Laying the foundations for a data-driven European economy

Less than two weeks into the New Year, and we have our first digital milestone moment of 2017. Yesterday saw the presentation of the final building blocks for Europe’s Digital Single Market: the European Commission’s Communication on Building a European Data Economy, the proposed Regulation on Privacy and Electronic Communications, and a Communication on Exchanging and Protecting Personal Data in a Globalised World. All of these initiatives will help Europe unlock the potential of cloud-based technologies.

Microsoft’s business is built on trusted data flows, underpinned by our belief that privacy is a fundamental right. Trust is what empowers our customers in Europe to use the intelligent cloud to digitally transform and grow their business – trust between them and us, and between their customers and partners. By enhancing the mechanisms for global data transfers and customizing solutions that safeguard people’s privacy, the Commission is protecting citizens’ rights while maximizing opportunities for innovation, growth and job creation.

The measures presented yesterday will complement last year’s adoption of a single, uniform data protection law for the EU, the General Data Protection Regulation (GDPR), which laid the ground for ensuring the free flow of data.

These benefits, however, will only be realized if all Member States adhere to the spirit of a regulation whilst implementing it. The GDPR contains many derogation clauses allowing Member States to vary in their transposition. We are strongly supportive of how the Communication on the European Data Economy, and specifically the European Free Flow of Data Initiative, discourages Member States from using derogations in the GDPR that could fragment the market.

Member States can and should advance Europe’s digital transformation by removing both real and perceived blockers to cloud adoption, through governments’ clear endorsements. They should also avoid adopting rules on data localization which fall outside the remit of the GDPR. A recent study by the European Centre for International Political Economy (ECIPE) found that such restrictions risk backfiring, potentially leading to productivity losses and the creation of additional trade barriers, or lowering the competitiveness of the economy, without achieving any intended objectives.

2016 presented a whirlwind of changes in the area of technology and data management. Expect 2017 to be no different. Gartner, Forrester and IDC predict that companies will continue to expand their use of emerging technologies such as augmented and virtual reality, laying the ground for even greater adoption in years to come. Artificial intelligence (AI) is no longer the stuff of science fiction. Many companies have recently made significant investments in AI and a range of real-world applications already exist in areas such as customer service, finance, or healthcare.

The Communication on the European Data Economy also highlights several legal issues which will require review as emerging technologies continue to evolve. We commend the thoughtfulness of this approach, which respects the spirit of better regulation principles, and we stand ready to contribute to this dialogue.

Given the rapid pace of technological change, compliance with new rules laid down in the GDPR will also need further consideration. We appreciate that the Commission is taking an active interest in the efforts of companies to prepare for the May 2018 deadline.

Finally, the proposed Regulation on Privacy and Electronic Communications provides an opportunity to discuss how to protect confidentiality without relinquishing services consumers have come to expect or hampering the development of new products and features. Nowadays, service providers do far more than simply transmitting communications, encompassing a range of simple functions which make our lives easier; features which tell you your email is missing an attachment, correct your spelling and grammar, enable speech-to-text transcription, or help organize your day. All these functions rely on “deep learning” and could potentially be impacted by the proposed expansion of confidentiality protections to new service providers, limiting their ability to develop and offer such innovations.

In its Work Programme for the year ahead, the European Commission prioritized the implementation of its Digital Single Market Strategy first presented almost two years ago. The initiatives presented this week are a positive step forward, but to fully achieve a digitally-driven economy, we must ensure companies can provide innovative services to users whilst also protecting privacy. Only by striking this right balance can we create a more innovative, inclusive and globally-competitive European Union for generations to come.

About the Author

Director European Government Affairs and Digital Policy, Microsoft

Cornelia Kutterer leads Microsoft's digital policy strategy for Europe, Middle East and Africa, focusing on issues related to the digital economy, the single market, and connectivity, as well as media and consumer laws. Prior to this, she represented Microsoft on Read more »