How do you regulate for tomorrow’s world?

tomorrows world

Imagine it’s 1992 and you’re the European policy wonk, given the task of penning a directive on protecting consumers’ holidays.  It’s unlikely there was an easier job in Brussels back then.

For a start, people had been going on holiday in fundamentally the same way for about 30 years and deciding who should take responsibility for providing the service was pretty incontrovertible stuff when everyone knew who was who.  Identifying the tour operator?  No problem.  The guy who owns the aeroplane.  Proving you’re a travel agent? Have you got a shop on the high street?  Defining a package holiday?  Easy!  A charter flight and 7 or 14 nights in Spain.

As for reaching an agreement with the neighbours, well that can’t have been too hard either.  The EU was a cosy camp of just 12 Member States bound together by an Exchange Rate Mechanism and a fondness for hair gel and fancy loafers.

So you knock out a law in a couple of days and before you know it, you’re kicking back to “Joe Le Taxi” and an Oranjeboom or two.

The honeymoon didn’t last long though.  Within 2 years, Tim Berners-Lee had turned up to invent the internet and disrupt pretty much everything.  Low cost airlines; bed banks; aggregators; intermediaries; OTAs: new business models flourished creating unprecedented choice and a myriad of new ways to consume travel.

As for the poor old Package Travel Directive, it was totally ill-equipped to cope with the modernising world.  Government regulators attempted to shoe-horn new models into outmoded definitions, spawning court cases and conflict.  It was effectively rendered obsolete somewhere around the middle of the noughties and has been limping on ever since,  until finally after 23 long years, political agreement between the European Parliament and the Council of Ministers was reached last week on a new directive.

There is a certain sense of futility about this whole exercise, though.  Reforming the 1992 Package Travel Directive has thus far taken 6 years and it will be further 2 years by the time the our parliament turns it into UK Law. To put that into perspective, iPads, Smart Phones, social media and voucher companies were virtually non-existent 8 years ago, not to mention AirBnB and their sharing economy cohorts. Just like in 1992, how can rule makers ever really hope to keep pace with the markets they regulate when they work to such different timeframes.

There have been many speculative pieces written in recent weeks about the key changes to the rules. The place of company establishment will drive the legal jurisdiction, “click-throughs” will be classed as packages, Linked Travel Arrangements will come into scope, business travel will drop out. Whilst these concepts seem nailed down, we’re still a long way off knowing how they will work in practice, with at least 1 more consultation before they are implemented in the UK.

There are many unanswered questions about the new PTD, but top of the list is how long does it have before the next innovator throws a curve-ball through it?

This article first appeared in TTG on 12 June 2015

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