• Telecoms

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    3G was modernisation, 4G was and is digitalisation, 5G is industrialisation

    3G changed the telecom markets and paved the way for new services. 4G changed the logic of telecom into the information society. 5G will mean a change in both the structures and the nature of our industries and economies. The introduction of 3G was a hug [read more]
    byGunnar Hökmark | 17/Feb/20165 min read
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    3G changed the telecom markets and paved the way for new services. 4G changed the logic of telecom into the information society. 5G will mean a change in both the structures and the nature of our industries and economies.

    The introduction of 3G was a huge modernisation. It was a revolution for mobile telecom and gave Europe the lead. Mobile telephony was suddenly a popular phenomenon, creating new opportunities and new accessibility. Today there are more mobile phone subscriptions in the world than human beings. It has created universal connectivity. Europe was in the lead of this development but lost it.

    4G is digitalisation. Old services in new structures and new services that we couldn’t foresee. New devices such as tablets and smartphones are a function of these new information technologies and the Internet is becoming a base for most sectors and industries of our societies.

    This development is crucial for the competitiveness of our economies. And Europe is lagging behind in the deployment of 4G. Other parts of the world – such as the US, Japan, South Korea – are as much as four times more rapid in developing the use of mobile broadband.

    5G will be crucial because it is the full industrialisation. It will be transformational for everything from the transport sector to the car industry as well as health industry, entertainment and media and it will change the structures of production as well as the criteria for productivity and marketing.

    In order to take the lead in the digital economy we need to do a lot.

    What we today call cyber security must be the security and defence of our economies, production and supply chains as well as for the credibility of banking and trade and for the protection of our private lives.

    Data protection and cyber security must go hand in hand with the development of new services and be based upon our own actions.

    Regulations and legislation must be technology neutral. The European Union must adapt its legislation regarding IPR, services, copyrights, VAT and sales legislation to the 21st century rather than keeping those of the last. All this is complicated but it must be done.

    It will be much easier if we decide to take a decisive step and take the lead in launching and deploying the nets of 5G. Europe should be in the lead, in a harmonised action where the leading Member states must be the template and where the aim must be to make the European Union the leading 5G economy of the world.

    It will require much more competition between different actors, European markets and trans-European nets, by coordination, harmonisation or by market development. It will require the combination of economy of scale integrated in competition over the borders.

    The release and the coordination of the 700MHz band – now finally proposed by Commission – will be a crucial and formative first step in order to live up to these challenges.

    When we will have the lead in 5G and the best capacities, the momentum and magnitude of change will help us with the reforms needed to take the full benefit of the digital industrialisations that we now are up to.

    To take the lead on 5G is one of the few single issues where we can take explicit decisions, not only define goals and targets, that will bring back growth, leadership, innovations and competitiveness for the European economy.

    The Commission must be tough and forward looking and so must the European Parliament, in order to convince hesitant Member states that Europe means more in the digital era than ever.

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  • Data Economy

    DP-4

    Data protection, too many obligations

    The legislation agreed in mid-December by Parliament and Council negotiators marks a crucial step forward in getting away with a calamitous patchwork of national laws on data protection. However, it contains a number of inconsistencies that could negative [read more]
    byThe Digital Post | 25/Jan/20164 min read
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    The legislation agreed in mid-December by Parliament and Council negotiators marks a crucial step forward in getting away with a calamitous patchwork of national laws on data protection. However, it contains a number of inconsistencies that could negatively affect Europe’s digital ambitions.

    It took nearly 4 years of bitter negotiations for the EU to strike an agreement on a sweeping overhaul of its data protection rules. But it was worth it. The legislation agreed in mid-December by Parliament and Council negotiators marks a crucial step forward in getting away with Europe’s calamitous patchwork of national laws on data protection.

    The previous EU rules dated back to 1995 and their varying interpretations by Member States have contributed to create significant regulatory uncertainty while hindering innovation in critical sectors of the economy.

    However, the new General Data Protection Regulation (GDPR) is far from perfect. It still presents multiple critical aspects. For instance, it fails to create a level playing field for telecom operators.

    Following its introduction, the electronic communications sector will be forced to abide by a twofold regulation, complying with both the new data protection legislation and the ePrivacy Directive.

    If Europe is serious about supporting growth and innovation in its digital markets, this asymmetry should be addressed as soon as possible. Otherwise it will place yet another burden on a sector which has been hit hard in recent years by a slow economic recovery while being under pressure to invest more in digital networks in order to meet the EU broadband targets.

    As many know, the on-going Internet evolution has been providing breeding grounds for several new telecom-like services (including OTT services) to grow.

    The point is that, unlike traditional telecom providers, such services are not necessarily bound by the terms of the ePrivacy Directive, although they are functionally equivalent to one another.

    As a consequence, different rules applying to equivalent services inevitably create unfair competition between telecom operators as well as legal uncertainty and general confusion among consumers.

    In order for consumers to benefit from a consistent regulation, regardless of the service provider in question, a prompt revision of the ePrivacy Directive is thus required.

    But the negative implications of the new regulation on data protection could be larger, stretching far beyond the telecoms sector.

    DigitalEurope, the main association representing the digital technology industry in Europe, believes that the legislation fails to strike the proper balance between protecting citizens’ fundamental rights to privacy and the ability for businesses in Europe to become more competitive.

    The text agreed upon between the European Commission, European Parliament and the Council of Ministers contains a number of stringent obligations that could be very costly for IT businesses, undermining their ability to invest, innovate and create jobs.

    European businesses, traditionally less equipped to meet these obligations, could be hit hard. And, of course, this is in stark contrast with Europe’s ambitions to create a generation of home-grown global leaders in the tech sector.

    Another matter of concern is the so-called is the compromise reached on the so-called “one-stop-shop”, according to which tech companies operating in different countries will deal with only one data-protection authority, namely where their European headquarter is based.

    As Member states managed to weaken this principle, as recently reported by Reuters, some obervers believe that this will create more legal confusion and litiges (for instance, to determine what is the concerned national authority). Again: the bill for the companies could be very expensive.

    Following the political agreement reached in trilogue, the final text of the data protection regulation will be formally adopted by the European Parliament and Council in a few weeks. Maybe there is still room to fix its inconsistencies.

     

    Photo credit: Martin Fisch
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  • A conversation with

    german cloud

    Merkel’s “bundescloud” is a dangerous idea with little benefits in terms of privacy

    Protectionist policies, such as recently adopted German retrictions on public sector cloud use, can ultimately translate into a threat for the open and global structure of the Internet, argues Daniel Castro, Vice President of the Information Technology an [read more]
    byThe Digital Post | 07/Sep/20156 min read
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    Protectionist policies, such as recently adopted German retrictions on public sector cloud use, can ultimately translate into a threat for the open and global structure of the Internet, argues Daniel Castro, Vice President of the Information Technology and Innovation Foundation and Director of the Center for Data Innovation

     

    The Digital Post: Newly adopted German rules for government cloud computing means official data can only be processed in Germany. What is your opinion?

    Daniel Castro: This is an unfortunate development, both for Germany and for others. First, countries like Germany should be an ally in support of free trade, and by enacting these types of non-tariff barriers to trade it gives cover to other countries who want to enact protectionist measures.

    Second, by restricting access to foreign cloud providers, Germany is “cutting off its nose to spite its face.” Germany organizations benefit from having access to the best cloud providers, and many of these are foreign companies. This will raise costs and decrease productivity for affected organizations.

    Third, there is little real benefit in terms of privacy and security to storing data within the country versus abroad. Countries should be working to clarify any distinctions. This is one reason my think tank has called for a “Geneva Convention on the Status of Data” to determine when government agencies can lawfully request access to data.

    Most developed countries should be able to agree to common standards and abide by them. The end goal should be a data free trade zone that extends globally.

     

    The Digital Post: Ever since the Snowden revelations came out, German PM Angela Merkel has been advocating for a separate European communication network/infrastructure. What might be the implications of such project, if it ever is implemented?

    Daniel Castro: United States and Europe are allies on many issues, and it would be counterproductive to build separate infrastructure rather than working together towards a common goal.

    Neither wants the other to spy on them, so they should be able to come to terms to upgrade the infrastructure we already share.

    The greater threat to both U.S. and German interests are from China, so there is an opportunity to put aside past issues and come together to confront a looming issue.

     

    The Digital Post: You often speak about the rise of “data nationalism” across the world. What is this phenomenon about?

    Daniel Castro: Many countries are trying to pass laws and regulations to keep data within their borders, such as by requiring data to be processed locally. One reason countries are doing this is because they believe it will help create jobs, such as construction jobs for data centers.

    But the net impact is very negative, as it raises the cost of doing business for the rest of the economy, and many businesses are increasingly dependent on cloud infrastructure. Moreover, some rules limit cross-border data flows which means a multinational company will run into serious issues as it tries to operate on a global scale.

     

    The Digital Post: Is data nationalism a threat to the current structure and functioning of the Internet? Why?

    Daniel Castro: Yes. The primary benefit of the Internet is that it is a global, open network available to all. Protectionist policies can chip away at this ideal until we are eventually left with a series of disjointed national or regional Internets.

    Policymakers should be very concerned about overreacting to short-term fears about data privacy at the expense of damaging the potential growth of data-driven innovation in the Internet economy.

     

    photo credits: grinwithoutacat
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  • Digital Single Market

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    Oettinger, Google and the Delicate Art of Communicating about Technology

    The EU Commissioner for the Digital Economy is calling net neutrality a "Taliban-like issue," Google has started sending out sarcastic GIFs as on-the-record-statements, and the European parliament is caught in a Mexican standoff about data protection. Co [read more]
    byFrances Robinson | 17/Apr/20156 min read
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    The EU Commissioner for the Digital Economy is calling net neutrality a “Taliban-like issue,” Google has started sending out sarcastic GIFs as on-the-record-statements, and the European parliament is caught in a Mexican standoff about data protection.

    Communication is a delicate art. Both communicating about technology, and using technology to communicate require a touch of finesse. Two months since I left Brussels, I’ve been busy getting used to life in the UK and writing about politics; realizing it was time to get back up to speed on tech and EU, I wandered back over to that section of the internet. Well, all I can say is:

    Gunther Oettinger is calling net neutrality a “Taliban-like issue,” Google has started sending out sarcastic GIFs as on-the-record-statements, and the parliament are going all Mexican standoff about data protection. It was as if I’d walked outside a quiet country pub to take a call on my mobile (LOL I know, so old-fashioned) and walked back in to find a fist-fight in full flow in the bar.

    While the technology portfolio has always been a good one for raising eyebrows — who can forget Neelie Kroes’ “Chanel no. 5 and nothing else” moment, Mr. Oettinger has taken things to another level. Within his portfolio, as well as the Taliban comments — video below — he managed to give conflicting messages about geoblocking.

    Ending geoblocking — so that users can watch content that’s been paid for in one country across the single market — is a very popular idea, especially with border-hopping Brussels bubblers. While Mr. Oettinger’s Tweets show enthusiasm, he said in an interview with FAZ that “we shouldn’t throw the baby out with the bathwater” and should look at the impact on the film industry first.

    That’s within his portfolio. The Commissioner hasn’t held back with his views on areas well outside it, either. He’s also told a German radio station Greece are like “elephants in a China shop.” Well, it takes one to know one. Let’s not forget one of his first moves on becoming commissioner was to take a pop at France’s efforts to sort out its deficit — not really an obviously digital issue.

    He’s trampled on Competition Commissioner Margarethe Vestager’s territory with his views on the Google competition case. Also, it’s old but brilliant: remember that time he said there was no civilization West of Paris? 

    The next thing I thought I’d check up on is the Data Protection legislation, which was meant to be done by summer. The “one-stop shop” idea was a nice, easy-to-communicate policy: you have a query about online privacy, you got to the data protection authority in your country, they talk to the one in the country where the company is based, it gets fixed. Then I read this piece (by the excellent BrusselsGeek) and suddenly it wasn’t so clear. Lead supervisory who with the what now?!?

    As well as the actual reworking of the data protection laws — meant to be completed this year — the European Parliament is flexing its muscles on the Transatlantic Trade and Investment Partnership (TTIP), saying there must be sufficient safeguards for  Europe’s data protection laws. The parliament has to give its agreement to TTIP as a whole, and the civil liberties committee said it would have doubts about doing that without enough protection for EU citizens’ data. So it’ll be interesting to see how that one works out too…

    So much drama! Perhaps the problem is simply words. They can be complicated, ambiguous and do as much to obfuscate as enlighten. We live in the age of Vine, Meerkat and Periscope, where live pictures of anything can be beamed into the ether at will. So Google have fixed this: instead of a boring old on-the-record statement (snooze) made using words (whatever, Grandpa) they decided to respond to a Wall Street Journal story about the Federal Trade Commission with a selection of Buzzfeed-tastic GIFs. 

    I guess that’s how it is now: two months away from covering technology in Brussels and I’m all like

     

    photo credits: Chris Murphy
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  • Data Economy

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    Safe Harbour and mass surveillance in the US: Two separate challenges

    The Safe Harbour agreement is not the appropriate instrument to solve transatlantic tensions over government mass surveillance in the US. The issue should be addressed separately from the US-EU commercial agreement regulating data transfer, whose suspensi [read more]
    byJohn Higgins | 15/Apr/20155 min read
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    The Safe Harbour agreement is not the appropriate instrument to solve transatlantic tensions over government mass surveillance in the US. The issue should be addressed separately from the US-EU commercial agreement regulating data transfer, whose suspension would leave companies in the middle of a jurisdictional conflict they cannot themselves resolve.

    The EU-US Safe Harbour agreement has been the subject of a great deal of interest in recent weeks. At the end of March the head of the Article 29 Working Party, which represents Europe’s data protection authorities, raised the subject in the context of mass surveillance of private data by US security agencies in front of the European Parliament’s Civil Liberties (LIBE) Committee.

    At the same time Justice Commissioner Vera Jourova announced that she intends to conclude a revision of safe harbor with her US counterparts at the end of May. The debate is set to intensify this month as negotiators count down to the self-imposed deadline for revising the 14-year old bilateral agreement.

    Amid all this attention it is worth pointing out a few things about Safe Harbour that have been overlooked in much of the media coverage of the subject, and to explain why it is so important to revise rather than suspend the mechanism.

    The EU-US Safe Harbour agreement facilitates transatlantic transfers of commercial data by European and US companies of all sizes. It is a vital tool for a wide range of industries engaged in the trade in goods and services between the EU and the US.

    The agreement needs to be refreshed and we support the efforts of the European Commission to improve it. We are confident that the reform of Safe Harbour can be achieved through political discussions between the two trading partners.

    While respecting citizens’ right to privacy, we believe an improved Safe Harbour agreement must continue to facilitate data transfers conducted by law-abiding companies.

    Any suspension of Safe Harbour would affect American and European companies alike, and it would be especially burdensome for small and medium size enterprises that use the mechanism for data transfers to the US.

    A suspension would clog up perfectly legitimate, non-controversial, safe flows of non-personal as well as personal data, and it would therefore have significant economic consequences for the US and the EU.

    Similarly, if national data protection authorities were empowered to override EU level agreements such as Safe Harbour, as suggested by some national data protection authorities last month during a hearing at the Court of Justice of the EU (CJEU), this would lead to the splintering of EU rules on international data transfers.

    This in turn would undermine efforts to create a digital single market, and instead create even more fragmentation and legal uncertainty within the EU than there is today. At the heart of the case being heard in court last month is the issue of protection of a citizen’s private data from US security agency surveillance.

    The tech industry in the US has joined forces with privacy groups in opposing efforts to extend bulk surveillance by US security agencies. In Europe we have been criticised by European security agencies for placing too high a priority on citizens’ privacy.

    DIGITALEUROPE shares the concerns of the public and opposes the bulk collection of citizen’s data by state security agencies. However, the Safe Harbour agreement is not the appropriate instrument to solve this problem. Isabelle Falque-Pierrotin, Chair of the Article 29 Working Party said as much at a meeting with the European Parliament‘s LIBE Committee at the end of March.

    Attempting to solve the problem through the revision of Safe Harbour would only deflect attention from the real discussions that need to occur.

    It requires direct government-to-government negotiations on the norms in cyber surveillance and access by authorities. It cannot be resolved in a commercial agreement, which would leave companies in the middle of a jurisdictional conflict they cannot themselves resolve.

    We urge the European Commission, which leads the European negotiating team, to treat this task separately from the revision of rules to allow for the transfer of commercial data from Europe to the US. For more information please read our position paper on the Safe Harbour revision.

     

    photo credits: Linda Tanner
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  • Digital Single Market

    wall2

    Are Member States serious about bringing down Europe’s digital barriers ?

    On paper (almost) everyone in Europe is lining up to praise the benefits of building a digital single market, including national governments. However, of late, member states have shown little appetite for “europeanising” their digital policies. “On [read more]
    byFrancesco Molica | 18/Mar/20157 min read
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    On paper (almost) everyone in Europe is lining up to praise the benefits of building a digital single market, including national governments. However, of late, member states have shown little appetite for “europeanising” their digital policies.

    “One response to the digital revolution must be the Europeanisation of digital policy,” EU digital commissioner Gunther Oettinger proclaimed on Monday 16 March at the CeBIT fair in Hannover. His statement comes not as a surprise. Ever since its early days the European Commission has expressed the intention of going after national silos in the digital market.

    We have also known for some time that such ambitions are being packed into a grand strategy due to be unveiled in May which will comprise a set of reforms in as many areas as copyright, telecommunications, audio-visual services, e-commerce, and so forth.

    On paper (almost) everyone in Europe is lining up to applaud the move, including national governments. Only two weeks ago, a Council meeting of EU Competitiveness Ministers gave its blessing calling various actions aimed at removing unnecessary barriers in order to enable a smooth and quick transition to the digital age.

    Building a European digital market is also one of the 10 key actions outlined in the German government’s digital plan for 2014-2017 that was presented by Angela Markel in person at the opening of CeBIT.

    Yet behind these rosy appearances the reality may be way more challenging for Mr. Oettinger and his fellow commissioners. In fact, of late, member states have shown little appetite for “europeanising” their digital policies. The perfect illustration of this ill-concealed reluctance is the recent agreement reached by the Council on the so-called “Connected Continent” package.

    Originally, the proposed regulation provided for less red tape for operators (for instance by creating a single authorisation to provide services across the EU), more coordination of spectrum use, a higher level of standardization for fixed access products as well as for consumer rules.

    None of these proposals has survived the compromise text endorsed by member states, who removed from the package everything but its provisions on net neutrality and roaming charges.

    At the end of the day, the irony is that the amended text of a proposal named “Telecom Single Market” would do nothing to sort out Europe’s fragmented telecoms market and regulatory imbalances.

    And this is not an isolated case. From the data protection reform to the EU cyber security directive (most) national governments have so far appeared more prone to water down than to embrace the Commission’s drive for more common rules (and, conversely, less national powers) in many key areas of the digital sphere.

    This is a worrying signal taking into consideration that the balance of EU power is tilting back towards governments at the expense of Brussels’ supranational institutions (European Commission and the European Parliament).

    Things may perhaps change. No doubt the European Commission will try its best to build consensus using all its diplomatic leverage to push through digital reforms.

    But given the precedents, as the forthcoming plan on the digital single market will entail several legislations that will touch upon sensitive national interests, not to mention the pressure coming from corporate lobbies, the fundamental question that should be asked is: Are our governments enough serious about building a truly digital single market? Or will they persist in striking “watered-down” and unambitious compromises that would clearly harm Europe’s chances to link its future prosperity to the digital economy?

     

    photo credits: Mark Fosh
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  • Periscope

    DN-SN-82-05975

    Internet Governance, last call for Europe

    This could be a critical year for the governance of the Internet. A plan for transferring the US stewardship of the IANA functions to the global community is expected to come to life by next September. Post-WCIT tensions over the role of countries in mana [read more]
    byThe Digital Post | 09/Feb/20156 min read
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    This could be a critical year for the governance of the Internet. A plan for transferring the US stewardship of the IANA functions to the global community is expected to come to life by next September. Post-WCIT tensions over the role of countries in managing the web may come to a showdown at the WSIS+10 high-level conference to be held next December in New York.

    And while the UN General Assembly is likely to extend the mandate of the IGF, an essential platform for policy dialogue, many other Internet Governance issues such as privacy, cybersecurity and net neutrality will be debated more than ever in countless international venues. If it wants to carry some weight with the Internet “big game”, Europe cannot afford to play with 28 different national teams. It should speak with one voice out of a clear and bold vision.

    Unfortunately, there are few signs that this will occur. In the past years Member states have relegated the issue of Internet Governance to a bunch of working documents and non-binding declarations. They haven’t gone beyond agreeing on a set of vague principles and have widely disregarded the European Commission’s pleas for more common action.

    Such disengagement conceals the will to keep a free hand on the issue, highlighting different national stances. For instance, France and Germany are seemingly inclined to favour a more intergovernamental approach in the future governance of the Internet, whereas other EU countries are far more cautious fearing this could give more (legal) legitimacy to non liberal states’ attempts at censuring the web.

    Nonetheless, a reasonable compromise would not be that difficult. Last year, the European Commission presented an ambitious political document on Internet Governance that could serve as a basis for further negotiations. Likewise, the European Parliament outlined his position in a number of non-binding resolutions.

    Europe has still a great chance to be a protagonist of the current transition if it is willing to set aside ineffective national interests and develop a long-term and common strategy. But it should hurry.

     

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  • Data Economy

    data path

    Making Europe fit for the ‘Big Data’ economy

    The European Commission has taken an important first step in outlining possible elements of an EU action plan on Big Data. It is now essential to get the policy framework right. The faster the better. A second wave of digital transformation is coming. [read more]
    byJohn Higgins | 12/Jan/20155 min read
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    The European Commission has taken an important first step in outlining possible elements of an EU action plan on Big Data. It is now essential to get the policy framework right. The faster the better.

    A second wave of digital transformation is coming.

    The first one revolutionized the way we order information and spans technological advances from the advent of the mainframe computer to the arrival of Internet search.

    [Tweet “This second wave will reinvent how we make things and solve problems.”]

    Broadly it can be summed up in two words: Big Data. The expression ‘Big Data’ is used to describe the ability to collect very large quantities of data from a growing number of devices connected through the Internet.

    Thanks to vast storage capacity and easy access to supercomputing power – both often provided in the cloud – and rapid progress in analytical capabilities, massive datasets can be stored, combined and analysed. In the next five years Big Data will help make breakthroughs in medical research in the fight against terminal illnesses. Per capita energy consumption will decline sharply thanks to smart metering another application of Big Data.

    Traffic jams will be rarer, managing extreme weather conditions will become more science, less guesswork. Makers of consumer goods of all kinds will be able to reduce waste by tailoring production to actual demand. This new ‘data economy’ will be fertile ground that will allow many new European SMEs to flourish.

    Broad adoption of such Big Data applications can only happen if the data is allowed to flow freely, and if it can be gathered, shared and analysed by trusted sources. Size definitely does matter. The bigger the dataset, the more insights we can glean from it, so it’s important that the data can flow as widely as possible.

    [Tweet “Some elements of Big Data might involve personal data.”]

    People need to be confident these are protected by laws and agreements (such as safe harbour). All actors in the data economy must work hard to ensure that data is as secure as possible against theft and fraud.

    The European Commission has taken an important first step in outlining possible elements of an EU action plan for advancing towards the data-driven economy and addressing Europe’s future societal challenges.

    To complement this initiative DIGITALEUROPE has drafted a paper outlining what we see as the policy focus in relation to Big Data.

    We have identified eight priorities:

    – Adopt a harmonised, risk-based and modern EU framework for personal data protection that creates trust while at the same time enabling societally beneficial innovations in the data economy

    – Encourage the protection of Big Data applications from cyber attacks, focusing regulatory efforts on truly critical infrastructures

    – Support the development of global, voluntary, market-driven and technology-neutral standards to ensure interoperability of datasets

    – Clarify the application of EU copyright rules so to facilitate text and data mining

    – Boost the deployment of Open Data by transposing the Public Sector Information Directive into national law by June 2015 at the latest (EU Member States)

    – Create trust in cross-border data flows by supporting the implementation of the Trusted Cloud Europe recommendations

    – Continue addressing the data skills gap by supporting initiatives like the Grand Coalition for Digital Jobs

    – Continue encouraging private investment in broadband infrastructure and HPC technologies with public funding DIGITALEUROPE is ready to engage constructively with the European Commission, Parliament and Council to help them formulate a European action plan for the data economy

    It is essential to get this policy framework right, but it is also important to move fast. While Europe is preparing the ground for widespread adoption of the new digital age, the rest of the world is not standing still.

     

    photo credit: data.path Ryoji.Ikeda
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  • Digital Single Market

    Heat

    Why competition policy can’t fix most digital market problems

    Dozens of players keep running to EU competition authorities amid current wars around tech and telecoms policy. Anxious decision-makers are also weighing in by calling for more antitrust action. Yet the idea that competition law is a panacea for every mar [read more]
    byRyan Heath | 16/Dec/20145 min read
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    Dozens of players keep running to EU competition authorities amid current wars around tech and telecoms policy. Anxious decision-makers are also weighing in by calling for more antitrust action. Yet the idea that competition law is a panacea for every market problem is misplaced. In fact, it could delay Europe’s innovation dividend.

    The fundamental rule in any market economy is that market forces, rather than public interventions, should be the predominate factor. If you have an idea or a problem – you try to address it first on market terms.

    If you think the market has changed so much that there is no real level playing field, then you lobby to have the rules changed. Only in the case that all these efforts fail, or in the case that the rules were appropriate but broken in ways that significantly harm consumers and competitors, do you then think about getting competition law involved.

    There are few instances in the current wars around tech and telecoms policy handling where these tests are met. Yet dozens of players keep running to the European Commission competition regulators to fix their problems.

    Why?

    Competitors who are failing in the market find it financially rational to roll the dice with regulators in the hope they catch a break.

    “Five millions euros on a fake grassroots campaign and a bunch of mega-bucks lawyers – no worries! We could win a billion!” On the other side of the coin, companies under investigation or threat of investigation find it handy to string the process out.  “Why settle now?  Sure that would be simpler but if we string it out we could squeeze another billion out of our business model!” Ker-ching! [Tweet “EU and national regulators risk being turned into service-providers to warring market players”]

    In this world-view if only the EU was fairer, tougher, softer, saner, quicker, more inclusive, less obsessed with consumers … pick your adjective, then all their problems would go away.

    Let telcos merge!  Take on Google! Show the Americans we are not pushovers! Save consumers! All these actors want the EU to be either digital-surgeon-for-hire or digital-death-squad-for-hire. They are wrong to want it, and deluded to think the EU can deliver it, even in the few cases where the current treaty makes it legally possible.

    Those problems on their own might be containable. But another factor risks pushing this growing snowball out of control: the market players often misunderstand their own long-term interest.

    Let me give you some examples.

    1. Telecoms companies that insist on in-country mergers. These mergers are seen as a solution to their failing business models (shrinking margins on non-data services, and cross-subsidising rip-offs like roaming). Such companies run to the EU because their national regulators do not give the answers they want.

    In trying to squeeze the Commission before there is a real EU telecoms single market they risk throwing away the last shreds of trust they have with their customers (they are already the most complained-about sector). Recent in-country mergers haven’t improved networks (because you need external finance not medium-term merger efficiencies for that) but they have increased consumer prices.

    More broken promises like this will lead to things like the most restrictive type of net neutrality laws and willingness by authorities to let these telcos go bankrupt.

    Remember that the privately-owned companies can go bust and their cables and towers will simply be sold onto to someone less greedy. The government-owned companies are the biggest danger. They want mergers because they are too afraid to do what they really need to do: restructure, including making tens of thousands of unnecessary staff redundant.

    That is politically difficult today – so it’s much easier to blame EU regulation and run to EU competition enforcers to get them out of the real business choice they face. These former government monopolies risk bringing the whole house down, and it’s really got nothing to do with competition law.

    2. Companies that lined up to stall a Google search settlement (including Google). There’s a whole question of whether this investigation was ideal, what’s less ideal is the unseemly harangue around it. I’ve lost count of the number of fake organisations lobbying for certain outcomes. Here’s a tip: any group with an adjective in the title is probably fake. Interests should lobby as themselves or via a neutrally-titled industry association, not via some imaginary group a citizen can’t themselves join.

    This endless jockeying over Google is virtually identical to the games around the Commission’s 2012 data protection proposals. And all that won the antagonists was a half-cooked court ruling that posed more new questions than it gave answers.

    The other analogy that comes to mind is the copyright policy gridlock in Europe. 14 years without a revision of the law, and Europeans are forced to pirate content to make up for the parallel trench-warfare regulators and stakeholders have built for themselves.

    The main companies in all these games think their choice is short-term rational. Maybe. But it isn’t long-term rational because it’s one big distraction from the task of innovation. And it’s downright crazy for European society, because it delays Europe’s innovation dividend: jobs, and keeps European competitors in the thrall of the stupid meta-narrative that everything revolves around DG Competition.

    A line needs to be drawn under this nonsense. Is that giving into new digital monopolies? No.

    Google is not the monopoly when it comes to the internet – the US government is. Which is why the European Union has long wished to reform internet governance so that the monopoly is broken, and a fair level playing field can exist. Now that the US Government itself agrees to that, the task is to ensure it happens. That is the first big picture. Lining regulatory guns up against one successful player in a sub-market, a player which by definition is not a monopoly, is a fool’s errand.

    The second big picture is that of big data. It’s not about the competitive tactics of Google or Amazon or Facebook. The big picture is about how data in a new means of production and how the manipulation of it is going to alter what it means to be human.

    Dealing with that question is way above DG Competition’s pay grade, but it is the question that should be consuming all of us – the companies included.

    And here’s the ultimate proof of why competition law isn’t going to hit the nail on the head: the only thing the data companies would be scared of is if they were forced to register and publish their algorithms.

    That may be a bad idea for lots of reasons, but it is the only thing that would truly allow competition authorities to know what is going on and to fix it. DG Competition can’t force that and the EU is never going to be legally allowed to propose it.

    So it’s time to worry less about sideshows dressed up as the main game.

    It’s time to realize that competition law is just one instrument of one minority factor in the wider digital revolution.

    If we don’t, we’re all shooting ourselves in the foot.

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  • Data Economy

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    Transatlantic relations: A matter of trust

    How big is the divide between the United States and Europe when we talk about data protection and cybersecurity? And what is at the basis of the current differences between the two regional players? Is it just Snowden and the NSA, or is it a deeper issue? [read more]
    byIgnasi Guardans | 16/Dec/20145 min read
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    How big is the divide between the United States and Europe when we talk about data protection and cybersecurity? And what is at the basis of the current differences between the two regional players? Is it just Snowden and the NSA, or is it a deeper issue?

    I had the privilege to contribute to the European perspective among a large group of experts attending an interesting exchange about this in Washington DC. What was supposed to be a conference on cybersecurity policy and regulation became an exchange on privacy and data.

    It is difficult for the EU and the US to work together in the field of online and data security as long as we have those other open quarrels on privacy protection and the rules applicable to transatlantic transfer of data.

    I was a bit surprised to realize that the whole data protection regulatory approach in the EU is observed with a mix of admiration and respect by US experts. And -interesting enough-, it is our model which is in the way of becoming a world standard among democracies.

    Boit systems are clearly different: we have a structured piece of legislation on privacy in Europe (currently in full revision), with clear definitions of privacy related data, and clear rules about the rights and obligations related to the use of those data; all with clear authorities responsible of enforcing those measures.

    In the US, the legal protection of online privacy results of a diversity of legal instruments, enforced by different agencies and authorities. This is combined with the importance given to self regulation by companies.

    But is the demand for online privacy by citizens that different in Europe and the US? No, as a matter of fact it isn’t. Americans do want their privacy protected as well.

    What is radically distinct among “us” and among “them” can be reduced to a word: trust.

    [Tweet “Europeans do not trust their government’s management of data and will not give them a blank check”]

    The Stasi, Ceaucescu, and many other personal experiences of authoritarian invasion of private life have taken their toll in the public perception of the risks of abuse of personal data. The US public does not have that memory. It is not a perceived risk. Definitely not in the mainstream public opinion.

    And what about private companies? What part of Europeans’ mistrust against Facebook or Google is addressed to those two companies and their privacy policies, or is addressed to their potential collaboration with the US Government? Difficult to say.

    But what appears to be clear is that a huge amount of Europeans request from their public authorities, including their European legislators and the European Commission, to assume an active role in protecting them from this external potential intrusion.

    An intrusion which, in the public perception, comes from the United States: in part from its Government, in part from its huge corporations which control the largest part of our online digital life.

    If this is true, then the current transatlantic difficulties regarding online privacy require a social approach, must deal with this citizen’s mistrust, and are not just a matter of technical negotiation between experts or burocrats on both sides of the Pond.

    The matter will only be solved if this public trust is reinforced. US companies have a lot to lose if the transatlantic flow of private data is halted; if the “safe harbour” scheme -which currently regulates in which cases private data originated in Europe can be transferred to and filed in the US- is interrupted.

    But we know well that this scheme is not working, and the threat to annul it is real (and it may be the Court of Justice who annuls it in the fist place). The Commission -under huge pressure from the parliament- is negotiating this with the US.

    But this is not just a legalistic issue to be solved like a trade negotiation of battery standards. This is a problem with deep social roots. The sooner American decision makers -in Congress, in Government-, understand this; the more possible it will be to rebuild the indispensable trust on the part of Europeans.

    And only with that trust in place we will be able to work together, US and EU, in the search of common answers to the essential common threats to our online and digital security.

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