Better regulation in the digital era: What is the future of business regulation? #EUPowerShift Series

On 1st of March, the Vinces Brussels office organised the second of a series of three events on the topic of shifting power in Europe, a phenomenon we are exploring through three angles according to the Vinces methodology: politics, regulation, and society. While we focused on the political angle during our first event as we discussed the potential for a power shift to the South in the Council following Brexit (conclusions here), during our second event we explored the regulation angle by taking stock of the Better Regulation agenda (see programme here).

When President Juncker appointed Frans Timmermans as the first ever First Vice President of the European Commission, he also put Better Regulation first in the order of priority of his extensive  portfolio. We knew this meant that the Better Regulation agenda of the upcoming Commission would be a significant step in the history of EU law-making. And interest representatives were eager to see what the Juncker Commission would come up with.

Since then the Commission has issued a number of communications on this topic, put in place many initiatives and the EU institutions all together have even adopted a joint agreement on how to better regulate together.  The initiatives that have been promoted include generalisation of impact assessments of legislative proposals, wide public consultations before legislating and fitness checks of the existing legal framework (known as REFIT in EU jargon)… to name but a few.

Two key points emerged from our discussion:

Suggested improvements to the Commission’s consultation process – While the Commission feels that a great deal has been achieved – and indeed it has been very active – a key point to improve is the feedback to those who have taken the time to participate in consultations so they do not feel that their contributions go into a blackbox. Also, SMEs do not have the time to take part in public consultations or speak at hearings so how can their views be taken into account?

Innovation principle and agility to lead regulators – Regulation is often playing catchup with the pace of technology development. The EU law-making process can take up to six years from the initial consultation process to national implementation. This can lead to EU efforts to regulate on digital issues to be already outdated by the time a legislation is adopted. Ideas on how to overcome this include anchoring an innovation principle in EU law-making, keeping the regulatory process focused on the objective to be achieved, and crafting legislation in a more agile way.

The way the EU regulates is probably not fit for the 21st century, and quite understandably as it was designed before the digital revolution took place. But the Commission Better Regulation team is open to ideas on how to adapt regulation to the dynamics of today’s economy. There might even be tech tools to help EU regulators achieve the massive ambition of better serving the 500 million EU citizens. As we are reaching the end of the Juncker Commission’s mandate, the Commission will open a new consultation to take stock of its Better Regulation work. This will be an opportunity for all to reinvent EU regulation and to imagine alternative ways to achieve public policy objectives.

Laurence Modrego