31 Towards a data-driven economy in Europe
| Committee's assessment
| Politically important |
| Committee's decision | Cleared from scrutiny; drawn to the attention of the Culture, Media and Sport and Business, Innovation and Skills Committees
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| Document details | Commission Communication: Towards a thriving data-driven economy (36199), 11603/14 + ADD 1, COM(14) 442
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| Legal base | —
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| Department | Culture, Media and Sport and Business, Innovation and Skills
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Summary and Committee's conclusions
31.1 The Commission Communication follows on from
a 2012 Commission Communication, Unleashing the potential of
cloud computing. Its accompanying Commission Staff Working
Document reviews the work done since the 2012 Communication was
published.
31.2 The 2012 Commission Communication highlighted
the potential of cloud computing to cut users' IT expenditure
and enable many new services to be developed. The main problems
the Commission identified were: fragmentation of the digital single
market arising from jurisdictional issues such as different national
legal frameworks and uncertainties over applicable law, digital
content and data location; problems with contracts in relation
to data access and portability, change control and ownership of
data; and the problem of a multitude of standards in a very immature
industry. The Commission proposed three "cloud-specific"
Key Actions: dealing with what it called "The Jungle of Standards";
safe and fair contract terms and conditions; and establishing
a European Cloud Partnership to drive innovation and growth from
the public sector.
31.3 The then Minister (Mr David Willetts) agreed
that rapid take-up would have benefits in terms of both direct
cost savings and through more efficient use of physical and human
resources. The work the Commission described in its Communication
would go ahead; it was therefore vital that the UK was able to
influence this work, and "limit any negative impact on our
own priorities".
31.4 The present Minister (Mr Edward Vaizey) outlines
the work thus far — on standards and certification, contract
terms and conditions, and the European Cloud Partnership. Regarding
this latter, he notes that: the Commission has set up an advisory
body and published a paper on a "Trusted Cloud Europe"
in March 2014, which includes best practices in Cloud use and
specific recommendations on: the creation of a common legal, operational
and technical framework; a review of formal data location requirements;
and on promoting the Cloud in IT procurement by public bodies;
that this was subject to a public survey and questionnaire; that
the Commission will respond by 2015; and that this "may include
regulatory, market-led and co-regulatory options".
31.5 The latest Commission Communication sets out
three key characteristics of a thriving data-driven economy:
— "availability of good quality, reliable
and interoperable datasets and enabling infrastructure;
— "improved framework conditions that
facilitate value generation from datasets;
— "a range of application areas where
improved big data handling can make a difference."
31.6 The Commission highlights three broad action
areas to ensure that the European digital economy can keep ahead
of the "data revolution" and does not fall behind the
global trend. These include plans for a contractual Public-Private
Partnership on data; a European network of centres of competence
to increase the number of skilled data professionals; a strategy
recognising the potential of digital technologies to support digital
entrepreneurship; ensuring the availability of data and interoperability;
and securing the enabling infrastructure.
31.7 The Minister welcomes the Commission's recognition
of the importance of data for the economy, and says the Communication
is in line with the UK Government's views and aligns with some
of the key areas in its "Seizing the Data Opportunity"
strategy for data capability, of October 2013. The Commission's
focus on encouraging the release of open data is also in line
with the Government's policy; so, too, the creation of the digital
single market. In terms of the data protection regulation,
the Government wants to see EU data protection legislation that
protects the civil liberties of individuals, while allowing for
proper public protection and economic growth and innovation, and
is working to ensure that these are achieved in tandem in a final
text, not at the expense of one or the other.
31.8 Generally speaking, the Minister regards the
Communication and the Commission Staff Working Document as reflecting
a lesser need for a European-only approach than that which appeared
to be advocated by the earlier Communication on Cloud Computing.
However, given that the response to the "Trusted Cloud Europe"
report could include regulatory options, and that activity by
the Commission to date on Cloud Computing has also sometimes been
overly Europe-only focused, the Government will continue to engage
with relevant Commission officials to ensure that any future action
takes appropriate business and consumer needs into account and
reflects the global nature of this area, whilst needing to ensure
secure and trusted services inside the EU; and will argue for
non-regulatory actions where possible and also informally consult
with industry to ensure that their views fully inform the UK position.
31.9 There would appear to be nothing untoward
about the Commission's approach thus far. But it has a track record
of seeking to widen its embrace in the world of ICT, with regard
to which the Minister has rightly marked its card. It would seem
that any regulatory proposals are not likely to be put forward
before 2015, when the Commission publishes its response to its
"Trusted Cloud Europe". If this is not in the form of
a depositable document (i.e., a further Communication or Commission
Staff Working Document), then we should be grateful if the Minister
would inform us of its contents and his views thereon.
31.10 In the meantime, we now clear the Commission
Communication, which we are drawing to the attention of the Culture,
Media and Sport and the Business, Innovation and Skills Committees
because of the importance of the subject matter and the need to
keep an eye on the Commission's approach.
Full
details of the documents:
Commission Communication: Towards a thriving data-driven economy:
(36199), 11603/14 + ADD 1, COM(14) 442.
Background
31.11 The EU Framework Programme for Research and
Innovation, otherwise known as Horizon 2020, is:
"the financial instrument implementing the
Innovation Union, a Europe 2020 flagship initiative aimed at securing
Europe's global competitiveness. Running from 2014 to 2020 with
an €80 billion budget, the EU's new programme for research
and innovation is part of the drive to create new growth and jobs
in Europe.
"Horizon 2020 provides major simplification
through a single set of rules. It will combine all research and
innovation funding currently provided through the Framework Programmes
for Research and Technical Development, the innovation related
activities of the Competitiveness and Innovation Framework Programme
(CIP) and the European Institute of Innovation and Technology
(EIT).
"The proposed support for research and innovation
under Horizon 2020 will:
· "Strengthen the EU's position in
science with a dedicated budget of €24,598 million. This
will provide a boost to top-level research in Europe, including
an increase in funding of 77% for the very successful European
Research Council (ERC).
· "Strengthen industrial leadership
in innovation €17,938 million. This includes major investment
in key technologies, greater access to capital and support for
SMEs.
· "Provide €31,748 million to
help address major concerns shared by all Europeans such as climate
change, developing sustainable transport and mobility, making
renewable energy more affordable, ensuring food safety and security,
or coping with the challenge of an ageing population".[134]
31.12 Cloud computing (for which there is no single
definition) is (as the Commission put it in its earlier Commission
Communication, "Unleashing the Potential of Cloud Computing
in Europe": COM(12) 529) the storing, processing and
use of data on remotely located computers accessed over the internet.
Users can thereby command almost unlimited computing power on
demand, do not have to make major capital investments to fulfil
their needs and can get to their data from anywhere with an internet
connection. The Commission thus sees cloud computing as having
the potential to slash users' IT expenditure and enable: many
new services to be developed; even the smallest firms to reach
out to ever larger markets; and governments to make their services
more attractive and efficient even while reining in spending.
31.13 The main problems the Commission identified
were:
— fragmentation of the digital single market
arising from jurisdictional issues such as different national
legal frameworks and uncertainties over applicable law, digital
content and data location;
— problems with contracts in relation to
data access and portability, change control and ownership of data;
and
— the problem of a multitude of standards
that have arisen in this very immature industry.
31.14 The Commission proposed three "cloud-specific"
actions:
— Key Action 1 - Cutting Through The Jungle
of Standards;
— Key Action 2 - Safe and Fair Contract
Terms and Conditions; and
— Key Action 3 - Establishing a European
Cloud Partnership to Drive Innovation and Growth from the Public
Sector.
31.15 The Committee considered the proposal on 31
October 2012 but could not see clearly where it was going. The
Commission — seemingly impelled by prospective investment
and job creation figures whose soundness is not entirely clear
— said that in 2013 it would deliver on the Key Actions,
prior to "a rapid take-off phase from 2014-2020". The
then Minister (Mr David Willetts), however, gave the impression
that work had barely begun. The Committee therefore asked him
to explain his position further.
31.16 In his response of 12 November 2012, the Minister
said cloud computing was a significant growth opportunity, and
agreed that rapid take-up would have benefits in terms of both
direct cost savings and through more efficient use of physical
and human resources. The work the Commission described in its
Communication would go ahead. It was therefore vital that the
UK was able to influence this work, and "limit any negative
impact on our own priorities".
"KEY ACTION 1: CUTTING THROUGH THE 'JUNGLE OF
STANDARDS'
"Relative to most other Member States, the
UK Government's Cloud Programme is already well advanced and as
such it is paramount that we protect the interests of the UK here.
Like the USA, the UK has a strong preference for a market-driven
approach to standards, rather than top-down, mandatory standards
imposed by Government.
"Nonetheless, where there is a role for
public bodies is to convene and facilitate agreement by industry
on basic standards and ways of working. The European Telecommunications
Standards Institute (ETSI) has been tasked by the Commission to
take this forward in Europe. In the USA the National Institute
for Standards and Technology in the USA are undertaking a similar
role [sic].
"My Department represents the UK in ETSI,
where the relevant official is both vice-chair of the board, and
is also playing an active role in the steering committee working
on cloud computing. We are fully engaged in encouraging ETSI to
maintain a market-led approach throughout this work. In particular
we will seek to avoid certification procedures for Cloud products
and services that are imposed by the Commission or governments,
rather than being market led.
"KEY ACTION 2: SAFE AND FAIR CONTRACT TERMS
AND CONDITIONS
"The Commission's work programme on safe
and fair contracts is a useful next step, with which the UK will
engage as the need arises. We would be content with a review of
standard contractual clauses applicable to the transfer of personal
data. The Government would support a code of conduct for cloud
computing advisors that is industry-led and, therefore, welcomes
the Commission's plans to work with industry on this matter.
"With respect to standardised key contract
terms and conditions in line with Common European Sales Law (CESL),
while the UK is involved in EU negotiations on the proposal for
a CESL at Working Group level, we remain to be convinced by the
proposals themselves which we believe could introduce an unnecessary
layer of complexity and confusion for both consumers and businesses.
The UK Government has conducted a Call for Evidence on the CESL
proposals to seek the views of UK stakeholders, which closed earlier
this year. My colleague the Secretary of State for Justice will
be writing to you in more detail on this issue.
"KEY ACTION 3: ESTABLISHING A EUROPEAN CLOUD
PARTNERSHIP TO DRIVE INNOVATION AND GROWTH FROM THE PUBLIC SECTOR
"As I set out under Key Action 1, the Government's
Cloud Programme is well advanced compared to most Member States.
The Cloud Programme supports our wider ICT strategy which aims
to reduce costs to Government, reduce the length of time to go
through procurement, and give more choice to Government through
opening the market to a range of suppliers, particularly SMEs.
The Government, therefore, must ensure that the delivery of our
objectives through the Cloud Programme is not undermined by the
European Cloud Partnership, for example through closing of the
market or increases in the time for procurement. There are no
obvious benefits to the UK in participating in the procurement
aspects of the European Cloud Partnership. However, we will ensure
that routes are kept open for UK-based industrial and academic
interests to participate, should they wish to do so, whilst ensuring
that the UK is not committed upfront to adopting any of the outcomes."
31.17 The Minister concluded by saying that:
— there were no plans for the Communication
to be discussed further at the Telecoms Working Group;
— the Presidency had not shown an inclination
to seek Council Conclusions on it; and
— should any legislation be brought forward
in the future, he would write to the Committee again.[135]
The Commission Communication
31.18 This further Commission Communication, "Towards
a thriving date-driven economy", sets out what the Commission
sees as the key characteristics of a data-driven economy and then
includes a range of conclusions to support the European transition
towards this new economy. The document builds on the results of
various consultations on trusted cloud and digital infrastructure,
as well as the legislative proposals under negotiation including
the European Data Protection Regulation and the Network and Information
Security Directive.
31.19 In his Explanatory Memorandum of 21 July 2014,
the Minister for Culture and Digital Industries at the Department
for Business, Innovation and Skills and the Department for Culture,
Media and Sport (Mr Edward Vaizey) notes that, with the amount
of data being produced and stored increasing at an exponential
rate, new products and services, scientific methods and business
processes will all undergo dramatic changes — big data technology
and services are expected to grow worldwide to £9.9 billion
in 2015 at a compound annual growth rate of 40%.
31.20 The Minister highlights three key characteristics
of a thriving data-driven economy set out in the Commission Communication
:
— "availability of good quality, reliable
and interoperable datasets and enabling infrastructure;
— "improved framework conditions that
facilitate value generation from datasets;
— "a range of application areas where
improved big data handling can make a difference."
31.21 The Minister then notes that, having made the
case for a strong data-driven economy, the Communication highlights
three broad areas for action to ensure that the European digital
economy can keep ahead of the "data revolution" and
ensure that it does not fall behind the global trend:
"The first area is community building, which
includes: plans for a contractual Public-Private Partnership on
data; a European network of centres of competence to increase
the number of skilled data professionals; and a strategy recognising
the potential of digital technologies to support digital entrepreneurship.
"Under the second area about developing
framework conditions', the Commission focuses on two key areas:
ensuring the availability of data and interoperability —
including open data and open data standards; and securing the
enabling infrastructure focussing on cloud computing, high performance
computing and 5G.
"The final area for action is regulatory
issues. In this section, the Commission refers to the European
Data Protection Regulation — the need to strengthen individuals'
trust and confidence in the digital environment and support R&D
that incorporates privacy by design; considers how data mining
and text mining can be enhanced; and supporting R&D to reduce
the risk of data breaches."
31.22 Alongside this Communication, the Commission
have also published a Staff Working Document on the implementation
of the earlier Communication, "Unleashing the Potential
of Cloud Computing in Europe". The Minister notes the
three areas where the Commission said steps were needed: fragmentation
of the digital single market; problems with contracts and "addressing
a jungle of standards in cloud", and also identifies ancillary
policy areas that could impact on cloud computing, "including
the on-going negotiations on the data protection framework, copyright
and other intellectual property aspects of cloud computing, security
of networks, environmental challenges, e-skills and taxation".
31.23 With regard to progress on the key actions
on cloud computing highlighted by the Commission, the Minister
says:
"Standards and Certification, where
in December 2013 the European Telecommunication Standards Institute
(ETSI) mapped existing cloud standards in an exercise which provided
greater transparency for the market. This was accompanied by work
undertaken by the European Union Network and Information Security
Agency (ENISA) which published a validated list of cloud computing
relevant network and information security certification schemes
in February 2014. This work will continue to be updated by ENISA.
"Contract terms and conditions, where
the Commission convened an expert group on model contract terms
and conditions for cloud services for consumers and small firms
alongside a group that examined industry service level agreements
for professional users. The group examined best practices across
Europe and results will be delivered by the end of 2014. There
has also been a further examination of service level agreements
in collaboration with the Cloud Select Industry Group which will
deliver guidelines that define standard options for these contracts
by summer 2014. This Group also delivered a Code of Conduct for
cloud service providers on Data Protection in February 2014. There
may be future work undertaken on insurance for cloud services.
"European Cloud Partnership, this
was set up as an advisory body on Cloud to the Commission and
published a paper on a 'Trusted Cloud Europe' in March 2014 which
includes best practices in Cloud use and specific recommendations
on: 1) the creation of a common legal, operational and technical
framework; 2) a review of formal data location requirements and
3) to promote cloud in IT procurement by public bodies. The working
document then notes that the report was subject to a public survey
and questionnaire (not a formal consultation). The Commission
will respond to this report, including its recommendations and
the response to the survey and questionnaire, by 2015 and this
may include regulatory, market-led and co-regulatory options.
"Finally, the working document noted the
links between the European Cloud Computing Strategy and the Horizon
2020 programme and on-going dialogues with a number of third countries
on key themes related to cloud computing."
The Government's view
31.24 The Minister welcomes the Communication, and
the Commission's recognition of the importance of data for the
economy, and describes the Communication as:
"in line with the UK Government's view
that data underpins our businesses and our economy; providing
new insights into consumer needs and enabling new products and
services to be developed."
31.25 He recalls the Government's strategy for data
capability, Seizing the Data Opportunity, of October 2013:[136]
"which sets an overall vision to develop
the UK's data capability and establish the UK as a world leader
in extracting knowledge and value from data for commercial and
societal benefit… [and which]… recognises infrastructure
and skills as two of the key issues, which aligns with some of
the key areas highlighted in this Communication."
31.26 The Minister also notes that the Commission's
focus on encouraging the release of open data is also in line
with the UK Government's policy:
"The Commission proposes to establish an
open data incubator which will help SMEs set up supply chain and
promote links to local data incubators across Europe. We expect
this to link to the UK's Open Data Institute, which was set up
2012 and is the world's first centre created to help businesses
innovate, research and exploit the opportunities of open data."
31.27 The Minister also describes the creation
of the digital single market as a UK government priority:
"The use of data is seen as a valuable fuel
to drive the DSM and would lead to the creation of new services,
creating opportunities for businesses and consumers alike. Thus,
it is welcome that the Commission recognises the important role
of data in driving a digital economy."
31.28 In terms of the data protection regulation,
the Minister says:
"The Government wants to see EU data protection
legislation that protects the civil liberties of individuals,
while allowing for proper public protection and economic growth
and innovation. We are working to ensure that these are achieved
in tandem in a final text, not at the expense of one or the other."
31.29 The Minister then notes that some of the actions
identified for support under Horizon 2020 (e.g. the open data
integration and reuse incubator for SMEs) form part of the current
ICT Work Programme, and says:
"The Government will consider those aspects
of big data the Commission has highlighted for support later in
ICT Work Programmes against the Horizon 2020 Specific Programme
and the merits of other topics."
31.30 The Minister also says:
"All of the devolved Governments have expressed
an interest in the Communication and will be informed of any future
developments. Open Data is a devolved matter and Scotland is in
the process of developing its own data strategy (due to be published
at the end of this year). The strategy will be in line with
the G8 principles (already adopted by UK), which support and encourage
the release of open data and so is aligned to Commissions aspirations."
31.31 Looking ahead, the Minister says that, as the
working document on the Cloud Communication was a report of work
undertaken by the Commission over the last two years, there are
no direct policy implications for the UK:
"This Communication and the accompanying
Working Document discuss Cloud Computing and reflect a lesser
need for a European only approach than appeared to be advocated
by the earlier Communication on Cloud Computing. However, the
Commission's view is that the response to the Trusted Cloud Europe
report by 2015 could include regulatory options. Activity by the
Commission to date on Cloud Computing has also sometimes been
overly Europe-only focused. HMG will thus continue to engage with
relevant Commission officials to ensure that any future action
takes appropriate business and consumer needs into account and
reflects the global nature of this area, whilst needing to ensure
secure and trusted services inside the EU. HMG will argue for
non-regulatory actions where possible and also informally consult
with industry to ensure that their views fully inform the UK position.
"The work advocated on mapping standards
and issues in specific vertical industry segments is helpful.
It is a necessary predication to understanding where commonalties
of structure and service are found and what is needed to allow
interfacing that will support data driven economies. Whilst HMG
would not wish to see the Commission driving standards to provide
this interfacing it would be helpful to know how the Commission
is planning to use the as-is analysis to promote industry led
interfacing.
"The 5G PPP is still in development, with
organisation and calls being formulated. It has the potential
to provide a clear focus for development work on 5G in Europe
and hence be a vehicle for 5G work in the UK (such as the 5G Innovation
Centre based at Surrey University) to be presented to the global
discussions that will define the generally accepted 5G platform.
HMG will thus continue to encourage UK academic and industrial
participation."
31.32 As the Commission Communication contains no
legislative proposals, the Minister says that no impact assessment
has been produced (either by the Commission or the UK Government);
and nor have any financial impacts been estimated. By the same
token, the Government has not conducted any specific consultation
on the recommendations included within the Communication, but
will do so on any concrete legislative proposals that may subsequently
come forward in light of those recommendations.
31.33 The Minister understands that the Italian Presidency
is not planning any Council conclusions on the Communication,
but notes that the Commission plan to hold further consultations
with Parliament, Council, Member States and stakeholders to draw
up a more detailed plan for the data-driven economy, and undertakes
to provide updates "as relevant".
Previous Committee Reports
None; but see Eighteenth Report HC 86-xviii (2012-13),
chapter 3 (31 October 2012) and Twentieth Report HC 86-xx
(2012-13), chapter 14 (21 November 2012).
134 See http://ec.europa.eu/research/horizon2020/index_en.cfm?pg=h2020. Back
135
See Twentieth Report HC 86-xx (2012-13), chapter 14 (21 November
2012). Back
136
Available at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/254136/bis-13-1250-strategy-for-uk-data-capability-v4.pdf.
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