Documents considered by the Committee on 19 December 2017 Contents

6Digital Single Market: Free flow of data

Committee’s assessment

Legally and politically important

Committee’s decision

Not cleared from scrutiny; further information requested

Document details

Proposal for a Regulation of the European Parliament and of the Council on a framework for the free flow of non-personal data in the European Union

Legal base

Article 114 TFEU; ordinary legislative procedure; QMV

Department

Digital, Culture, Media and Sport

Document Number

(39028), 12244/17, COM (17) 495 final

Summary and Committee’s conclusions

6.1On 13 September 2017 the European Commission proposed a regulation to liberalise non-personal data flows within the European Union, by prohibiting data localisation requirements78 (other than on grounds of public security).79 The Government welcomed the Commission’s proposal but also indicated that it would seek further clarification of a wide range of its effects (see Background).80

6.2In its report of 29 November 201781 the Committee asked the Government to provide it with these clarifications when it received them, and expressed concern as to whether the Regulation’s provisions were sufficient to ensure that Member States repealed existing data localisation requirements other than where genuine public security grounds existed. The Committee also asked questions about the proposed regulation’s implications in the context of the UK’s withdrawal from the European Union. The Committee retained the file under scrutiny, and asked for an update by 17 January 2017, or sooner if progress in Council required it.

6.3On 13 December 2017 the Minister of State for Digital at the Department of Digital, Culture, Media and Sport (Matt Hancock MP) wrote to the Committee82 to indicate that the Estonian Presidency intended to seek an “informal [negotiating] mandate” from COREPER (the Committee of Permanent Representatives to the European Union) at its meeting on 20 December, which would enable it to start inter-institutional negotiations with the EP in due course.

6.4The Minister does not provide the Committee with the clarifications that he previously indicated the Government was seeking. He provides limited information about a discussion which took place at Telecommunications Council on 4 December 2017. He indicates that there has been a push among some Member States to increase exemptions from the principle of the free movement of non-personal data flows, raising concerns that the proposal’s liberalising effect will be diminished. He indicates that the Government will continue to support the Commission’s proposal and to resist changes that could weaken its scope and impact.

6.5The compromise text which is likely to form the basis of the mandate became available online on 14 December 2017.83 It proposes new exemptions from the principle of free movement of data for public authorities and also for reasons of public policy of “imperative grounds”. It is not possible to reach a clear assessment of the policy effects of these exemptions and the extent to which they weaken the proposal without further explanation from the Government.

6.6On 15 December 2017 officials provided staff with an internal departmental document which included information that will in due course form the basis of the Government’s response to the Committee’s report on this proposal. The briefing was shared on a confidential basis and so it is not possible to share its contents with the Committee. The document did not provide the clarifications that the Government had previously indicated it was seeking, did not provide a clear account of changes to the original proposal, and did not provide any more detail about how the Government intended to proceed in COREPER.

6.7COREPER proceeding to grant a mandate in these circumstances, without effective scrutiny having taken place, would clearly undermine parliamentary scrutiny of the proposal.

6.8Regardless of the outcome of negotiations in COREPER, the Committee does not support the Government instructing the UK’s permanent representation to support the agreement of an informal mandate on the proposed regulation in COREPER, for the following reasons:

6.9While the scrutiny reserve resolution does not strictly apply to the agreement of an informal negotiating mandate in COREPER, in practice such mandates act as substitutes for general approaches in Ministerial Councilagreements to which the reserve applies. The agreement of informal mandates instead of general approaches therefore means that the scrutiny reserve has no purchase at this important juncture in the legislative process, and will only do so when the Ministerial Council comes to consider the text agreed in trilogue negotiations, by which stage the scope for parliamentary scrutiny to influence the eventual outcome is negligible.85

6.10For the reasons given above, we consider that agreeing a mandate for the proposed regulation in COREPER on 20 December would seriously deprecate parliamentary scrutiny of the proposal. The Estonian Presidency’s desire to reach agreement on this proposal, and the desire of the Member States to hasten the progress of the Digital Single Market, while understandable, do not provide grounds for the Government to disregard parliamentary scrutiny in this manner.

6.11We therefore request that the Government instruct the UK’s Permanent Representation to request in COREPER that the decision be deferred until sufficient scrutiny of the proposed mandate has taken place, and that, instead of an informal mandate, a general approach be agreed in Ministerial Council in due course.

6.12We retain this proposal under scrutiny. We ask for the Minister to provide an update, including answers to the questions in the Committee’s previous chapter on this proposal,86 as well as an account of proceedings in COREPER, by 17 January 2018.

Full details of the documents:

Proposal for a Regulation of the European Parliament and of the Council on a framework for the free flow of non-personal data in the European Union: (39028), 12244/17, COM (17) 495 final.

Background

6.13On 13 September 2017, after repeated delays, the Commission finally adopted its proposal for a Regulation governing the free flow of non-personal data (hereafter ‘the Regulation’).87 The proposed Regulation aims to:

6.14The proposed Regulation would also require Member States to designate a ‘single point of contact’ to deal with issues concerning the application of the Regulation, and would establish a free flow of data comitology committee.

6.15On 12 October 2017, the Minister of State of the Department for Digital, Culture, Media and Sport (Matt Hancock) provided the Committee with an explanatory memorandum in relation to the Commission’s proposal.88 The Minister stated that the Government welcomed the Commission’s proposal, and that it had consistently called for it to tackle unjustified data localisation, which can be anti-competitive, recognising the need for limited exemptions.

6.16The Minister indicated that the Government would seek further clarification in relation to numerous aspects of the proposal, including the following aspects of Article 4 (Free movement of data within the Union):

6.17The Minister also sought clarification regarding the scope of Article 5 (Data availability for competent authorities), including examples of the information that would apply, and the degree to which it would support public authorities seeking to access data held in non-public organisations.

6.18The Minister also sought further clarification of the following aspects of Article 6 (Data porting):

6.19In its report on 29 November 2017,89 the Committee:

6.20The Committee retained the proposal under scrutiny and asked for a response to the above questions, and any further updates on progress in Council, by 17 January 2018, or sooner if progress in Council required it.

Letter from the Minister of 13 December 2017

6.21The Minister of State for Digital (Matthew Hancock MP) writes to inform the Committee that the Estonian Presidency intends to seek to obtain an informal mandate to begin trilogue negotiations with the European Parliament at the 20 December meeting of COREPER.

6.22The Minister informs the Committee that a debate on the proposal took place at the Telecommunications Council on 4 December 2017. He states that there was “general consensus on the importance of the proposal for the digital economy” and said that the discussion focussed on three aspects of the Regulation: scope; inclusion of the public sector data; and provisions governing cross-border data access.

6.23The Minister provides the following information about the discussions which took place on each of these points:

6.24The Minister indicates that the Government has not yet received a copy of the proposed mandate and states that as soon as he receives a copy of that text he will send it to the Committee.

6.25The Minister states that there will be further negotiation of the proposal at working party level, “where we will continue to support the Commission’s proposal and resist changes to the text that could weaken its scope and impact”. This, and the Minister’s previously noted concern about adding further exemptions to the application of the Regulation, is the only information available to the Committee about the Government’s position in advance of COREPER.

6.26The Minister justifies the urgency in granting the Presidency an informal negotiating mandate with reference to the fact that “most Member States, including the UK, highlighted the importance of a speedy adoption of this file, as set out in the conclusions of the October European Council91 which called for the file to be concluded in the first half of next year” and adds that “the digital agenda has been a high priority for the Estonian Presidency”. On this basis, he states that the Presidency “has confirmed its plan to seek to obtain an informal mandate for trilogue at the 20 December meeting of COREPER”.

6.27The Minister, presumably seeking to anticipate and assuage the Committee’s concerns about the scrutiny reserve not applying to the agreement in COREPER, states that “no final decision will be taken on this file without political agreement by Ministers”. This is not particularly reassuring, as the text the Council will eventually vote on will be the outcome of trilogue negotiations between the European Parliament and the Presidency, and the scope for scrutiny to exercise influence at this stage is negligible. The Committee’s greatest scope to exert influence is at the present stage in the legislative process when the Member States agree their position. Ordinarily this agreement would take the form of a General approach in the Ministerial Council, to which the scrutiny reserve would apply.

Draft mandate

6.28On 14 December 2017 Politico Pro published an article92 which stated that the Estonian Presidency had floated a draft compromise text for COREPER, which would form the basis of the mandate proposed for 20 December. The article provides a link to an amended text of the regulation.

6.29According to Politico, the text expands the scope of exceptions from the regulation, which allow governments to require certain data to stay inside their borders. Specific changes that are cited include the provision that data localization measures “should be banned unless they are justified based on the imperative grounds of public security or public policy”. The term “public policy”, the text goes on to say, “covers the protection against a genuine and sufficiently serious threat affecting one of the fundamental interests of society and may include, in particular, issues relating to human dignity, the protection of minors and vulnerable adults”.

6.30According to Politico, the changes are described as aimed at convincing countries including Germany and France to back the Council’s position. Annex 1 of the document summarises all of the changes to the proposal, of which the following are potentially significant:

Previous Committee Reports

Second Report HC 301–ii (2017–19), chapter 4 (29 November 2017).


78 Data localisation requirements oblige data processors to locate data storage and processing facilities on national territory.

79 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 SWD (2017) 2 final.

80 Explanatory memorandum from DCMS (12 October 2017).

81 Second Report HC 301–iii (2017–18), chapter 4 (29 November 2017).

82 Letter from the Minister to the Chairman of the European Scrutiny Committee (13 December 2017).

83 Politico Pro, Estonia floats compromise text on free flow of data (14 December 2017) (paywall).

84 Politico Pro, Estonia floats compromise text on free flow of data (14 December 2017) (paywall).

85 See paragraphs 39 and 44 of our report on Transparency of EU Council decision making (26 May 2016).

86 Second Report HC 301–iii (2017–18), chapter 4 (29 November 2017).

87 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 SWD (2017) 2 final.

88 Explanatory memorandum from the Department of Digital, Culture, Media and Sport (12 October 2017).

89 Second Report HC 301–iii (2017–18), chapter 4 (29 November 2017).

90 See Paragraph 4.14 of Second Report HC 301–iii (2017–18), chapter 4 (29 November 2017).

91 European Council conclusions (19 October 2017).

92 Politico Pro, Estonia floats compromise text on free flow of data (14 December 2017) (paywall).




22 December 2017