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Clarity needed on UK access to Digital Single Market post-Brexit

28 March 2017

The UK's access to the EU Digital Single Market (DSM) will be affected by Brexit but there is a lack of clarity about how specific issues will be affected, the European Scrutiny Committee has concluded in its weekly report, which provides an overview of the many strands in the complex DSM proposals as well as the stage in the legislative process which each initiative has reached.

Which digital initiatives will require domestic legislation or bilateral agreement?

The Committee has asked the Government to clarify which EU digital initiatives the Government believes can in principle be completed solely through domestic legislation after the UK leaves the EU, and which will require a bilateral agreement.

The Government has said that it will continue to play a proactive role in Digital Single Market (DSM) negotiations and votes, using its influence to push for an open, flexible digital market until the UK leaves the EU, a position that the Committee has welcomed.

Although reluctant to discuss negotiation priorities, the Government has also told the Committee that it regards the free flow of data as "fundamental to the functioning of the digital economy" and that it "sees global data flows as being of high importance, hence the desire to tackle unjustified data localisation not just at the EU level, but also in data flows between the EU and third countries".

Some DSM issues are inherently cross-border in nature

But concerns have been expressed by industry stakeholders, including techUK, that the EU could use certain DSM initiatives, notably the initiative on non-personal data ('Building a European Data Economy'), to require UK-based digital businesses to relocate part of their operations to the EU.

Some of these DSM policy issues are inherently cross-border in nature (e.g., abolishing roaming charges for consumers) and necessitate reciprocal commitments from more than one country in order to achieve their policy objectives. Post-exit, achieving such policy objectives would appear to require some form of bilateral agreement, such as a comprehensive Free Trade Agreement. On the other hand, proposals that do not contain a reciprocal dimension might be achievable through UK law in the absence of any bilateral agreement.

The Committee is therefore calling on the Government to provide the Committee with a case-by-case assessment of the extent to which, after the UK leaves the EU, the policy objectives of each of the twelve Digital Single Market initiatives could be achieved solely through domestic legislation or whether a bilateral agreement with the EU would be needed.

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