Quantitative Assessment of the European Added Value of Digital Services Act​

The rapid evolution of digital services means that the current EU regulatory framework, i.e. the EU e-Commerce Directive (ECD), faces relevant limitations in dealing with new challenges. The EU aims to undertake a thorough revision of this framework. This initiative has been named the ‘Digital Services Act Package’ (DSA). 

This piece of work for the European Parliament assesses the European added value assessment of the policy options that the DSA package will likely include to amend essential pieces of the current regulation of digital services (mainly the ECD and the Platform to Business Regulation) in response to the problems that prevent the full implementation of the Digital Single Market (DSM). 

The policy options considered in the report are based on previous studies, the Commission Digital Services Act (DSA) package proposal, and the stakeholders position papers. Four groups of policies are identified to address the limitations in the current legal framework regulating digital services in the EU. The European Added Value is the additional net benefit that can be generated compared to the net benefit achieved by action by any Member State. 

Cambridge Econometrics’ E3ME macroeconomic model is used to measure the economic impacts in the EU of two policy packages, compared to the baseline: 

  1. Enhanced consumer protection and common e-commerce rules 
  2. Creating a framework for content management and curation that guarantees the protection of rights and freedoms. 

Key findings of the quantitative analysis:

  • Over the period 2020-30, the first policy package will increase growth in EU GDP by 0.06 percentage points over the baseline (an additional €47 billion over the 10 years). 
  • The impact of the second policy package is lower, producing a cumulative GDP impact of €29 billion. The joint effect of these two policy packages is 0.11 percentage points more GDP growth than in the absence of EUlevel common action. By 2030, the two policy packages will create 82 000 new jobs compared to the baseline. 
  • Overall, for the policy packages quantitatively assessed, the relative size of GDP impacts reflects the relative size of the direct impacts. Due to data availability and the methodological approach, some direct economic impacts are considered as inputs for the macroeconomic model. However, there are other impacts that might increase the overall economic impact. Therefore, the estimation of the macroeconomic impact on growth and job creation should be considered as lower bound of the overall impact on the economy. 
Cornelia Suta Principal Consultant cs@camecon.com