Documents considered by the Committee on 22 November 2017 Contents

24Digital Single Market: Building a European Data Economy

Committee’s assessment

Politically important

Committee’s decision

Cleared from scrutiny

Document details

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions

Legal base

N/A

Department

Digital, Culture, Media and Sport

Document Number

(38456), 5349/17 + ADD 1, COM(17) 9

Summary and Committee’s conclusions

24.1As part of its Digital Single Market Strategy, the European Commission adopted on 10 January 2017 a Communication called “Building a European Data Economy”.318 The Communication concludes that a policy framework is needed that enables data to be used throughout the value chain for scientific, societal and industrial purposes. It identifies a number of challenges to achieve this aim and possible interventions to met these. A public consultation has been underway since 26 April 2017.319

24.2The Communication explains that the Commission:

24.3In the Government’s Explanatory Memorandum, the Minister of State for Digital (Matt Hancock) states that the Government would support action to restrict data localisation measures because doing so would reduce barriers to trade and the growth of businesses. The European Scrutiny Committee’s report (8 March 2017) found the Communication politically important because the development of the EU acquis in relation to the data economy would potentially have significant implications for UK businesses post-exit, and requested more information about these implications

24.4In his letter of 18 April 2017, the Minister confirmed that the Commission’s Communication neither completely dispelled nor confirmed concerns that EU action on data localisation could liberalise the flow of data within the EU while simultaneously introducing EU-level data localisation requirements for service providers from third countries. The Minister has now provided the Committee with a copy of the Government’s response to the Commission’s consultation on the different possible interventions outlined in its Communication.

24.5On 13 September 2017, following the President of the European Commission’s State of the Union Speech, the Commission adopted a proposal for a Regulation on a framework for the free flow of non-personal data in the European Union.320

24.6We thank the Minister for the Government’s response to the Commission’s consultation on building a European data economy. The Government’s response states that:

24.7We note that the European Commission’s Digital Single Market Strategy Mid-Term Review, published on 11 May 2017, envisages a wide range of data related initiatives, including: a legislative proposal (by autumn 2017) which will cover the principle of the free flow of data; the principle of the porting of non-personal data and the principle of availability of certain data for regulatory control purposes when stored in another Member State;321 and an initiative on accessibility and re-use of public and publicly funded data sets in spring 2018.

24.8As the Commission has subsequently adopted its proposal for a Regulation on the free flow of non-personal data in the EU, we now clear this document from scrutiny.322

Full details of the documents

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Building a European Data Economy: Building a European Data Economy: (38456), 5349/17 + ADD 1, COM(17) 9.

Background

24.9Data, often described as the “currency of the internet”, is a valuable resource that is of growing economic importance in the digital economy. Although an EU-level regulatory framework exists for personal data, no such framework exists for non-personal data.

24.10The Commission’s Communication on Building a European Data Economy has identified four thematic areas of concern in this policy area:

24.11The Committee’s report of 8 March 2017 concluded that the Communication was politically important because it provided a strong indication of the Commission’s wide-ranging thinking in relation to future regulation of the data economy, and considered that the development of the EU acquis in relation to the data economy was likely to have significant implications for UK businesses post-exit.

24.12The Committee raised techUK’s concerns that EU action on data localisation, while liberalising the flow of data within the EU could, simultaneously introduce EU-level data localisation requirements for service providers from third countries, in order to require digital businesses to relocate part of their operations to the EU and asked the Minister to respond to this point.

24.13In response, the Minister wrote that:

“The Communication, which sits under the umbrella of the Digital Single Market strategy, neither completely dispels nor confirms these concerns on geographic applicability. The view of the Commission and Member States on this issue should become clearer as they discuss the evidence gathered in the public consultation.

“The EU recently reiterated support for the free flow of data across global borders subject to the appropriate safeguards, as this is how data markets operate. Accordingly, any measures to facilitate data sharing should not unnecessarily restrict data flows to within the EU. It is in the best interests of both the UK and the EU to ensure that any action the Commission proposes allows for data storage and transfers to and from third countries, and reflects the new safeguards for the transfer of personal data, set out in the General Data Protection Regulations (GDPR).”

24.14The Minister also said that the Government would provide the Committee with a copy of the Government’s response to the EU consultation in due course.

The Government’s response to the consultation

24.15The Government has now responded to the Commission’s public consultation on its Communication, Building a European Data Economy.

24.16Regarding data localisation, the consultation response states that:

24.17On the subject of ‘emerging issues’, the Government’s response to the consultation states that:

Previous Committee Reports

Fortieth Report HC 71–xxxvii (2016–17) chapter 12 (25 April 2017); Thirty-fourth Report HC 71–xxxii (2016–17), chapter 4 (8 March 2017).





28 November 2017