DIGITAL TRANSFORMATION: RETHINKING REGULATION Digital Day, Accountancy Europe 29 th March 2017 Presentation by CE partner Helge Sigurd Næss-Schmidt
Digital transformation and regulatory implications Dramatic Creating Three key changes in the Breaking down entirely new regulatory economics of barriers to entry products objectives information Collapsing cost of Encourage In key of collecting, Fixed costs innovation and treating markets, of widen consumer disseminating really new “space” production data products slashed introduced Allows final Create a level consumers to get playing field so much closer to between products the production and players across borders and firms site Digital product Value of versions have historical substantially Keep an eye on distribution underlying objectives different Falling search networks such as consumer product costs protection and undermined characteristics confidence in market integrety 2
Five examples from our line of work B2C digital Media Financial Competition Auditing I services markets services law Old day:Time Old days: private Old days: consuming, on in EU) co-existence print press, public customer went to site, physical Consumer tax real time radio/tv physical branch, of physical examination all info into a key issue (VAT and e-based book products and Today: meeting distribution Today: e-tools at the middle, on channels lead to massive demand Today: front line savings of electronic customer Destination manhours platforms service/ back principle office functions laudable increasingly Rethinking principle but… Cross-border delivered from regulation fx challenges in any location Challenges external audit advertisment the concept requirements for revenues SMEs of what is a …not realistic product and with small, Exploding Lower a non-repeated leakage rates of compliance costs VAT and public geographical sales supplied local tax and and more need service policy out regulation for forward market across the of sync looking data fx globe CMU driven 3
The way forward: substance over form Key policy Proposed Now areas and direction industries Taxation of products Be clear about the underlying purpose Regulation often industry based Focus on the function Consumer protection not what industry is legislation providing the service Hence cover traditional suppliers Avoiding regulatory (a bank, a Financial services arbitrage more newspaper, a..) and the professions! important 4
Relevant studies from Copenhagen Economics • Effects of VAT-exemption for financial services in Sweden • Wage tax on a rapidly changing Swedish financial sector • Why and how to apply VAT to financial services • Economics effect of online marketplace bans • E-commerce imports into Europe: VAT and customs treatment • Simplifying and modernising VAT in the digital single market • Competitive impact of four online services recently launched by the Swedish public service broadcaster (in Swedish) 5
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