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Free movement of data as the 5th fundamental freedom of the European Union

It is clear that Europe can only maintain or increase its current position if united. At the same time, Europe is facing many challenges. One of those is the digital revolution, where Europe is finding it increasingly difficult to keep up with the pace of the United States and China. In order to maximize the opportunities offered by new technologies, Europe needs to be prepared for major changes.

Author:
Kaspar Kala, advisor at Estonian Ministry of Economic Affairs and Communications in Department of State Information Systems

 

Sixty years ago Belgium, France, Italy, Luxembourg, the Netherlands and West Germany agreed, via the Treaty of Rome, on the establishment of the European Economic Community (EEC), the Single Market. With The Treaty of Rome, the free movement of people, goods, services and capital was introduced. Today, that idea of ​​a war-free and democratic Europe has grown into a region unifying 28 Member States with more than 500 million inhabitants and is the world’s second largest economy after China [1].

However, Europe now needs to be prepared for changes ahead, not even ruling out the possibility to modify the Treaties of the EU as the scale of change brought about by the digital revolution is no longer within the borders of the existing four fundamental freedoms. Europe needs clear base norms for dealing with digital issues and routine operations in cyberspace in order to face up to future challenges. A new fundamental freedom will also be a clear message about the future: Europe wants to be the region where innovation and new technologies see the light of day for the first time.

New challenges – new rights?

New challenges, like the rise of populism, terrorist activity in Europe, the influx of migrants, low economic growth and digital unemployment raise the question of whether the introduction of a new right – the free movement of data as an underlying resource of the information society – is perhaps unnecessary, as it is already included in the four existing fundamental freedoms. Indeed, it can be argued that data will not flow without the free movement of people, goods, services and capital.

There is a lot of data about people, goods, services and capital, but “data” is an amorphous term that can often not be classified as a product or service [2, 3]. This is an ongoing problem and digital services are changing several existing sectors; for example, telecoms, taxation, and accommodation services. Therefore, it is possible to use this data as an input for analyzing and predicting how people use services and goods or use public transport.

In order to cope with these challenges, the EU is constantly creating new rules to bring the new technologies either under the regime that was already in place for the physical world, or by creating a new regulation that applies separately to a similar service in an e-channel (e.g. consumer protection rules in regular commerce and also e-commerce). In addition, data is not a resource that can be used up, and its use by one person does not hinder its use by another. This non-rivalrous nature of data also makes its economic logic different from that of oil or gold, which are often what data is compared to [4].

Therefore, in light of this, the question arises as to whether it is necessary to redefine the internal market provisions within the Treaties (the Treaty on the European Union and the European Union’s Operating Agreement) in such a way that data would stand alongside the free movement of people, goods, services and capital. This would ensure uniform principles for how the secure access to and exchange of data should work in the EU. Europe needs a long-term vision to describe the principles upon which data should be exchanged within the EU. Today, there are regulations on the secure exchange of personal data in the EU. It’s time to broaden how we view all data, since data is a basic resource in the information society, and technological innovation, the emergence of new business models and solving complex social problems will begin to depend on its availability [5].

Of course, the introduction of a new fundamental right would not mean that the exchange and use of data both privately and publicly would be unrestricted, but as such, it would signal that Europe wants to be at the forefront of digital issues in the world and is beginning with the process of creating horizontal principles. The Digital Single Market Strategy [6] is a step forward in this direction, but it is an European Commission action plan that does not involve all directorates within the Commission. The free movement of data as a fundamental right would mean that this would be a horizontal right and a requirement for areas from the sea to space, since no area will be left untouched by the digital revolution. Naturally, sectoral legislation that takes into account the specifications of each sector will continue to exist, but there would always be one principle – the free movement of data – as a basis to justify and verify the creation of the new rules.

What will be the effect of the fifth fundamental freedom?

It is, however, difficult to describe the precise content of the free movement of data as a new fundamental freedom. The signatories to the Treaty of Rome in 1957 probably had no clear idea how free movement of capital would lead to today’s stock and financial markets. Therefore, it is not possible to describe all the details of such a new fundamental freedom because it will be the result of a dialogue. However, it is possible to talk about what the purpose of this new freedom might be.

The purpose of the new fundamental freedom could be to create a European superpower with over 500 million consumers in digital matters, where clear principles are set for exchanging data across borders as well as between organizations. In many respects, rules in the context of the free movement of personal data have already been created, and the protection of that data will undoubtedly be an important pillar of the 5th fundamental freedom in the context of processing the data. At the same time, there is, however, a lot of data that does not require a protective approach, but does require a clear set of rules; for example, sharing data by and between sensors.

The public sector is required to disclose data as open data to be used by third parties, including the private sector. There are more and more private sector companies who have enormous amounts of data. Therefore, besides using the data held by the government, it is important to find ways to access and use data held by the private sector to create new goods and services to design public services and increase consumer choice.

Today, data is often used within just one agency or organization. The level of awareness in companies about the kinds of data they do not yet possess but could exploit is not consistently high. It is also not clear today who can use, purchase or sell the data and on what basis, and which rights belong to who and over which parts. The question of the “ownership” of data rights has resonated with many [7]. But perhaps to ensure access to data, and therefore the ability to use it to solve major European problems, we should approach data so that everyone who participates in the process of creating it becomes the “owner” of the data (i.e. the right to decide how to handle the data; in other words, to have access and the right to transfer the data to third parties of their choice). This would mean that people who buy a device that generates data are also part of the creation of this data and should also be given the right to share the data. Eventually data would be a future resource to be kept as accessible as possible to many, and not concentrated in the hands of a few [8].

The impact of data on the future knowledge society is difficult to underestimate. Although it is always difficult for laws to accompany technological advances, Europe needs a vision. Does Europe want to be a leader and a region where new technologies, innovations and responses to complex social issues emerge first? If so, then changes are necessary. The purpose of the Estonian presidency is to take further the debate of a digital Europe [9]. That is why Estonia has proposed a vision on the better and wider use of data in the EU [10].

 

Current blog is created according to the action plan for promoting the E-Estonia´s reputation.

The action plan for promoting the E-Estonia’s reputation has been developed and it’s partial implementation is coordinated by the European Union Structural Assistance support scheme “Raising awareness of the Information Society”, funded by the European Regional Development Fund.

 

Notes:

[1] See https://en.wikipedia.org/wiki/List_of_countries_by_GDP_ (PPP)

[2] See, e.g., the transcript of the expert meeting on the economy of data on 28/03: https://ec.europa.eu/epsc/events/hearing-building-european-data-economy_en#transcript.

[3] Data may be transmitted on receipt of goods or provision of services, but the data itself may also be the commodity. Also, data is taking the form of capital, for example as bitcoins. All this suggests that, although it is difficult to make a single definition or layout of data, due to its contextual properties, data has value (asset).

[4] See e.g. http://www.economist.com/news/leaders/21721656-data-economy-demands-new-approach-antitrust-rules-worlds-most-valuable-resource.

[5] For example, Google Trend (predictions based on search terms) has been used to predict outbreaks of influenza, to analyze local consumer trends, and even to analyze future financial performance.

[6] The European Digital Single Market Strategy, COM (2015) 192 final. Available at: http://eur-lex.europa.eu/legal-content/ET/TXT/HTML/?uri=CELEX:52015DC0192&from=EN.

[7] See e.g. https://www.wired.com/insights/2014/02/owns-data/, http://www.economist.com/news/leaders/21721656-data-economy-demands-new- Approach-antitrust-rules-worlds-most-valuable-resource.

[8] Some companies suggest that rather than the availability of data, the ability to obtain value from huge amounts of data is important in the information society. Therefore, the hunt for the best specialists continues, and some big companies are undoubtedly in a privileged position, but data as a base value should not be seen to be owned by anybody. It belongs to everyone. See Speech of DeepMind Technologies Chief Executive Officer Theory of Everything, https://www.youtube.com/watch?v=rbsqaJwpu6A (beginning from 13:40).

[9] Priorities of the Estonian Presidency. See https://www.eu2017.ee/priorities-estonian-presidency.

[10] Unlocking the maximum potential of data – the free movement of data initiative. See https://www.eu2017.ee/news/insights/FreeMovementOfData.

 

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