Can We Win by Playing by Europe’s DSM ‘Rules’?

In the days when the internet and digital technologies redefine existing business models and constitute entirely new business segments, moving from fragmented national markets to the Digital Single Market is one of the main priorities of the Czech Presidency of the V4 Group. Prowly was invited for a V4 Digital Day event as one of progressive and successful companies from the V4 countries operating in the field of digital technologies. After conference I asked Allegro Group, Costlocker, Magyar Telekom, Innomine and Mentegram about DSM.

Europe has launched its strategy for a Digital Single Market throughout its member countries. The success of this strategy relies on the ability of European lawmakers and politicians removing barriers to digital trade and creating an environment to foster the growth in digital platforms and skills necessary to support a fast growing digital economy.

It is easy for others, especially the US, to see the Digital Single Market strategy as a pretext to regulate and restrict the popularity and pervasiveness of foreign companies like Google, Amazon, Facebook and Netflix. „Certainly, the European Commission will need to demonstrate that its focus is more on enabling rather than simply protecting a future industry” – David Glance, Director of UWA Centre for Software Practice, University of Western Australia, writes in one of his articles.

What are the benefits from the efficiencies of opening up the digital markets in Europe? What actually needs to happen for a global Digital Single Market to be successful? What is the main aim of the European Commission in proposing the Digital Single Market agenda? And finally – what are the greatest concerns with DSM? European Commission VP Andrus Ansip has summarized the essence of the Digital Single Market (DSM): „Consumers need to be able to buy the best products at the best prices, wherever they are in Europe.” Lets read what some V4 Digital Single Market conference participants say in this topic:

Chris Sherwood

Head of Public Policy at Allegro Group:

“we need to think of digital as an opportunity for Europe, and not a threat”

Europe vs USA. How can we beat that competitor?

I’m not sure that this is actually true for everyone in Europe. Many of the leading digital services we use have European origins – e.g. Skype, Spotify, Candy Crush, BlaBla Car, Klarna, etc. But to take these services and make them as big and successful as the US giants, we need to support our own region rather than trying to defend against players from abroad.

Europe growth supported by digital technologies – with what we should start?

One of the first things to do is re-think some of the provisions of the proposes Data Protection Regulation. At the moment, the text on the table isn’t striking the right balance and we risk sending big data entrepreneurs outside Europe. Next, we should resist the urge to protect traditional European industries that are disrupted by technology – we need them to modernise more quickly.

What are the greatest concerns with the DSM?

I think the main concern is that the pro-digital, anti-protectionist philosophy of the European Commission will be eroded by forces that want to ‘defend’ Europe against digital. This cold result, for example, in new rules imposing greater liability on intermediary platforms for allegedly illegal content (e.g. counterfeit goods on marketplaces).

Gábor Vicze

CEO, Innomine:

“digital signle market strategy and its rapid implementation is key to foster European ICT industry”

Digitalization is key for the European industry, it is a fundamental for European competitiveness, growth and also for jobs. This phenomenon is called as digital transformation where European industry is behind US. For example only 2% of European SMEs fully utilize the opportunities of the digital technology.

Digital signle market strategy and its rapid implementation is key to foster European ICT industry. Europe needs to encourage digital skills and entrepreneurial attitude. There are approx. 1 million jobs not filled while at the same time unemployment is a pressing question in several member states. The main point is the lack of digital skills – so Europe needs to invest to training both curricular (starting from primary school until university) and extracurricular training (adult education).

On the other hand we need more entrepreneurs, there must be more funding and support for digital entrepreneurs. We propose to set up digital excellence centres, accelerators and encourage investment into startups.

Also, European big corporations must connect more with the entrepreneurial ecosystems of Europe to tap into the creative power of startup communities.

Kamil Skramusky

Co-Founder, Costlocker:

“what should we do now?”

For us is a single digital market an issue that we haven’t think about until we had a speech at V4 Digital Day. The thing is that we don’t have any opportunity to find any useful information about this issue. Basically, we’re missing any institutions, conferences or private talks for small companies like ours. We always thought that this issue is dedicated only to huge enterprise businesses like Google, Facebook etc. But thank to V4 Digital Day we changed our view on this topic. And now we feel it’s a topic that is related to us as well. But what should we do now?

Balázs Mathé

deputy CEO for Legal and Corporate Affairs, Magyar Telekom:

“there are three main ingredients to a successful startup…”

We, as a member of a larger family, the Deutsche Telekom Group, experience it on a day-to-say basis through a very close cooperation with our peer companies in the Czech Republic, Slovakia and Poland. We have a common cultural heritage, a similar approach to and roots of doing business and we are also confronted with comparables obstacles and difficulties in regulation.
The Digital Single Market Strategy and its regulatory and policy actions determine our industry’s future, the competitiveness of our countries and Europe as a whole. We therefore particularly applaud to have consultation on the matter.

It is not by accident that this initiative comes from the Czech Presidency of the V4. The host country has a particularly vibrant start-up landscape and the Czech government introduced the digital agenda among its V4 Presidency priorities.


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Digital Single Market Strategy

The current rules in place are largely outdated. Investments in the telecoms networks in the EU continue to remain much below those in North America and the Asia-Pacific region.

Europe cannot afford to wait for five or more years

– Main reason for this gap is the heavy-handed regulation of the telecoms sector in Europe compared to other world regions.
– The three building blocks of the reform should be a regulatory level playing field across the digital economy, revised rules for network access and an ambitious spectrum policy reform. Sector-specific regulation needs to be substantially simplified, red tape should be cut. A coherent framework and a level playing field with OTTs are needed.
– We call for a new regulatory model. There is a need for giving more flexibility for those investing in networks.
– Europe cannot afford to wait for five or more years, therefore a new and comprehensive EU regulation, directly applicable in all EU Member States – instead of a simple update of the telecoms Directives – should be considered.
– Based on experiences of the Digital Hungary program, Hungary could be a frontrunner to advocate for an urgent and comprehensive regulatory reform in EU.

Martin Vician

CFO Mentegram:

“EC should maintain united legal framework for all EU countries”


EC should maintain united legal framework for all EU countries. On the best effort basis stand up towards global challenges of digital world and minimize barriers and paperwork with authorities.

The biggest challenge of Single Digital Market Strategy

Final wording of the DSM and timeline of legal implementation in all EU countries and the positive impact on DSM (public,private sector and governments).

Corporation and startups – the best model of cooperation

Per my experience it is Wayra like incubator projects that set new standard of co-operation between corporations and start-ups.

Greatest concerns

Legal uncertainty – especially tax, business and patent codes. High cost for market entry is some countries and scalability of their business.