Hanover’s recent TechFast roundtable on the role of online platforms brought together stakeholders and key policy makers to exchange views on this topic. Here are the highlights.
The overarching theme of the EU’s Digital Single Market initiative is how to make Europe more digitally innovative and competitive globally.
It is one of the favourite topics of discussion in Brussels, and since the launch of a consultation in September, the conversation about “online platforms” has taken centre stage.
Hanover’s recent TechFast debate on the role of online platforms brought together stakeholders and key policy makers to exchange views on this topic.
The discussion kicked-off with the question of how to define an online platform. The definition of platform in the consultation is very broad. It’s a catch-all one, potentially including everything from search engines such as Google, eCommerce marketplaces like Amazon, social networks à la Facebook and collaborative sharing economies, with Uber a recent hot topic.
It emerged that the European Commission and Parliament are themselves trying to get a grasp on these many types of platforms, with the goal of finding the appropriate definition.
The intentions and political driving forces are equally numerous: more transparency for consumers, preventing anti-competitive market dominance, stimulating growth and jobs, and preserving innovation.
It emerged from the discussion that the role of platforms as a market for data is a key focus point, as it raises questions on what information is gathered, how it is used, and if it can be transferred when switching platforms.
Concerns, such as trust and security also ring loudly in light of recent terrorist attacks and cybercrime case
Another underlying whisper, if not outright public statement, is the fear that Europe is lagging behind the USA and, soon, China. Participants agreed that the EU has many success stories in the eCommerce and video game sectors with the potential to compete globally.
Creating the right conditions for these unicorns to rise and for start-ups to scale up should be one of the ultimate outcomes of any policy intervention. Europe cannot lose this momentum and policy makers should duly take it into consideration when thinking of the right approach to platforms.
On top of all of this, the tech sector innovates fast and can be difficult to predict. Years of drafting and implementing regulation or legislative rules risk stifling this growth and innovation and compliance costs would hit newcomers and start-ups the hardest.
Meanwhile, ex-post enforcement, such as an antitrust investigation, can be more targeted, acting only when problems arise, but such cases have proven to be notoriously complex and sluggish to resolve.
With regulatory solutions likely to take quite some time, firms, young and old, will continue to innovate and develop ways to bring content to the market.
Consumers often make happy use of the convenience of platforms and they have proven to be a boon for many businesses, start-ups and citizens, enabling a rapid growth of online trading, sharing and interaction across borders.
The challenge ahead for policy makers therefore is to strike the right balance of all interests at stake. Neither a fragmented nor an over-regulated EU market will benefit anyone, as MEP Dita Charanzova made clear in the interview given to The Digital Post at the TechFast session.
A word of advice, follow the motto of Commission President Jean-Claude Juncker: “No time for business as usual”.
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photo credit: erik forsberg
The new Safe Harbour ruling has shown the difficulties in adapting existing legal rules to the globalised, digital era. Online privacy legislation is clashing with modern business models, while European regulators are struggling to balance citizen rights with the desire to boost the competitiveness of the tech industry.
If someone were asked to guess which issue has generated the fiercest debate in Brussels in the recent months, the European Court of Justice (ECJ) Safe Harbour ruling should be the answer. Brussels has not stopped talking about it since the 6th October. Safe Harbour, which echoes a secure environment, no longer fits with the legal uncertainty and insecurity that the ruling has generated.
The ECJ ruled that the transatlantic Safe Harbour agreement, which allows American companies to use a single standard for consumer privacy and data transfer of private information between the EU and the US, is invalid.
With its ruling the ECJ has considerably challenged, if not disrupted this framework put in place to ease Trans-Atlantic information sharing, deeming it inadequate, especially in light of the surveillance allegations and scandals by USA intelligence services (including the NSA).
The upshot of the ruling is that there are now only limited pan-EU rules on data flow from Europe to the USA.
The ECJ has caused quite a stir in the tech world with its recent judgment. Tech companies, big and small, are scrambling to see what data they process and where it is transferred. Most multinationals are now legally obliged to suspend any transfer of its customers’ data to the USA and move their data storage and operations to an EU subsidiary.
Has anyone also quantified the economic implications of a real stop of data transfer between the EU and the USA? A power-generated black out is the best example I can think of.
The European Commission has therefore been put in a tough position. While it has to support the ruling by the European Court of Justice and guarantee citizens’ privacy, it had evoked the ire of the ICT industry. Trade and business associations are lobbying for a pragmatic solution namely via a transition period that would legalise the current Trans-Atlantic data flows.
The Commission has also promised guidelines for companies and data processors by early November and is working together with the national authorities to prevent fragmentation. But industry fears that this will not prevent headaches, stress and costs. A German data protection authority, for instance, has already warned it would fine non-compliant companies severely.
Meanwhile, Europe and the USA have also been negotiating a renewed Safe Harbour agreement. The ruling comes in the midst of these talks and will be an extra source of pressure. However, little can be done to accommodate the ruling unless America agrees to suspend its surveillance mechanisms on EU citizen data, which would be a very big ask.
In summary, the new Safe Harbour ruling has shown the difficulties in adapting existing legal rules to the globalised, digital era. Online privacy legislation is clashing with modern business models, while European regulators try to balance citizen rights with the desire to boost its tech industry and remain competitive. It’s a fierce storm with no lighthouse in sight.