Werner Stengg, Head of Unit “E-Commerce and Online Platforms”, European Commission

Safeguarding citizens and competition

Regulation and digital transformation: a powerful combination

TECHNOLOGIES RELATED TO AI AND DATA USE WILL SHAPE THE COMPETITIVE LANDSCAPE OF TOMORROW

Werner Stengg is Head of Unit in the Directorate General in charge of Communication Networks, Content and Technology at the European Commission. He is responsible for E-Commerce and Platforms and is in charge of managing the E-Commerce Directive, the so-called Geoblocking Regulation, and of developing policy and legislation in the area of online platforms. We asked what policy makers can do to support a fair and level playing field in the TCG industry.

The electrical retailing industry is affected by the digital transformation process just like any other sector or economic activity. Overall, this process is driven by fast technological change as well as by constantly evolving consumer needs and expectations. The role of policy makers is focused on facilitating this transition for those that may be lagging behind, ensuring that the data and other interests of consumers and citizens are safeguarded, and that competition in the markets increasingly dominated by digital players takes place in the most transparent and fair way possible. In terms of level playing field, the key question is to establish to what extent rules that have traditionally governed the electrical retailing industry need to be adapted to the digital world of today – i.e. modernised and/or simplified and/or mainstreamed to all economic actors.

How can traditional retailers not only survive, but thrive in e-commerce?
The old dichotomy between bricks-and-mortar retailing and pure e-commerce businesses has long been overtaken by events. Business models and technologies have evolved, and the consumer has changed with those. Today’s consumers, whose expectations in terms of choice, quality, value-for money and – importantly – convenience have grown exponentially, expect that their needs are satisfied in the most consumer-friendly and targeted way possible.

In that, they may not necessarily think in terms of “online versus offline”, as long as their needs are satisfied in the most flexible, effective and efficient ways. Any retailers, whether traditional or new ones, will be successful in the long run only if they manage to combine the human element with technology, and a satisfactory online experience with flawless offline logistics in the most seamless way.

How will future regulation change as digital transformation progresses?
That’s the €100m question for any policy maker. Normally, regulation should only come in where markets have proven to be ineffective, and regulatory intervention should be as proportionate and targeted as possible. On the other hand, the digital transformation process changes our societies and economies so fundamentally that waiting for problems to occur may no longer be adequate.

Technologies related to artificial intelligence and data use will shape the competitive landscape of tomorrow, and so will those digital champions that will be fastest and best in translating opportunities into market realities. Regulators will quickly have to acquire the knowledge (about technologies, their potentials and risks) that will allow them to gauge the need for changes to existing economic and competition policies.