30 Nov 2016

Joint Industry Statement – Free Flow of Data is at the essence of a true European Digital Single Market

Joint Industry Statement – Free Flow of Data is at the essence of a true European Digital Single Market

Digitalisation can be at the heart of Europe

The undersigned organisations strongly believe the EU should complete the Digital Single Market (DSM) in a timely manner by ensuring the free movement of data so as to take full advantage of the digital transformation and compete effectively worldwide. The data economy is paving the way for the ongoing digital transformation. Its evolution can significantly improve lives, create growth and jobs, and benefit society overall.

Data has the potential to be worth EUR 566 billion by 2020 (European Commission). If harnessed appropriately, this economic lever will fuel growth in Europe. Europe needs to adopt an innovation-friendly approach to data to empower the digitalisation process and offer robust solutions for data use. Policy makers should carefully assess if and where action is needed. The European legislative framework for data must allow companies to compete globally, foster the creation of new business models and ensure a level playing field, with legal certainty and stability.

Companies in Europe are already facing various data localisation restrictions (see examples at annex), which may be likely to increase in the future in absence of EU action. In addition, there are many other indirect, non-legislative barriers that stifle free movement of data further (for example localisation requirements in public procurement). The European Business community believes that the EU should put forward legislation to remove and prevent unjustified restrictions to the free flow of data, as announced in the 2015 DSM Strategy. The ability to transfer data across borders is crucial for companies, both within the Single Market and beyond. Companies need to be able to efficiently transfer data across borders in order to respond to customers’ need, deliver goods and services, process payments or provide technical support.

Imposing direct or indirect restrictions on the location of data limiting the possibility of data flowing across borders without objective and justified reasons would undermine the ability of companies to define their business models and stifle Europe’s competitiveness and growth.

We strongly recommend avoiding any forced data localisation requirements on a national, European or global scale. These requirements in most cases find no valid justification, as under a true DSM there is little justification to deem data safer or better accessible by default if stored in a specific Member State, as the physical location where the data is stored does not seem to have much relevance anymore.

Any forced data localisation requirements should be subject to EU scrutiny and should only be kept if proportionate and in line with EU legislation and single market principles. The EU should introduce a legal instrument that removes existing national data localisation requirements and prevents the creation of new ones.

As regards data ownership, access and liability, we believe that these issues are – for the time being – adequately addressed by existing legislation. Current rules and practices allow adapting to the needs of the parties and provide the appropriate setting to share data based on contractual terms, allowing innovation. The current framework is fit to address liability issues in the field of IoT and no new liability rules for data-related services and products are needed.

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