Shortcomings of the EU proposal for free flow of data
On 19 September 2017, the European Commission published a proposal for a new regulation prohibiting mandatory localisation requirements for non-personal data in the EU.1 The importance of this proposal to achieving a competitive data economy in Europe is reflected by the member states’ decision to prioritise it for legislation. On 19 December 2017, the European Council published a revised text of the proposal2 and decided on a mandate to begin negotiations with the European Parliament as soon as possible.
Despite the significance attached to it, there are a number of shortcomings to this legislative initiative. First, the Commission has failed to make a convincing case for legislating on the free flow of non-personal data in the EU. The key premise underpinning the draft regulation is that mandatory data localisation restrictions are unduly hindering cross-border data flows at a significant cost to the information and communications industry (ICT) sector and wider European economy. The Commission has failed, however, to adequately identify the nature and scale of this problem in its impact assessment of the regulation.
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