Last month, the European Commission released its Data Strategy with the aim to create a single data market, promoting greater data sharing to benefit businesses across all industries and sectors in the European Union. In light of this direction outlined by the European Commission, we take a closer look at the regulations and implications for Big Tech firms and the global data industry.
A framework for an emerging big data industry
This strategic framework looks to align regulations with the needs of an emerging big data industry in the EU. Whether or not these policies will prove successful depends on how organisations take advantage of this digital strategy. The policy plans would change the present legal framework to foster an environment of commercial data collection, sharing and processing. It is clear that the EU is focussing its efforts on creating incentives to encourage and facilitate European data driven businesses and innovators. The aim is to create in-market competition with companies like Amazon and Google, as well as position the EU as a global data player.
Naturally, creating a single European data space with a genuine single market for data, will inevitably result in the exclusion of outside competitors. We would have to see how this develops to truly judge the ramifications both inside and outside the EU. Competition is a positive market force, however some of these policies may have notes of anti-competitive data sharing practices, in favour of European companies. As long as major tech firms operating within the EU abide by EU law, they should be able to continue with business as usual. However, this data policy has a public-private aspect, which could result in greater government-to-business data sharing. The beneficiaries of this data sharing and insight would be explicitly EU companies.
Helping EU companies grow by extending preferential status with data sharing should foster competition among existing big tech firms and encourage innovation across the board.
Global implications in UK and US markets
It is difficult to predict what the UK will do in response to this policy, especially with the legal challenges involved in leaving the EU. There is an argument that big data can only flourish when there is a large market to gather data from. The US and UK markets are very different, both in size and where the big data industry is at the moment, the US already has a well-established big data industry but is lagging behind Europe with data regulation. It will be interesting to see how data industries develop with light-touch regulation and huge markets in the US compared to potentially more hands-on regulation in the UK using a much smaller dataset.
Jurisdictional fragmentations and compliance questions
Whether Big Tech firms are able to actually follow the rules and comply with them without making changes to the way they operate across jurisdictions will depend on how the legal framework is applied in practice. For multinational companies, a cohesive corporate strategy is difficult to comply with if there are too many jurisdictional fragmentations in place. It is the duty of the legislators to help businesses by instating agreements with third countries, facilitating industry compliance with multiple jurisdictions. The biggest debate around compliance with the EU data strategy involves the use of AI and holding technology companies accountable in a world where algorithms influence decisions.
For example, by placing the responsibility of speech regulation on social media platforms, there is a risk of creating a digital environment where platform providers are also the judiciary actors that decide what is and what is not hate speech. It is important that legislators give clear guidelines on such fundamental issues to avoid limitations of free speech and prevent businesses from becoming intrinsic regulators of fundamental freedoms and rights.
Paving a way for cohesive data innovations
The European Commission is taking a brave step with this data strategy and it will be interesting to see how it unfolds in an industry that is developing faster than the pace of regulation. One thing we can be certain of is, data privacy and security will only rise higher on the corporate and legal agendas.