There is still some way to go, but the Better Regulation Agenda, led by European Commission First Vice-President Frans Timmermans, is a great opportunity for Europe to lead the way in smart regulation, writes Oliver Gray.
Oliver Gray is director general of the European Advertising Standards Alliance (EASA), which has championed effective advertising self-regulation for more than 20 years. He is a member of the steering group of the EU Commission’s Community of Practice on self and co-regulation.
Last week, the European Commission adopted an ambitious Better Regulation Agenda with the goal of making European legislation better – for European citizens, and for business. The Agenda is intended as a key tool to deliver President Juncker’s number one priority: more jobs, more growth and more investment.
Making smarter laws across Europe and cutting red tape will certainly benefit businesses, especially for those operating across the digital single market. And in this context, it is the right choice of the Commission to also commit to consider using well-designed non-regulatory means wherever appropriate, instead of resorting to hard law.
Well-designed and enforced self-regulatory codes of practice which complement a sensible legislative framework can deliver better results, and faster, than the use of pure legislation. Self-regulation ensures shared responsibility of all stakeholders and rules that are not overly burdensome for industry. Done well, self-regulation frees up legislative circuits, removes obstacles to the single market, increases consumer trust, allows for great flexibility, and quick application, whilst respecting national needs and the legal and cultural context.
Up to now, there have been some detailed discussions about the use of such instruments related to advertising, food, alcohol, cosmetics and digital areas such as online behavioural advertising. I believe we are at an important turning point for the appreciation of effective self-regulatory mechanisms in the EU, but also beyond. Before the adoption of the Better Regulation Agenda, the OECD and APEC have recognised the value self-regulation can bring to consumers and business respectively. The European Economic and Social Committee has also issued recently a positive opinion, which recommends that self- and co-regulation should be viewed as important instruments for complementing or supplementing hard law.
Effective self-regulatory mechanisms that can quickly respond to changing technologies and consumer needs for transparency, choice and control are in a growing digital single market more important than ever.
Industry of course needs to deliver and strengthen the self-regulatory frameworks they own to ensure transparency, accountability, and effective compliance in order to provide an added value to consumers. In this respect, the setting up of the Commission’s Community of Practice on self and co-regulation has been extremely useful. The platform encourages the sharing of best practice regarding effective self- and co-regulation. Important lessons have come from looking at the actions of different sectors such as cosmetics, market research, retailing, forestry and advertising and it has led to the setting up of principles for better self- and co-regulation, which are now a key reference point in the Better Regulation Package.
It remains to be seen if and how quickly the Better Regulation Agenda will be properly implemented to deliver the desired results. Not only does the Commission need to adhere to its principles, but also the co-legislators, the European Parliament, and the Council. The Interinstitutional Agreement needs to be renewed, reflecting the better regulation principles and updating the current definitions of self- and co-regulation, which at present do not reflect today’s market reality.
The winds of change are blowing, and this is an important moment for all. Bold decisions related to regulatory trust will need to be taken, including the proper evaluation at impact assessment stage of all options available. The official appreciation of effective self-and co-regulation will need to be followed by a concerted cultural change within and across the institutions. Industry sectors need to demonstrate that self and co-regulatory initiatives are fit for purpose, including strong elements of transparency, effective enforcement and accountability. They will need to reach out and listen to other stakeholders, such as consumer organisations and NGOs and build better relationships of trust with these.
There is still some way to go, but the Better Regulation Agenda is a great opportunity for Europe to lead the way in smart regulation.
- EASA report (May 2015) : Advertising Self-Regulation Is Better Regulation