THE DIGITAL SINGLE MARKET AND INTERNET OF THINGS

THE DIGITAL
SINGLE MARKET
AND INTERNET
OF THINGS
OPEN RIGHTS GROUP
BRIEF

Importance of Digital is that its communications are controlled

by software and it links to a computer at
Single Market policy the remote end. IoT devices may be able to
operate autonomously, and are typically data
Internet of Things (IoT) concerns devices that driven – gathering and processing data and
are connected online and communicating operating on the basis of it. The systems tend
with each other. It is sometimes described as to be complex, comprising multiple layers of
machine to machine communications, rather both hardware and software. Compatibility of
than person to person. Typical examples devices and software is important, as is inter-
include robots – which may be manufacturing connectivity.
or domestic equipment – health and fitness
IoT services typically comprise not only
monitoring devices, crop management
the device (for home, business or public
systems, alarm systems and other ‘smart
infrastructure) but also embedded sensors,
home’ devices. Future developments in this
communications services for transmission
field encompass driver-less cars and sensor-
to and from devices and sensors, cloud
driven infrastructure for improving traffic
computing services for data processing
management and energy efficiency, and so-
and storage, and remote interfaces for
called smart cities.
management.
Hence, Internet of Things ranges from a
The Internet as a technology knows no
device be associated with a person, such
borders, but the companies that run it, operate
as a fitness monitoring device, to a whole
inside borders and therefore can be regulated.1
new infrastructure comprising thousands
of devices or sensors. A key characteristic The Digital Single Market establishes the legal

1 Goldmith and Wu (2006) Who Controls the Internet , Oxford University Press.

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THE DIGITAL SINGLE MARKET AND INTERNET OF THINGS

framework for electronic communications and

connected devices in the European Union, and
EU law and how and
as such is establishes the ground rules for the how it addresses IoT
operation of IoT systems and devices in the
European Union. The Digital Single Market
The Digital Single Market translates the idea • laws govern the wires and physical
of the single market for goods into the digital infrastructure of electronic
space. Where the single market for goods communications and broadband networks,
removes barriers like customs and tariffs, the including mobile. A common set of rules
Digital Single Market removes barriers to across all 28 Member States.
people using online services across all the 28
States. It is about removing red tape and legal • laws that govern the operation of
barriers which might make businesses less ‘information society’ services, which
confident to offer their services across borders, run over the top of the networks. The
or which might make people hesitate to use official definition is “any service normally
such services. It is also about regulation of provided for remuneration, at a distance,
services according to a common set of rules to by means of electronic equipment for the
support both service providers and users. processing (including digital compression)
and storage of data, and at the individual
The DSM gives developers the ability to play request”. They include auction sites, search
in a market of 28 countries and around 513 engine services, social media platforms,
million people,2 compared with a market of 66 cloud computing services, Internet Service
million in the UK3. The DSM removes barriers Providers. Some IoT services will fall within
for start ups, who may offer their services this remit.
through the entire 28, provided they comply
with the law in their home State. The size of • aims to facilitate the free movement of
the EU market is such that European firms these services in order to create economic
and start-ups can get the critical mass to scale growth. A service operating legally in in
up and compete more effectively against US one Member State is legally allowed to
companies. operate in any one of the 28
• addresses the responsibilities and liabilities
of network providers and information
society services, including data privacy,
information security and consumer
protection. The scope of DSM also includes
copyright and intellectual property
rights with regard to online systems and
databases.
• has been a significant factor in the
development of smart phone technology
and growth of mobile broadband services
• lays the foundations for competition on
fixed broadband services, opening up

2 Eurostat News Release EU population up to nearly 513 million on 1 January 2018 115/2018 - 10 July 2018
3 Source: Eurostat https://ec.europa.eu/eurostat/tgm/table.do?tab=table&plugin=1&language=en&pcode=tps00001

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THE DIGITAL SINGLE MARKET AND INTERNET OF THINGS

former monopoly markets. The British
government was a key driver of this policy.
• protects the rights of citizens ( privacy, free
speech, due process)4 consumers
•
5
and businesses (right to conduct a
business)6, as established by the Charter of
Fundamental Rights
• EC J arbitrates in commercial disputes and
answers questions of legal interpretation
from national courts.
What may change
after Brexit?
With Brexit comes change. The UK government
has confirmed that it will be leaving the
Digital Single Market7. In doing so, it breaks
away from the common set of rules. For
developers based in Britain, or offering services
into Britain, the legal landscape will shift. In
particular, cross-border service provision into
and out of the UK will be affected. Issues will
include compatibility of services, legality of
transmitting and processing personal data, and
regulatory jurisdiction. IoT developers will have
to figure out how to navigate this new legal
landscape and its consequences.
The change will affect all services delivered
across the UK border into the European Union
and vice versa. Service providers will need to
consider location of users, location of data
processing, hosting, and service provision, and
that of any third party sub-contractors, which
could all be in different jurisdictions.
Britain has agreed to transfer EU law into UK, in
order that the law as it stands will continue to
apply on the day after leaving. Some Directives
are enshrined as UK legislation, such as the
Communications Act 2003.
However, other EU Directives have been
transposed as Secondary Legislation, also
known as UK Regulations, and yet others, EU
Regulations, may not have been transposed
at all, as they apply immediately from the date
they are officially in force in the EU. These
raise specific concerns, that when this policy
area is repatriated after Brexit, the British
government may make changes and diverge
from EU law, and it is understood to be seeking
trade agreements with countries, such as the
US, that may mandate different standards. In
the digital context, where connectivity and
compatibility are fundamental to being able to
scale up services, this is a concern, notably as
many IoT services are still nascent and the EU
will be influential in shaping them.
Issues
British-based IoT services risk losing the
ability to offer services, barrier-free, across 28
countries. Brexit will affect:
Broadband networks and cloud computing
services used to deliver IoT services
Cloud-based platforms or services used as a
development environment
Electronic communications services used by
developers in the context of their work, such as
mobile roaming for data and broadband
Considerations for IoT developers will include

4 European Charter of Fundamental Rights Articles 7,8,11, and 47. Corresponding rights in the European Convention on Human Rights, which the UK will
continue to uphold, are Articles 8 and 10, and 6.
5 Ibid 3 Article 38
6 Ibid 3 Article 16
7 PM Speech on our future economic partnership with the European Union 2 March 2018 https://www.gov.uk/government/speeches/pm-speech-on-our-
future-economic-partnership-with-the-european-union

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THE DIGITAL SINGLE MARKET AND INTERNET OF THINGS

alignment v divergence to/from EU rules,

red tape around data protection, and new
regulatory arrangements for cloud services,
potentially leading to increased costs and / or
a requirement to move from the UK into the
EU 27 to protect the ability to operate services
without barriers and scale up the a competitive
level.
The UK government says that it wants a ‘digital
relationship’ with the EU addressing digital
trade, technology and digital infrastructure.8
This could include IoT, although it is not
specified. However, the UK government is
relying on the EU allowing it back in certain,
specific areas where being out, will be negative
for the UK. This has all yet to be negotiated.
The UK government is also talking up its
participation in EU stakeholder groupings,
such as a European Artificial Intelligence
Alliance, which still puts it on the outside of the
legislative process.

Open Rights Group (ORG) is the UK’s only grassroots

campaigning organisation that works to protect your
digital rights.

We believe people have the right to control their

technology, and oppose the use of technology to
control people.

We raise awareness of threats to privacy and free speech

and challenge them through public campaigns, legal
actions, policy interventions and tech projects.

Brief prepared by Dr Monica Horten, editor Javier Ruiz

All materials except logos CC-BY-SA 3.0 unported

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8 White Paper July 2018 The Future Relationship between the United Kingdom and the European Union