Monday, December 12, 2011

Cell Phones and Online Shopping Sites: Barriers to the European Union’s Single Market?

The European Union’s vision of a single market has evolved significantly since the Treaty of Rome established the European Economic Community (EEC) in 1957. The single market was “completed” in 1993 with the establishment of the four freedoms granted to all EU citizens: the free movement of goods, services, people, and money. Although the European Union has come a long way in the past 54 years, modern technology continues to challenge the effectiveness of single market initiatives.

In the European Union, there are many barriers to online transactions that occur across borders as well as steep roaming costs for cellular phone users who use their phone outside of their resident member states. While these barriers may seem trivial compared to issues like the Euro crisis, they can be seen as counterintuitive to the idea of a single market and the four freedoms promoted by the European Union.     

Poland, the member state currently holding the council’s rotating presidency, has made it a priority to “deepen the single market and complete its formation so that its growth and potential can be fully tapped into.” Specifically, the European Union’s Programme of the Polish Presidency of the Council of the European Union states that the Polish presidency will strive to hasten the development of the digital services market, eliminate barriers to cross-border online transactions, and attempt to reduce the cost of roaming services. These prerogatives for growth in the EU are inextricably related to the functioning of the single market and, if not addressed, can decrease its legitimacy. For instance, one of the EU’s four freedoms is the free movement of goods in the single market area. During his lecture at the University of Illinois, the Polish Deputy Chief of Mission Maciej Pisarski explained a scenario in which he tried to order a textbook from another European Union member state, but the shipping exceeded the cost of the book. In fact, it would have been cheaper to ship the book to Australia than to the member state of Poland. How is the European Union truly a single market when 60% of online cross-border transactions fail, creating barriers to the free movement of goods?

In a similar scenario, European Union citizens often are charged high roaming fees when they use their cell phone in a different member state. Although the costs are a burden for citizens, they also can impede the free movement of people in the EU. How are men and women who travel to different member states as part of their occupation supposed to keep in touch with family at home? If the EU promotes the free movement of people, then telecommunications technology should be conducive to their mobility.

In a 2010 Eurobarometer flash survey examining transactions between businesses and consumers, approximately 6 in 10 businesses reported that problems with cross-border transactions occasionally deterred them from conducting cross-border business. In order for member states to be resilient in the face of economic crisis, it is imperative for the single market to evolve with technology and ensure that the four freedoms are not obstructed. With the Polish presidency placing some emphasis on goals for telecommunications and digital commerce, the EU’s single market will have a chance to remain a model for future similar initiatives.

Allyce Husband is a first-year student in the Master of Arts in European Union Studies program at the University of Illinois. She received her Bachelor’s degree in Communication and Psychology from the University of Illinois in 2011. As an undergraduate, Allyce studied abroad in Florence, Italy. She was awarded a Foreign Language and Area Studies (FLAS) Fellowship for 2011-2012 to continue studying Italian as a graduate student. She plans to research immigration issues in the European Union.


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