Authorized Authorized

GLOBAL COOPERATION
297
Figure 6.2 The multistakeholder model
of internet governance enjoys greater
support than other options
Percentage of respondents who said they would trust the
governance options below completely or somewhat
Percent
60
50
40
30
20
10
0
A multistakeholder
body
Engineers and
technical community
United Nations
Technology companies
My government
Toward a global digital
market
United States
Source: CIGI and Ipsos 2014. Data at http://bit.do/WDR2016-Fig6_2.
One of the advantages of the internet is its ability
to deliver digital goods to a global market, unconstrained
by national infrastructure—enabling developing
country citizens to enjoy the same products as
their peers in the rest of the world. Digital transactions
will continue to increase as the number of goods
and services offered online increases. For example,
with the introduction of online music stores in many
developed countries in 2004, digital music started to
gain a share of global music sales—from 2 percent in
2004 to 46 percent in 2014. 17 Access to a global market
can be particularly advantageous to firms in small,
island, and landlocked countries, as well as for countries
with small populations, where the size of the
local market is often constraining growth.
Digital trade is potentially global in scope, but barriers
to digital integration prevent firms from reaching
appropriate scale (box 6.2). Issues such as trade
logistics and infrastructure, online payment systems,
and trade barriers can be handled by national governments
(chapter 5). But cross-border issues affecting
digital trade need international coordination. Indeed,
the internet’s ability to seamlessly deliver digital
goods and services around the world is considerably
impeded by various regulations that could be streamlined
through greater international cooperation. The
two main cross-border issues are barriers to data flows
and uncoordinated intellectual property rights regime.
Removing barriers to cross-border
data flow
The internet has revolutionized the way data are collected
and shared. This in turn has increased economic
efficiency and productivity, improving welfare and
Box 6.2 European Union: A fragmented market for digital products
Despite being a single market with a free flow of goods,
services, and people for many decades, the European Union
(EU) still functions like a fragmented market for digital
goods and services. Consumers and firms face difficulties
in engaging in the digital economy.
Consumers in the EU prefer to shop from online stores
that are within their national borders. While 44 percent
of consumers made an online purchase from a domestic
business in 2014, only 15 percent did so from a business in
another EU country. a The consumers may have concerns
about payment security, product quality, or the reliability
of the sellers located in another country (figure B6.2.1).
Moreover, consumers in the EU face different prices for the
same online goods and services because of the practice
of geoblocking, in which services and prices are limited
to a geographic location. Consumers are directed to their
local websites, where they face different prices from online
retailers based on their location. Content like video is also
restricted within a single geographic location.
Firms within the EU also face many difficulties in selling
their goods and services online in other EU markets. Firms
engaging in e-commerce face high and uneven crossborder
delivery charges, which are passed on to consumers.
For example, Copenhagen, Denmark, and Malmo, Sweden,
are separated only by an 8-kilometer bridge, but a package
sent from Copenhagen to Malmo costs €27 whereas a package
sent from Malmo to Copenhagen costs €42. b Moreover,
firms face large costs to adapt to various national laws, and
believe that the costs outweigh the benefits of setting up a
website (figure B6.2.2).
(Box continues next page)