The European Commission proposed today policy and legal solutions to unleash EU's data economy, as part of its Digital Single Market strategy presented in May 2015.
The Commission is addressing this issue because the EU is currently not making the most of its data potential. To change that, it is necessary to address unjustified restrictions to the free movement of data across borders as well as several legal uncertainties. The Communication presented today outlines policy and legal solutions to unleash Europe's data economy. The Commission also launched two public consultations and a debate with Member States and stakeholders to define the next steps.
Andrus Ansip, Vice-President for the Digital Single Market, said: "Data should be able to flow freely between locations, across borders and within a single data space. In Europe, data flow and data access are often held up by localisation rules or other technical and legal barriers. If we want our data economy to produce growth and jobs, data needs to be used. But to be used, it also needs to be available and analysed. We need a coordinated and pan-European approach to make the most of data opportunities, building on strong EU rules to protect personal data and privacy."
Elżbieta Bieńkowska, Commissioner in charge of Internal Market, Industry, Entrepreneurship and SMEs, said: "Data is the fuel of the new economy. To ensure that Europe is successful in the new era of the industrial economy, we need a solid and predictable framework for data flow within the Single Market. Clear data access, security and liability rules are key for European companies, SMEs and start-ups to fully grasp the growth potential of the Internet of Things. Instead of building digital borders we should focus on building a European data economy that is fully integrated to and competitive within the global data economy."
In the Communication, the Commission also proposed to interested Member States to get involved in cross-border projects exploring emerging data issues in a real life situation. Some projects on cooperative connected and automated mobility (CAD) that allow vehicles to connect with each other and with roadside infrastructure are already underway in some Member States. The Commission wants to build on these projects and test out the regulatory implications of access to and liability of data.
The EU data economy was estimated at €272 billion in 2015 (annual growth of 5.6%) and could employ 7.4 million people by 2020. Data can be used to improve almost every aspect of daily life, from business analysis to weather forecasting, from new era in medicine enabling personalised care, to safer roads and fewer traffic jams. This is why the Commission's Communication emphasises the role of free flow of data in the EU.
In addition, studies point to numerous legal or administrative restrictions, mainly in the form requirements of national data localisation that constrain the entire EU data market. Removing these restrictions could generate up to €8 billion in GDP a year (study).
All these initiatives are based on strong rules to protect personal data (the General Data Protection regulation adopted last year) and to ensure the confidentiality of electronic communications (see today's proposal on ePrivacy), since trust is the foundation on which the data economy must be built.
The General Data Protection regulation (GDPR) fully regulates the processing of personal data in the EU, including machine generated or industrial data that identifies or makes identifiable a natural person. By setting uniform high standards of data protection, it ensures the free flow of personal data in the EU. However, the GDPR does not cover non-personal data when they are industrial or machine generated, or obstacles to the movement of personal data based on other reasons than the protection of personal data, e.g. under taxation or accounting laws.
In order to make the most of data for the European economy, the Commission will:
- Engage in structured dialogues with Member States and stakeholders to discuss the proportionality of data localisation restrictions. The goal is also to collect further evidence on the nature of these restrictions and their impact on businesses, especially SMEs and startups, and public sector organisations.
- Launch, where needed and appropriate, enforcement actions and, if necessary, take further initiatives to address unjustified or disproportionate data location restrictions.
The Commission has also looked at legal uncertainties created by emerging issues in the data economy and seeks views on possible policy and legal responses regarding:
- Data access and transfer. Wide use of non-personal machine-generated data can lead to great innovations, startups and new business models born in the EU.
- Liability related to data-based products and services. The current EU liability rules are not adapted to today's digital, data-driven products and services.
- Data portability. Portability of non-personal data is currently complicated, for example, when a business wants to move large amounts of company data from one cloud service provider to another.
Today's initiatives will contribute to removing remaining obstacles within the Single Market, as called by the European Council in December 2016 (conclusions). With the backing of the European Parliament and Member States, the Digital Single Market should be completed as soon as possible. Today's initiatives will help shaping the future policy agenda on the European data economy. The consultation on building the European data economy will run until 26 April 2017 and feed into the Commission's possible future initiative on the European Data Economy later in 2017. The consultation on evaluating Directive on liability for defective products will run until 26 April 2017. They target producers, collectors, and potential and actual users of non-personal data, especially raw machine or sensor-generated data. This includes businesses of all sizes, manufacturers and users of connected devices, operators and users of online platforms, data brokers, public authorities, non-governmental organisations, research organisations and consumers.
For More Information
Fact sheet: Building the European Data Economy - Frequently Asked Questions