still very much a patchwork. Digital businesses must work around 28 sets of national contract laws, which add an estimated €4 billion-8 billion ($4.5 billion-9 billion) a year to their costs. That is a big reason for the region’s dearth of big technology businesses: only 27 of the 176 tech platforms identified by the Centre for Global Enterprise, a think-tank, hail from Europe.

Some of what the commission has proposed, together with what it plans to unveil later this year, would chip away at such virtual borders. One idea is to make it easier for consumers to access online content in another country. Today firms often block it for copyright reasons. More importantly, the EU wants to boost digital connectivity across the continent. Proposals include common rules for radio spectrum and incentives to invest in broadband networks. The commission also wants to sponsor free Wi-Fi across the EU.

Yet vital bits of the proposed rules do not seem aimed at creating a single market. Rather the goal is to arbitrate between battling corporate interests: European telecoms operators and big media firms in one corner and American tech giants in the other. Firms such as Deutsche Telekom and Spain’s Telefónica have long pushed for a “level playing-field” with online rivals. The commission now proposes that certain offerings, such as internet-telephone services including Skype, must obey telecoms regulations, including the requirement to allow emergency-call services.

News publishers, similarly, want internet platforms such as Google to pay for the snippets of articles they display. The new regulatory proposals give them a new sort of copyright on these, to strengthen their ability to negotiate fees with the tech platforms (although it doesn’t introduce a “tax” on web links, as some had feared).

The interests of European startups, originally seen as a high priority, have got short shrift. Thus far the EU’s digital strategy includes little to make life easier for them. The commission decided not to include them in an important copyright exception, for example. Academic researchers will be allowed to mine bodies of text and data without having to pay extra for this, but, oddly, not if the purpose is to set up a new firm. Another round of telecoms and copyright regulations is likely to make it more difficult for young firms to expand.

There is also the likelihood that the commission’s planned new rules will become still more unfocused as they wind their way through the legislative process. Meanwhile, American platforms will broaden their footprint even further, perhaps into manufacturing industries where the continent’s firms have more clout. “Europe has lost the first half-time of the digitisation game,” said Timotheus Höttges, the boss of Deutsche Telekom, a few years ago. The outcome of the second half may not be that different.