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Regulation OTT Regulation OTT Regulation OTT Regulation MINISTRY OF SCIENCE, TECHNOLOGY, INNOVATIONS AND COMMUNICATIONS EUROPEAN UNION DELEGATION TO BRAZIL (MCTIC) Head of the European Union Delegation Minister João Gomes Cravinho Gilberto Kassab Minister Counsellor - Head of Development and Cooperation Section Secretary of Computing Policies Thierry Dudermel Maximiliano Salvadori Martinhão Cooperation Attaché – EU-Brazil Sector Dialogues Support Facility Coordinator Director of Policies and Sectorial Programs for Information and Communication Asier Santillan Luzuriaga Technologies Miriam Wimmer Implementing consortium CESO Development Consultants/FIIAPP/INA/CEPS Secretary of Telecommunications André Borges CONTACTS Director of Telecommunications Services and Universalization MINISTRY OF SCIENCE, TECHNOLOGY, INNOVATIONS AND COMMUNICATIONS Laerte Davi Cleto (MCTIC) Author Secretariat of Computing Policies Senior External Expert + 55 61 2033.7951 / 8403 Vincent Bonneau [email protected] Secretariat of Telecommunications MINISTRY OF PLANNING, DEVELOPMENT AND MANAGEMENT + 55 61 2027.6582 / 6642 [email protected] Ministry Dyogo Oliveira PROJECT COORDINATION UNIT EU-BRAZIL SECTOR DIALOGUES SUPPORT FACILITY Secretary of Management Gleisson Cardoso Rubin Secretariat of Public Management Ministry of Planning, Development and Management Project National Director Telephone: + 55 61 2020.4645/4168/4785 Marcelo Mendes Barbosa [email protected] www.sectordialogues.org 2 3 OTT Regulation OTT © European Union, 2016 Regulation Responsibility for the information and views set out in this report lies entirely with the authors. 4 5 OTT Regulation SUMÁRIO 1. INTRODUCTION ON OTT CONCEPTS AND MARKETS .......................................14 2. OTHER KEY CONCEPTS .......................................................................................101 1.1. Definitions of OTT ...........................................................................................14 2.1. Level Playing field ...........................................................................................101 1.1.1. Scope issues .........................................................................................14 2.1.1. OTT vs telcos .........................................................................................101 1.1.2. European framework not addressing directly OTT ................................16 2.1.2. Europe vs International ..........................................................................105 1.1.3. The BEREC approach ...........................................................................18 2.2. The Digital Single Market initiative ..................................................................105 1.2. Types of services offered ................................................................................21 3. TAXATION................................................................................................................112 1.2.1. Search ...................................................................................................22 1.2.2. Social media ..........................................................................................26 3.1. Key stakes: Multinational and major companies “avoiding” full payment 1.2.3. Mobile applications ...............................................................................30 of various taxation schemes ...........................................................................112 1.2.4. Communication services .......................................................................34 3.1.1 “Double Irish and Dutch sandwich” system to shift value overseas .....113 1.2.5. E-commerce ..........................................................................................36 3.1.2. The Luxembourg tax regime, revealed through LuxLeaks ....................114 1.2.6. Cloud computing ...................................................................................39 3.1.3. VAT and other discrepancies also cause for concern ...........................115 1.2.7. Video......................................................................................................44 3.2. Reactions to tax avoidance schemes .............................................................118 1.2.8. Collaborative economy ..........................................................................53 3.2.1. At the European level ............................................................................118 1.3. Business models .............................................................................................55 3.2.2. France....................................................................................................122 1.3.1. Revenue models ....................................................................................55 3.2.3. UK ..........................................................................................................126 1.3.2. Two-sided markets and Platforms .........................................................63 3.2.4. Germany ................................................................................................127 1.4. Value Chain .....................................................................................................69 3.3. Appendix ........................................................................................................128 1.4.1. Trends in the ecosystem ........................................................................70 3.3.1. The six key measures proposed by the European Commission 1.4.2. Typical value chain for delivery of Internet services..............................72 to fight tax avoidance ............................................................................128 1.4.3. Typical value chain for distribution of mobile applications ....................73 3.3.2. Action Plan on VAT– Towards a single EU VAT area ..............................130 1.4.4. Focus on relationships between telcos and OTT ..................................77 4. PRIVACY ..................................................................................................................138 1.4.5. Competitive Landscape ........................................................................87 4.1. Key stakes: personal data now available in unprecedented levels, 1.5. Economic impacts ..........................................................................................89 but with it comes various privacy risks ...........................................................138 1.5.1. Impacts in terms of traffic ......................................................................89 4.1.1. A contrasting approach between EU and US on privacy .....................139 1.5.2. Impacts in terms of markets ..................................................................91 1.5.3. Overall economic impacts .....................................................................95 4.2. EU and US background ..................................................................................140 1.5.4. Large platforms’ impact on the economy ..............................................96 4.2.1. Reform of EU data protection rules .......................................................140 1.5.5. A focus on the Mobile App Economy ....................................................98 4.2.2. The US approach to data protection .....................................................143 10 11 OTT Regulation 4.2.3. Privacy Shield (ex-Safe Harbour) ..........................................................145 7. RECOMMENDATIONS ............................................................................................212 4.2.4. The privacy paradox ..............................................................................147 7.1 Level playing field ...........................................................................................214 4.3. Country focus ..................................................................................................148 7.2. Net Neutrality ..................................................................................................215 4.3.1. France....................................................................................................148 4.3.2. UK ..........................................................................................................152 7.3. Taxation ...........................................................................................................216 4.3.3. Germany ................................................................................................154 7.4. Digital Platforms ..............................................................................................217 4.4. Appendix: EU-US Privacy Shield ....................................................................157 7.5. Privacy ............................................................................................................218 5. PLATFORMS ...........................................................................................................159 5.1. Key stakes: platforms are an integral part of the digital economy, but care must be taken to avoid abuse of platform dominance ...................................159 5.2. Local focus .....................................................................................................162 5.2.1. The European Approach .......................................................................162 5.2.2. France....................................................................................................170
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