miércoles, 25 de abril de 2018

Soft and needed rules on P2B

Beyond the issues of digital taxes, fake news and privacy, there are many other topics that raise concerns around the role of digital platforms in our society and economy. Platforms have become a central element in the distribution of any kind of goods and services, and therefore in the connection between sellers and buyers. Each day, there are less and less cases of independent traders in any sector, consumers have got used to look for theirs dreams and needs in a selected group of sites.

But for the dismay of USA, the EU is expected to regulate on the field of P2B (Platform-to-Business) relationships. There are important reasons behind this purpose. According with a study published last year, "3rd party sellers in the EU in 2016 was €54.566,5 Million, representing 22% of total online retail". Furthermore, the aggregated impact of marketplaces, appstores, online advertising and social networks in the EU economy is estimated in the range of € 2.0 billion and € 19.5 billion per year (difficult a more acute calculation due to the opaqueness of platforms)

While there is a growing economic importance of the role platforms, there is also a growing discontent of their business users. In another study focused in the quality of the P2B relationship,  "46% of business users responded that they have experienced problems and disagreements with the platforms in the course of their business relationship". The mix of these problems include disputes around terms and conditions, the lack of transparency in platform practices, the unbalanced usage of data and many others.

Taking into consideration the above landscape, it looks there are strong reasons for the EU to take regulatory actions on the issue. However, according with the announce of the digital commissioner, there are not extremely regulatory actions, just some transparency obligations, a framework for redressing and the creation of an observatory. The light approach needed for the current status of our incomplete knowledge of digital markets, but enough for starting to bridle what has been up to now an unleashed market.

miércoles, 18 de abril de 2018

What will be in the future European AI roadmap?

With some delay on the initially foreseen agenda, it looks that Europe is at last speeding its initiatives in the AI area. Last week a significative bunch of European ministers get surrounding by experts and practician to speak about the issue in the so-called Digital Day. In the near future, it is expected that the European Commission will publish the European roadmap for AI. 

It was high time for this European hyperactivity. As usual. it looks to come late. AI investments in 2016 in Europe totaled $3 to $4 billion in 2016, compared with $8 to $12 billion in Asia and $15 to $23 billion in North America. It is not a surprise of this lagging as there was not any measure in the original Digital Single Market (DSM) Strategy and a vague idea for "Building artificial intelligence capacities" in the DSM strategy midterm review.

As you may remember, the European Parliament published a report on AI a year ago. It will be interesting to see how many of the European Parliament ideas will be taking on board on the European Commission roadmap. Some of them can be directly discarded. It is not the time to expect any kind of regulation on robots liability or a legal status for robots. According with the declaration signed on the Digital Day, the roadmap will contain few more things than a framework for pooling R&D resources, exchanging ideas on legal and ethical issues to be considered in the future and holding some kind of general reflection the impact of AI in labour.

However, until the roadmap is published let´s hope something more ambitious. AI is not something that will come in a far future. For good or bad, robots are around us in many fields right now, like medicine or transport to name a few. So there should be some kind of flesh in the roadmap otherwise the scaring face of a future reigned by unleashed and out of control robots will still brake the development of AI in Europe.

miércoles, 11 de abril de 2018

Are we really suffering a skills shortage?

There is a continuous hype in the press related to skills shortage. As the story is told, one of the major problems of the labour market, particularly in the IT sector, is the scarcity of enough professionals trained for fulfilling a certain kind of tasks. But what if this is not the case? What if the problem of the labour market is not a the lack of professionals but the lack of professionals that accept to work under neoslavery conditions?

The theory of lack of skills in the labour market has emerged, suspiciously, after the crisis.Promoted by the great consultant firms, like McKinsey or PWC, it has been parroted, firstly, by entrepreuners and, afterwards, by policymakers. However, the dynamics of the labour market stubbornly does not give any evidence of the lack of skills. When a commodity is scarce in a certain market, its price tend to rise. The signals of the labour market go in the opposite direction, with wages being a less important part of the economy than years ago. Surprisingly, valued skills are not accordingly paid.

Slowly, a new theory is emerging. The lack of skills would not be the problem but the decrease of buyers in the labour market. In this new theory, the experts point to monopsony as the cause of the lack of offer in the labour market. As the number of companies have decreased after the crisis and subcontracting practices have increased there are fewer buyers of labour, specially in some areas, who abuse extremely of its dominant position provoking the moving of the labour force to other areas and sectors where they are better paid.

Although it is early yet, we can expect the publishing of studies in the next month following the above line of thought. Alternative ideas are always valuable to discover the truth.  

miércoles, 4 de abril de 2018

The brexit digital cliff-edge

Things are beginning to get hot on Brexit. Once there is an agreement for the withdrawal of UK from the EU, it looks that the agreement on the future partnership is extremely far away.  There is a particular uncertainty on which will be the digital relationship between both parts. Furthermore, the British Prime Minister has explicitly discarded any belonging of UK to the Digital Single Market. Contrary to her ambiguity in other areas as financial services, she has proclaimed that "the UK will not be part of the EU’s Digital Single Market, which will continue to develop after our withdrawal from the EU".

As a part of its preparedness actions for a worst case scenario, the EU has began to publish a collection of notices to stakeholders which briefly described what would be the situation in some economic sectors unless some kind of agreement is achieved. One of this notices described the implications for e-commerce due to the fact that the Directive 2000/31/EC (Directive on electronic commerce) will no longer apply to UK. As a consequence, the country-of-origin principle will cease to be applicable to the e-commerce sites established in UK and companies established in the UK providing information society services into the EU will fall under the jurisdiction of each individual EU-27 Member State, and not under UK law.

One of the UK contradictions is the aspiration to stay apart from the DSM but maintain a privileged relationship regarding data flows. In the same speech Ms. May discarded being part in the future of the DSM, she asked  for something"more than just an adequacy arrangement" and she underlined that she wanted "to see an appropriate ongoing role for the UK’s Information Commissioner’s Office".  However, the EU notice to stakeholders on the rules of data protection after UK withdrawal reminds that Britain will not be different to other third party after Brexit. What is the same, it is a warning to UK that cherry-picking will not be an option neither in the digital arena.

Among the main achievements of the DSM is the abolition of roaming charges. It is quite curious the lack of mention in Ms. May´s speeches to this topic when each when the issue is continually on the table. At the moment, it looks that  UK Mobile Network Operators will not reinstate roaming charges but it is unclear what the EU operators will do. Even more hopeless is expecting a bilateral abolition of roaming charges to be included in the Future Relationship agreement as this issue is not usually part of Free Trade Agreements (FTAs).

It is also unclear the future of transfrontier broadcasting, as Ms. May reminded in her recent speech. Again the biggest difficulty is the lack of tradition on including the issue in FTAs. The large base of TV channels which are seen in the EU and established in UK needs also clarity on this issue.

Data flows, e-commerce, roaming and audiovisual services define the more visible elements of the digital cliff-edge. Certainly, the lack of agreement of these issuer would change completely our lives.

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