Free Flow of Data: A ‘ferrari for startups?’

March 20, 2018
Flow of Data

If a startup was a car, what would it be? In light of the fragmentation in the digital economy, the racetrack it is on would be curvy and steep one. Yet, if the regulation for free flow of non-personal data passes, Rapporteur Corazza Bildt thinks startups could get a ferrari. 🏎

What’s this about? Currently, countries in Europe are implementing data localisation measures for a wide variety of reasons. In doing so, they oblige storage or processing of data to be localised within a member state. If we scale this, it could mean that startups would have to rent servers in 28 countries to grow across Europe. The trend is negative: the Commission’s own research found that the amount of barriers increased >100% since 2006.

In comes the Commission’s regulation proposal, which wouldn’t just tear down unjustified data borders. It would also preempt new one’s. Just recently, the parliaments lead negotiator presented her take. There’s two reasons why her take could indeed could become a ferrari for startups:

  1. It keeps a narrow scope, only making exemptions for public security, not more. Remember that we’re only talking about non-personal data here.
  2. It clarifies mixed data sets. Where personal and non-personal data can be separated, GDPR and free flow of data apply respectively. If they’re inextricably linked, free flow of non-personal data takes effect.

A focused scope makes sense because there are so many innovative startups looming in all kinds of sectors, from health to transport. And as long as a French startups cannot sell to Germany, it’s hard to speak of a single market at all. The Parliament’s first take on this creates legal certainty rather than opening new questions. Rather than forcing entrepreneurs to find a needle in the haystack before they can get down to business, this draft provides much welcomed clarity. Just like loosening the handbrake in that Ferrari.

This legislation can directly impact the ease of doing business in Europe – a message we drove home when we visited the Parliament in Strasbourg with two amazing entrepreneurs. Both shared their unique stories outlining how data localisation measures unnecessarily slowed down their businesses growth.

Soon the proposal will be discussed in the Parliament. As this regulation speeds down the legislative racetrack, we hope that other stakeholders will also see this proposal as a ferrari for startups and hope that they won’t try to take it’s wheels off.