regulation required Cost of Delay on Data Protection

Justice and home affairs ministers from Europe are struggling to finalize the E.U. regulation on data protection. After lengthy delays, they need to take action as the longer they delay, the greater the cost to European IT businesses.
Protecting personal data. Source DPA


When the European Commission presented its proposals on how to reform the E.U.’s data protection laws in 2012, big data businesses from the United States were already lobbying against it as hard as they could.

While Commission officials were still drafting the regulations, well-paid lawyers and consultants were shaping these rules.

Their counterparts from Europe – perhaps more accurately called competitors – were in no position to do the same.

Most mid-size companies are barely able to keep track of the E.U. legislative process.

It was only after the European Parliament debated the proposals and negotiated 4,000 amendments that European companies took note of the planned data protection law, the single regulation planned for the whole of the E.U.

By then, the debate had already been framed by the U.S. Chamber of Commerce and countless associations and forums with fancy names, influenced by Silicon Valley lobbyists.

This lead to the spread of fears throughout Europe like “The E.U.'s data protection plans endanger thousands of jobs," “the rules mean more red tape for business,” and “E.U. regulation plans will kill off innovation, big data, research and growth.”

Every one was affected from CEOs to journalists, lawyers to political leaders and their staff.

In March last year, the European Parliament confirmed its aim to create a single legal framework matching the same level of the current data protection directive.

But ever since, pressure has grown to abandon a win-win solution for consumers and businesses. The single digital market is not enough, apparently. Lobbyists want to end the European concept of data protection at all costs.

MEPs and E.U. ministers are already starting to reduce the scope of the regulation, acceding to big data businesses' demands and it's not clear yet where this will lead.

Meanwhile, companies in Europe have a different message.

If the E.U. doesn't establish a credible, enforceable data protection standard, European IT businesses will face huge losses.

After all, one market with 28 different standards gives U.S. companies a huge advantage. They can choose the jurisdiction that works best for them while most small and med-sized competitors from Europe are stuck with the rules wherever they're based.

In fact, the current legal framework discriminates against E.U. companies. They can't behave like monopolists, the way some companies in Silicon Valley do, and tell consumers to "take it or leave it,” they have to build a level of trust with buyers.

A single high standard would level the playing field and would be the best thing political leaders could do for these companies.

But E.U. ministers keep talking about the importance of fostering European IT business but keep on postponing the adoption of such a framework.

If those leaders would be honest, they would see that the European Parliament’s position on an EU data protection regulation is a workable and reasonable compromise. It would provide a huge benefit for E.U. companies rather than changing current provisions for processing personal data.

For most companies – and small and medium sized firms in particular – there would be no big change.

But a level playing field on the European market would remove their disadvantage vis-à-vis companies who can just choose the lowest de-facto standard of all the 28 interpretations of what is data protection means within the E.U.

Instead, they would have to comply with higher standards in their member state and that would be a real advantage to the common market and worldwide.

All those using the loopholes in the current legal framework would have to respect the same rules companies in the E.U. have followed for years.

The main thing is that rather than adjusting to 28 different rules and enforcement cultures to sell products and services to one single market they would just need to respect one single standard.

This would be one of the biggest moves to cut red tape in the history of business and a benefit not only for Europeans but all companies and consumers coming to the European market.

Come on, ministers, join the European Parliament in creating a Digital New Deal for Europe!