The European Union is the world’s largest economic entity, bringing together 28 countries into a single market that accounts for 20% of world imports and exports. But is it a great place to be a reader or a bookseller? The European Council - a body that defines the EU’s general political direction and priorities – is concerned it might not be. A recent debate on the digital economy hosted by the Council led it to make the following statement: -
"There is a need to address the bottlenecks in accessing one’s ‘digital life’ from different platforms which persist due to a lack of interoperability or lack of portability of content and data. This hampers the use of digital services and competition."
This statement comes some months after a report published by the European and International Booksellers Federation (EIBF) that was reported in The Bookseller as offering ‘no convincing technological reason preventing e-book interoperability between different formats and platforms’. The EIBF report then went on to criticise e-reading platforms for making it difficult for consumers to move between e-reading ecosystems through the use of proprietary ebook formats (instead of the ‘open’ EPUB3 format) and DRM.
The European Council’s call to address the problem of interoperability across Europe isn’t restricted to publishing. It came as part of a general call for reform to EU copyright framework. Yet it, and the EIBF report, point to an interesting paradox in the relationship between technology and the book business across Europe. Despite being the world’s largest common market, digital reading in the European Union is deeply fragmented.
This point was perhaps most forcibly made in an exhaustive report on the Global Ebook market by analysts Rudiger Wischenbart. This identified a number of factors that it believed was holding back the growth of the digital book business in Europe. Some of these related to the national, linguistic and cultural diversity of the 26 countries that make up the Union, but the key factor it said was inhibiting the development of an integrated book market was a tension between the way the business is viewed and regulated at European Commission and individual state level.
Rudiger Wischenbart says that ‘While the central institutions of the European Union are calling on publishers, retail platforms, and national governments to embrace digital change more boldly and create a single market for ebooks’ member states have been pulling policy in the opposite direction. Luxembourg’s unilateral decision to reduce the VAT payable on ebooks to 3% from 15% gave it a competitive edge over other countries that comply with EU legislation that defines an ebook as software and therefore exempt from preferential VAT rates (even though these are not uniform across the Union). Earlier this week it had seemed that the EU would resolve the ongoing VAT situation by harmonising the rate payable on ebooks across Europe, but a final decision has now been delayed to when the European Council next meets in December.
The regulatory and taxation landscape has been further complicated by countries such as France and Spain passing new laws (or simply tolerating practices) that define ebooks as books. Then of course there is the matter of fixed book prices, which are enshrined in law in half of EU member states but set by the market in others.
All this adds up to a situation where the digital book industry is bedevilled by complexity at the regulatory, taxation and technological levels. The fact that the EU’s central institutions are addressing the VAT issue, however, suggests that it is committed to exerting more control from the centre in order to create a more unified book market.
More recent rumblings that the EU is turning its attention towards encouraging greater interoperability between e-reading ecosystems is also very interesting, given what happened after the Commission won its Microsoft competition case. This significantly affected the European browser market by forcing Microsoft to present new Windows users with a choice of competing internet browsers instead of installing its own Internet Explorer software as default from 2010. This decision, which was controversial at the time, effectively ended Internet Explorer’s dominance of the European browser market and created a situation in which as of October 2013 3 different browsers (Internet Explorer, Firefox and Chrome) each hold over 20% of the market across the EU.
Whether the European Commission will want or need to take a step beyond encouragement and into enforcement remains to be seen, but as a body committed to greater harmonisation of regulatory and technological standards, it seems simplification is the order of the day in Brussels.