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
On Tuesday European Parliament will vote its position on the Digital Market Strategy (DSM). The raportuer for the text, MEP Kaja Kallas, explains what the legislative assembly is asking the Commission: i.e. more pro-innovation policies, more support to the sharing economy, less digital portectionism.
The Digital Post: What are the main requests laid out in the EP position on the DSM?
Kaja Kallas: The most important aspect of this report is its overarching strong support for innovation- friendly policies and its pro-innovation tone, especially with regard to online platforms. To point out some more specific paragraphs, I would emphasize the digital transformation plan and the big data review which aims to remove barriers to promote innovation in the data driven sector.
TDP: What are the actions, if any, stated in the DSM that the EP would like to be tweaked or on which it has some doubts?
KK: The EP report is sceptical of the Commission’s approach when it comes to platforms and is somewhat critical of the consultation which had leading questions in it. We are not sure if the outcome is the result of open questions or whether it is based on the ones that were a bit leading.
The EP’s report clarifies things that the DSM strategy does not. For example, it is clearly against consolidation in the telecoms sector. Also, the once only principle to be applied in public administration (so not just a pilot project) is brought in, and it goes beyond the strategy on things that we felt were necessary to cover in the report (sharing economy and the digital transformation of the industry for instance).
TDP: How the EP position is supporting sharing economy, as you have stated?
KK: The report shows strong support for the sharing economy and calls for the removal of artificial barriers which hinder its growth. This will enable us to reap the benefits of the digital market and create new opportunities for businesses, citizens, public bodies and consumers.
The report even states that employment laws should be updated to allow new flexible forms of employment to emerge.
TDP: What do you think of the approach of the Commission as regards online platforms?
KK: The consultation launched by the Commission seems to have been more focused on calming down the voices in some member states asking for protectionist measures against American companies.
There is nothing wrong with investigating whether there are problems, but the questions we pose should be open ended and aimed at really understanding the problems. This should not be about protectionism.
photo credit: Dan Mason
Artificial Intelligence is here to stay and is going to change our civilization in profound ways. That is why we must learn to live alongside machines and to make the best of their intelligence, argues Nell Watson engineer, entrepreneur and futurist thinker at Singularity University.
How do you see the AI developing in 10 years time? And what kind of challenges you see in perspective?
What are the main changes in our society that would result from such an evolution of machine learning?
What would be the negative impact and how to avoid it?
What kind of regulation would be needed? Should decision-makers start looking into it as of now?
Within the cultural landscape, if you should choose a science fiction book or movie, which better describes a likely future about the evolution of the Artificial Intelligence?
Nell Watson is an engineer, entrepreneur, and futurist thinker who grew up in Northern Ireland. She has a longstanding interest in the psychology of technology, and how that combination creates emerging social trends. Nell lectures globally on Machine Intelligence, AI philosophy, Human-Machine relations, and the Future of Human Society.
Platforms will be a major driving force for the economic growth in Europe and that’s why we have to show common sense when it comes to legislating on them, argues Czech MEP Dita Charanzová in a interview with The Digital Post on the sidelines of the TechFast session at Hanover Brussels.
How do you see the role of the European Parliament in the current debate about platform regulation?
Is regulation needed to address the dominant position of some platforms, i.e. to level the playingfield in the digital sphere?
How the EU can protect consumers without hurting the European startup ecosystem through over-regulation?
What are the right policies to help the European tech sector to compete with its US counterparts?
photo credit: daliscar1
While the European Parliament is due to adopt a report outlining legislation plans for civil use of drones, the European Aviation Safety Agency is looking to alleviate the bureaucratic burden for the operators.
International civil aviation has been built on the basis of the Chicago Convention (1944) among whose cornerstones one may notice Article 31 (all aircraft need a certificate of airworthiness (CofA) issued by the aviation authority) and Article 32 (each pilot needs a valid licence).
These two dogmas stood for decades, but today the fact is that we have thousands of small drones flying around without CofA and piloted by skilled remote pilots, who however do not hold a formal licence issued by the authority.
This situation is not illegal. On the contrary, several States in the world have promulgated rules which allow to authorise the operator (e.g. if the drone is less than 25 kg) to carry out commercial specialised operations (alias aerial work) in the absence of formal CofA and pilot licence. This is the case for France, Germany, Italy, UK and several other States around the world.
In the European Union (EU) civil drones above 150 kg are subject to current EASA rules and therefore to an impressive amount of paperwork: type certification of the design; individual certificate of airworthiness (CofA) for each produced drone; pilot licence and medical certificate; licence of certifying staff for maintenance; approval of organisations involved in design, in production, in maintenance, in operations and in training of licensed professions; approval of major changes by EASA and few more.
The “Riga declaration” signed by the political EU authorities at the maximum level last March, envisaged the possibility of extending the mandate of EASA to drones of any mass, but based on “proportionate” rules.
It is clear in fact that a small drone of few kilos, operated at few metres above the ground in the countryside has little possibility of causing a catastrophe. On the other side is equally clear that the terrific amount of paperwork summarised above would be unbearable for small and medium-sized enterprises (SMEs).
But what does “proportionality” means? Sometimes I say, in non-bureaucratic but expressive terms, that proportionality means: “neither kill humans … nor SMEs”.
So the major aviation safety regulators around the world, in 2015 began to think seriously whether the historical dogmas, and associated long list of official papers issued by the aviation authorities, should be maintained or not for small unmanned aircraft.
In February the USA Federal Aviation Administration (FAA) published a Notice of Proposed Rulemaking (NPRM) to allow drones of less than 25 kg to fly without CofA. In March, immediately after the Riga Declaration” EASA published a “Concept of Operations”, proposing three categories:
– “open” (low risk for society and no official papers issued by the aviation authority);
– “specific” (medium risk and only one mandatory paper from the authority: the operational authorisation or operator certificate);
– “certified” (high risk and the long list of certificates and approvals normally required for commercial aviation).
These ideas seem to be supported by the TRAN Committee of the European Parliament which has drafted a motion to urge the Commission to propose EU legislation for drones, including small ones, of course based on said principle of “proportionality”.
….but: do the citizens agree? Now they have the opportunity to express their opinions, since anyone can comment on the Advanced EASA Notice of Proposed Amendment (NPA) 2015-10, open for comments until 25 September, and which indeed develops more detailed proposals for the three categories, in preparation of the future EU legislation on the matter.
I would therefore urge all involved stakeholders to consult this A-NPA and to possibly comment. This A-NPA could lead to a proposal to amend the Basic EASA Regulation (EU 216/2008) and announces that, subsequently, EASA will propose implementing rules, while standard making bodies (e.g. EUROCAE) will develop industry standards.
The A-NPA states that one issue is the “huge number of drones: the production rate of small drones is simply unprecedented in aviation. In 2014, the two main manufacturers of small drones have produced around 1 million drones and they plan to produce the double in 2015. Such numbers go beyond the current NAA or Agency certification capacity”.
True. But hence to protect society we need more resources to oversee this emerging segment of industry. It is very unlikely that States will assign additional resources to aviation authorities to cope with drones; but additional resources could be provided by the market, through “qualified entities” (QEs), if only industry and operators were allowed to contract them.
Today Art, 13 of the Basic Regulation allows QEs to be contracted only by authorities. I guess it should be amended to allow QEs, once accredited by the authority, to stay on the market and support collective safety though independent assessments.
The most controversial point may be the “open” category, subject to no formal approval, but subject to a DG-GROW Directive on the safety of products, addressing manufacturers, but also importers of e.g. Chinese products.
The Directive would contain not only essential requirements, but also the obligation for the vendor to clearly inform buyers on the operational limitations (e.g. not above 50 m of height). An operator going beyond such limitations would be illegal and enforcement mainly delegated to police and not to the aviation authority.
This approach is not necessarily unsafe, providing the thresholds of the category are wisely set and the operational limitations as well. And especially if insurers and QEs would de facto impose market rules, beyond legal obligations. But it is definitely a very novel approach for the aviation community: I am sure that it will attract a lot of comments.
Picture credits: dronesurvivalguide.org
If we want the European digital sector to thrive we should focus more on promoting a cultural change than on regulatory intervention, argues MEP Kaja Kallas.
What should be the right regulatory conditions to help the European digital companies emerge and become global leaders?
I feel that very often less is more. If we think about all the possibilities we have today and all the new business models that have emerged, then we should keep in mind that these have been created in a rather innovation-friendly regulatory framework in that field. We should therefore be very careful before introducing new regulations.
What we should however promoting is a change in the way we treat failure in Europe – not through regulation but through cultural change- failure is not a bad thing, it shows that at least you tried. If more people are not afraid to fail, then more people will be encouraged to start something new.
The growth of the app economy is certainly creating jobs. However, in the eyes of its critics it may, by disrupting traditional business models, be also destroying jobs. How would you respond to these concerns?
Daron Acemoglu and James Robinson have written a very good book called “Why nations fail?” In that book they show through different historical examples how people have always tried to protect the traditional sectors whereas in order to be successful you should embrace creative destruction.
It means that yes, old jobs will disappear, but new jobs will emerge. You can fight against the knitting machine but if it has already been invented, it will come sooner or later and the craftsmen will have to find new jobs.
How the European Union should address the “threats” the app economy poses on trust and security?
Trust and security are important pillars of the internet economy; service providers have understood this as trust is at the heart of their business model which means that the market already regulates this to some extent. However, from the policy makers side we have to ensure that the right framework is in place for people to trust service providers with their data.
This means that it must be clear that the person is owner of his or her own data and he/ she can decide who can access and use this data.
In November you voiced skepticism about the European Parliament’s resolution requiring the unbundling of search engines. Why going down this way is a bad idea?
I think the debate was on wrong grounds – it was about one company in particular. My statement was that it is wrong for the parliament to start intervening in the investigation procedures that the Commission is already conducting.
The Commission has the right to demand unbundling if it finds that the search engine is an essential facility and abuses its dominant position.
The Commission has the tools to deal with this and the Parliament should not make it political.
How do you see the debate about the so-called principle of “platform neutrality”?
It is a very wide question. In general it seems to me that there is a push from some stakeholders to shift the discussion from net neutrality to platform neutrality that would only be applicable to one US Company. I do not think this is right as we might end up harming our European companies even more.
There are many layers to this discussion. First, the use of one platform does not necessarily preclude the use of another similar platform. If one is more user-friendly than the other one, people will change from one to another, as the switching costs are often quite low.
In addition, due to low barriers to entry and the limited cost of creating internet platforms, new ones can emerge quickly.
On the other hand, some platforms might have network effects that can make market entry more difficult for the newcomers.
Thirdly, many of the business models of internet platforms are built on unneutrality.