Select Committee on European Union Minutes of Evidence


Examination of Witness (Questions 1035 - 1039)

WEDNESDAY 7 JUNE 2000

MR OLLI REHN

Chairman

  1035. Mr Rehn, firstly an apology for not being present when we promised to be present yesterday, it was entirely my fault. We are grateful that you have found time for us today because you are one of the important parts of the programme whilst we are here in Brussels and we would have been very sad indeed if we had not had a chance to speak to you. We have posed an extraordinarily long list of questions. I do not know if you want to open up with a few general points.

  (Mr Rehn) First of all, I am very glad to meet you, not least because of the well known high quality of the reports that the House of Lords tends to produce but also because of the fact that my former supervisor, Lord Wallace of Saltaire, is among your ranks. I think it was only fair and just that he was knighted because of guiding me through D.Phil. It was a fair deal for him. I will take the call for evidence as the starting point and if you will allow me I will make a few comments concerning both eEurope and especially e-commerce because I gather that is the main issue for you today and in the context of this report. I take the viewpoint of governance or management first because I think that is underpinning the questions that you have posed.

  1036. Yes.

  A. These two exercises overlap, the eEurope Action Plan on the one hand and our work on e-commerce on the other hand. We have two distinct ways of managing this, although they overlap to some extent. In eEurope we have a very clear responsibility in the sense that President Prodi invited Mr Liikanen to co-ordinate work inside the Commission some time in September, even before the Commission took office, and Mr Liikanen and his Cabinet and DG Information Society, have worked at different levels as sub-contractors for Prodi. We have co-ordinated the work of about ten Commissioners who have mainly contributed to the eEurope Action Plan which has three main lines but underneath that it has 11 different action areas in its final form. Why 11 I do not know but that may have some relation to the most popular sport in Europe.

  In e-commerce, by contrast, we have a spread responsibility. It may well be that e-commerce is an issue which is not very easily separated into one portfolio or one dossier but it cuts across all disciplines, all Directorates-General, all Commissioners' portfolios. Therefore, one might ask whether it would have even been wise to give e-commerce to only one Commissioner because of the necessary overlap between the different Commissioners' fields of responsibility. Maybe these two reasons are key to the background why e-commerce is organised as it is in the Commission.

  Concerning the eEurope Action Plan, I guess you are probably aware that we published the original initiative in December, produced a progress report for Lisbon, which was endorsed by Lisbon, and now we have produced a final Action Plan, which hopefully will be endorsed and dealt with by the Feira European Council. After it is endorsed or adopted by the European Council, we intend to start the practical implementation, which is on the way already, but we will intensify that with the Member States. Our aim is to have the first monitoring point at some stage next spring during the Swedish Presidency, although the Council may want it already for the Nice Summit.

  Concerning e-commerce, we are well aware that more than 80 per cent of electronic business is, in fact, B2B, business to business, electronic commerce and, therefore, that is the most essential factor in the development of electronic commerce in Europe or all over the world. In a way, because B2B e-commerce is often dependent on a small number of decisions of some major companies, such as Ford and General Motors, or now the European airlines who have combined their forces to create an electronic marketplace for airline tickets, it can often be described as a revolution in because the speed of development is faster in that field. Meanwhile, business to consumer e-commerce is more evolutionary in the sense that there customs and traditions and ways of doing business, ways of buying, tend to change slower than in the field of business to business where, for instance, sub-contractors simply have to adapt to the new circumstances if, for instance, Ford and General Motors take up e-business activities. Anyway, business to consumer e-commerce is a strong focus of the Commission, that is perhaps the area where we can make some difference, or European legislation can make some difference, even more than in the area of business to business because that is even more enterprise and business driven. For the purposes of co-ordination inside the Commission we set up a formal working group last December before Christmas with five Commissioners. The five Commissioners are supported by a working group of five Cabinets plus the President's Cabinet. It includes both the Cabinets and corresponding Directorates-General. To my mind this working group has compensated to a significant extent for the lack of clear single responsibility for e-commerce. Until now we have dealt with the Brussels Convention and we have been able to achieve first of all an internal consensus inside the Commission on how to proceed, and we have also been able to communicate the outcome of that discussion to both the Council and the Parliament; we are currently waiting for the European Parliament to adopt its position, which was unfortunately delayed in March because the relevant committee could not achieve a majority for any decision; we are supposed to get the opinion in June from the European Parliament. Also we have focused on co-regulation. We have a Communication in the pipeline, together with Commissioner Bolkestein, and the next steps will focus clearly on Alternative Dispute Resolutions, Trustmarks, codes of conduct—like I presume Martin Power has already told you about. Commissioner Byrne is the primary Chef de File in that area.

  Finally, the question which was in one of your briefs, whether the objectives of the eEurope Action Plan will be achieved in the field of e-commerce by the timetable, by the end of 2000, I will wind up this opening statement by saying that, yes, in my view we should be able to achieve this objective. We have roughly five major legislative proposals in the pipeline or adopted to create a single on line market for e-commerce. Firstly, the Electronics Signatures Directive was adopted at the end of November last year and it should be transposed by—according to my information—11 Member States by the end of this year. Secondly, the general e-Commerce Directive is adopted and transposition of that Directive is well under way in the Member States. Thirdly, concerning the Alternative Dispute Resolutions, which we see as very significant, a key part of creating consumer confidence, we have created an e-confidence forum. On our part, as I said before, we have achieved a consensus on how to proceed with the Brussels Convention and we are working also towards more global solutions in the framework on the Global Business Dialogue on e-commerce. We have at least two other significant elements, one is the Copyright Directive, which is now very close to conclusion. The final attempt—and I hope it is really the final attempt—should be made next week. There is possibly an extraordinary COREPER meeting for this Friday to try to tackle this and try to finalise the work on the Copyright Directive. A compromise is very close there. Finally, the Dual-Use Regulation concerning civilian and military use of encryption products is important for trust and security of electronic communications, to create a single market for encryption products. That should be adopted on 13 June, ie next Wednesday. All in all I have to say that in the field of the legal and regulatory framework for e-commerce in Europe we are well on the way for the moment.

  1037. That is very helpful indeed. Thank you. We have got a limited amount of time and in a sense you have covered answers to a number of questions. You have made some intriguing points. We are particularly interested in the United Kingdom in looking to see better joined up government and part of our remit here is to look for better joined up government within the Commission. It is interesting to hear your observations. I was a bit intrigued, I would like you to say a little bit more about the co-chairmanship of the Co-ordination Committee of the five Commissioners working with Commissioner Bolkestein. Is it working effectively? Do you see it being a permanent feature? How accountable do you see it and accountable to whom? Particularly what struck me was that the eEurope paper was devised on the paper of submissions from the ten Commissioners but here we have only five Commissioners coming together. Why are the other five not participating and should they not be participating too?

  A. In fact, concerning eEurope first, we worked in order to streamline the internal preparatory process. We avoided the traditional inter-service consultation which often tends to cut out all the edges and makes everything consensual but also often not very punchy and not very relevant. Therefore, we worked by and large through bilateral contacts around ten Commissioners, including Commissioners like Vice-President Mme. de Palacio who is responsible for transport but which is not absolutely relevant for policy-making in e-commerce.

  1038. At the moment.

  A. At the moment, that is true. In the US they already face problems of transportation due to e-commerce.

  1039. And health.

  A. Health, yes, that is true. Then we had also Commissioner Barnier responsible for regional policy and structural funds and that is a significant part of the European initiative but not necessarily of e-commerce. The two areas eEurope and e-commerce have different coverage which justify this composition. The Commissioners are there clearly for their responsibilities. Liikanen for the Information Society, Lamy for trade policy, Byrne for consumer protection, Bolkestein because of the internal market and we have the President's Cabinet involved, of course, and of course Mr Vitorino because of the justice and home affairs aspects. It is difficult to judge whether it has worked well or badly because we have not tested the other alternative. It has worked better than we expected originally last autumn because we thought this was a very dispersed field of responsibility. As I said, we have tried to compensate for that dispersal by setting up this working group.


 
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