Currently, there is a strong US domination in the four most important market segments of e-commerce: Social Networks, Search Engines, Retail and Payment Services. Only in the Payment Services segment solutions from European companies can be found as well. Possible reasons for that are the combination of a more liberal and more harmonised legal framework together with a large and homogenous market in the home country. On the contrary, the European legal framework has several implications for innovative business models as outlined before.
One particular problem in this regard is the enforcement of European legal requirements. Many requirements can be enforced against European competitors, but not against US-based competitors, leading to an unequal enforcement of European law and therefore to unfair competition.
A pre-condition for effective enforcement can be seen in significant technical expertise within regulatory bodies. In practice, experiences show that this is not yet the case throughout the whole European Union. Increasing technical knowledge in regulatory bodies of all kinds, in particular in data protection authorities, therefore can be seen as a key factor for improving enforcement of the given legal framework. The primary obstacle therefore is not the legal framework as such, but rather the inhomogeneous application throughout the EU.
Another key factor for losing competitiveness against non-EU service providers is the lack of a legal framework allowing foreseeable outcomes to which competitors can feasibly adapt in order to ensure legal compliance. Regarding the existing level of compliance there are situations in which authorities in different member states decided inhomogeneously in similar cases. In addition to that, there might be contradictions by different authorities in the same country. For instance, finance regulation would tend to require clear documentation of financial transaction and, consequently, the storing of vast amounts of personal data, whereas data protection authorities would require data processing to be changed in a manner that would not allow meeting the requirements previously set up by finance regulation. This situation significantly hampers the development of the market and creates obstacles and losses.