Why can’t Europe see how important the digital economy is?

Enrique Dans
Apr 30, 2015 · 3 min read

Richard Allan, Facebook’s VP for Public Policy in Europe, writes in an article published in the Financial Times called “European disintegration threatens business on the internet” that growing numbers of companies are simply unable to manage the EU’s complicated regulatory framework, and that this threatens the region’s technological and economic development.

The company’s user privacy management practices are under scrutiny from EU members such as Germany, Belgium, Spain, France, the Netherlands, and Italy, all of which have their own legislation in this regard. Facebook considers that as it is based in Ireland, a country with notably tolerant privacy rules, it should only have to respect that country’s legislation, but now finds that it has to answer to individual states, a situation it says it is finding hard to handle.

Brussels says that the law is the law, and that Facebook, like everybody else, has to obey the norms in the countries where it operates. Ask any European from whichever member state for their opinion on the matter, and they’ll likely answer with something along the lines of: “The laws of my country protect my rights in this way, and whoever wants to offer their products or services in this market has to adapt to them.” But in reality, things are a little more complicated. As Richard Allan comments in his article, a car has to fulfill a series of safety and other norms at the European level, but after that the vehicle can be sold in any member state without problems.

Let’s not forget that one of the aims of the EU is precisely to create a single market with an enabling business environment. But when it comes to services provided by the internet, we soon come up against a harsh reality: the EU doesn’t work, and companies face the impossible task of complying with myriad laws issued by individual member states that sit alongside others issued by European courts, along with directives that each state interprets or obeys as it sees fit.

Not that the EU is unaware of the problem: the much-missed Neelie Kroes fought long and hard while she was in charge of the bloc’s digital agenda; similarly, the EU has also recently issued its digital single market strategy, which is an attempt to address Europe’s chaos of laws, a reflection of a project that has only been carried out in part, and that has become a paradise for lobbies and a nightmare for any company looking to grow in the digital sector.

Facebook has serious questions to answer over its privacy policy, and as Europeans we are probably broadly in agreement that the company has done things that do not belong in a Europe that, reflecting its collective and individual histories, seeks to provide guarantees to its citizens regarding their privacy.

But aside from not being an excuse to create an impenetrable wall that ignores the ways that changes in technology have affected our ability to protect our privacy, if the EU wants to encourage innovation, it should not use the law as an excuse to mire companies down in the legal maze created by 28 member states’ requirements. If Europe wants to remain minimally competitive in the digital environment, it needs to prioritize addressing this issue.

(En español, aquí)

Enrique Dans

On the effects of technology innovation on people, companies and society (writing in Spanish at enriquedans.com since 2003)

Enrique Dans

Written by

Professor of Innovation at IE Business School and blogger at enriquedans.com

Enrique Dans

On the effects of technology innovation on people, companies and society (writing in Spanish at enriquedans.com since 2003)

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