EU set to reveal digital strategy on Wednesday

A leaked document suggests the European Commission will launch a probe into U.S. online platform providers

Google could face increased scrutiny from Wednesday, when the European Commission outlines its strategy to make European companies more competitive online, and to simplify online shopping and movie streaming across borders.

Since the Commission outlined its Digital Single Market strategy in March, leaked drafts of the strategy have revealed details of how it aims to create one market for digital goods and services across all 28 EU countries.

A major concern for the Commission is the growing power of the U.S. tech companies providing the search, app store, e-commerce and social media platforms on which many online businesses rely.

The Commission will conduct a "comprehensive assessment" of the role of such platforms, according to a leaked document published by the Financial Times last week.

While the draft did not name companies, the probe's focus on transparency in search results, including paid links and advertising, will concern Google. It will be separate from ongoing EU antitrust investigations into the company, the FT reported.

Other tech companies could also expect some scrutiny. The Commission said it will review telecommunications and media regulations to adapt them to IP-based services such as Skype, WhatsApp and Netflix, which are increasingly being used by consumers instead of traditional forms of communication or entertainment.

The Commission also wants online platforms to facilitate the swift removal of illegal content. While no final plans have been presented yet, the Computer & Communications Industry Association (CCIA), representing platform companies Amazon.com, Facebook, Google, and Microsoft, among others, reacted to the leaks on Monday, saying that it would be a bad idea to regulate platforms as regulation would hit European companies hardest.

The CCIA also strongly opposed what it called a "duty of care" for Internet companies to monitor, judge and remove user or third party content on networks and hosting platforms. This, it said, would undermine existing measures in place to respond to problems online that strike a balance between freedom of speech, commercial freedom and controlling infringing material.

Boosting cross-border online purchases within the EU is also a goal for the Commission. While the Internet should allow people to buy or sell further afield, over half of all attempts at online cross-border orders fail because the seller does not serve the country of the consumer, according to Commission figures. Selling across borders is particularly difficult for small online businesses that struggle with the cost and complexity of having to deal with foreign value-added tax rules. The Commission wants to simplify VAT rules to boost cross-border business -- after complicating them earlier this year to prevent multinationals such as Google and Amazon.com from routing digital purchases through low-tax regimes.

Digital purchases can simply be downloaded, but anything else has to be delivered, often at high cost, so the Commission wants to bring down cross-border parcel delivery prices. Early next year it plans to improve transparency and enhance regulatory oversight of parcel delivery, according to the leaked draft.

By the end of 2015 it also aims to propose changes to copyright rules so people can access legally acquired content, including music and movies, from anywhere in the EU, not just their home country.

The Commission is also seeking swift adoption of the Data Protection Regulation which should address concerns of Europeans who worry that they have to reveal too much personal data online. The new rules should be ready by the end of the year.

Further details of the proposals will be published Wednesday. The Commission declined to comment on them ahead of publication.

Loek is Amsterdam Correspondent and covers online privacy, intellectual property, online payment issues as well as EU technology policy and regulation for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to loek_essers@idg.com

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Loek Essers

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