The Commission is now in top gear and wants to tackle concrete single market dysfunctions again. As part of the raft of measures to respect the single market and the way in which it functions, the Commission presented a draft regulation on Tuesday 2 May. This Single Market Information Tool (SMIT) will be used to request information directly from companies. The private sector welcomes this initiative but has also expressed a certain concern about it.
During this occasion, the Commissioner for the Internal Market, Elżbieta Bieńkowska, said, “The new tool… will help strengthen Commission action and control the application of the legislation, so that citizens’ rights in the single market are duly respected and EU companies do not have to confront so many obstacles when extending their business activities and entry into new markets”.
The mechanism is directly based on tools that already exist in the areas of competition, mergers, state aid and which, according to one European Commission source, are sometimes already decades old.
The SMIT is essentially a “generic” tool that will, in very specific cases and according to strict conditions, allow for information to be requested directly from companies. We have been informed that it will never involve personal data. Requests could focus on cost structure, processing policy or products sold and help to determine whether different prices practised on the basis of customers’ nationality are justified or not, as in the case of Disneyland Paris (see EUROPE 11534) or parcel deliveries (see EUROPE 11534).
The Commission explains that it will never be able to use this new tool, except in exceptional cases, such as when there are, “serious difficulties involved in the implementation of European law”, when information is not made public or when the information requested has not been provided by a member state or legal entity, despite Commission requests.
On this basis, the Commission could, in the future (if the legislative act is adopted by the co-legislators as it stands), adopt a decision by a simple majority at the College of Commissioners, to use the tool and notify the member state where the company targeted has its corporate HQ. It should be pointed out that micro-enterprises (employing fewer than 10 people) will be exempt. If necessary, the Commission could impose penalties ranging from 1% of turnover in cases involving a first offence, to 5% in recurrent situations. We were informed that this will, “only involve extremely rare cases” and that a similar tool that already exists for checking state aid has only been used twice since it was set up in 2013.
The information communicated will remain strictly confidential, emphasises the Commission, which appears to be walking on eggshells. This information will not only be used in investigations into potential infringements but also when measuring the impact of a legislative act on the internal market or for estimating the effectiveness of action undertaken by the European Commission.
Single digital portal to facilitate access to administrative documents
The European Commission has proposed a regulation to introduce a single digital portal for companies and end users. The portal will provide a kind of single search engine in tandem with other European and national portals.
According to the proposal, any administrative procedure accessible to nationals must also be available to European companies and other European nationals. For example, in an administrative form, a section on telephone numbers should recognise the national code as well as the code for other member states. Around 13 administrative procedures are expected to be available online, particularly for requesting a birth certificate, vehicle registration, the creation of a new business or registration with a social security system.
The Commission is hoping that this initiative will be ready by 2020 at the latest. This is because expectations are high at the Commission and it has succeeded in estimating the annual time saved by companies and individuals at a figure of 855 000 hours. According to the Commission, the initiative could account for annual savings of around €11 billion for the private sector.
SOLVIT action plan. The Commission also presented an action plan to strengthen the ability of citizens and companies to use SOLVIT, the online network for resolving internal market related problems.
Private sector ambushed. The employers’ organisation, BusinessEurope, gave the European Commission initiative something of a terse welcome, although it did express “serious concerns” about the SMIT tool. BusinessEurope considers that SMIT would not be a good approach because it introduces additional administrative red tape. More importantly, it claims that the Commission proposal could generate a real danger when it comes to safeguarding very sensitive data.
EUROCHAMBRES goes even further and questions “the overall effectiveness” of the initiative. With regard to the single digital portal, this organisation believes that the Commission does not go far enough and should have included VAT related administrative procedures. On the question of the SMIT, EUROCHAMBRES regrets that the tool targets companies and not member states although it is the latter that is responsible for persisting internal market barriers.
Two major Council concerns. The Commission presented its initiative at a Council workgroup level. The member states would have certainly expressed two concerns: the first involves the fact that they have not been involved in the process enough and the second involves the possibility of the initiative provoking new internal market barriers, particularly with the SMIT tool. (Original version in French by Pascal Hansens)