Two Things That Could Make or Break the European Data Economy

Entrepreneurs released a statement on the European Data Economy.

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Discussing the European Data Economy: MEP Axel Voss, Lenard Koschwitz (Allied for Startups), Valerie Mocker (Nesta), Sabrina Bouguessa (Teads), Dr. Wolfgang Thielemann (Bayer AG)

Entrepreneurs released a statement on the European Data Economy.

Last Monday, Allied for Startups and Silicon Allee hosted an event at Kontist surrounding the highly debated topic of increased legislation on data privacy. The discussion sparked a plethora of opinions on addressing what needs to be put into place to ensure that there are constructive solutions that allow startups in the EU to continue building through the rapidly growing European Data Economy. Julia Neuman deconstructs the discussion here — raising all the important questions and answers that you need to know in a time where data privacy friction is increasing.

Data-driven technologies have ushered in a staggering wave of economic growth across sectors within the EU. Over the last five years, both well-established and emerging industries have undergone rapid transformation through the usage of vast amounts of data. Reports project a significant leap in value of the European Data Economy from almost €300 billion in 2016 to €739 billion in 2020.

Without question, data has become a significant asset to Europe’s economy — a unique fuel for growth whose existence is crucial for maintaining the region’s competitive edge on a global scale. Open access to data is not only a means for businesses to become profitable, but also a stepping stone toward innovation.

Until recently, the many thousands of startups headquartered in Europe have enjoyed relatively flexible regulations when it comes to data. However, with the number of data laws and regulations increasing each year, we’ve arrived at a crossroads. It’s time to examine our current path towards a strong European Data Economy, taking into account factors such as startup innovation, data privacy, data communications and exchange and more.

Entrepreneurs released a statement on the European Data Economy calling for a review of proposed policy. The statement, which can be found here, highlights the concerns and needs of startups in building a flourishing data economy. Effective legislation would help to balance communication and confidentiality with innovation. In order to succeed, startups must be able to text and data mine and be governed by a set of fair ePrivacy laws.

This sentiment was amplified yesterday in Berlin, where policymakers, entrepreneurs and digital experts came together with the goal of aligning on a strategy for the new Data Economy. The event — hosted by Allied for Startups, Silicon Allee and Kontist — included the following panel participants: Axel Voss, Member of the European Parliament; Sabrina Bouguessa, General Counsel at Teads; Dr. Wolfgang Thielemann, Head of Information Retrieval & Analysis at Bayer AG; and moderator Valerie Mocker of Nesta.

As founders, we’ve recognized the need to elevate voices in the startup community to ensure that startups can remain innovative and competitive after future legislation is enacted. This means ensuring startups will have access to data, data mining, room for experimentation and fair liability.

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Impressions from the event, credit Sandro Gianella

Mr. Voss made clear at the event that input from the community on these matters is imperative. “On the European Parliament level, everything you don’t tell us is non-existent — especially with these technical topics,” Voss said. “Legislation is a competition of ideas, and it’s essential that you’re giving us ideas about what you’re thinking on these problems.”

As both a policymaking hub and thriving startup center, Berlin is an ideal setting for fruitful discussion on topics related to the EU Data Economy. Germany’s position as a European economic superpower makes it a litmus test for data-driven innovation; will innovation among startups continue to move forward, or will it drag in the wake of new legislation?

The discussion in Berlin centered on two important areas: ePrivacy and Copyright, which have potential to undercut any enacted data regulation laws that would otherwise help startups. The event in Berlin helped illuminate possible solutions to these concerns.

How can we address the topic of ePrivacy with data?

According to Voss, legislators tend to view data in just two categories: personal and anonymous. As founders and consumers, we know that data is not so black-and-white. As we forge ahead in 2018, e-Privacy becomes an important topic of discussion.

Policymakers seek to regulate not only identifying personal data, but also non-personal data — data that does not have identifying personal information, but based on the sheer amount and extent of it offers huge economic potential. They also seek to regulate data that is communicated between machines, such as IoT devices and sensors.

It’s not hard to see how countless existing and potential business models would suffer from ill data limitations. Rules for personal data protection are strong because their specificity — by applying the same rules to different data sets, legislators cannot effectively balance privacy and security without severely limiting innovation. Startups with small legal teams run the risk of consistent and major privacy hurdles just by continuing business as usual. Raising barriers to the standards of huge businesses would hamper newcomers to enter the market and eventually have dire consequences for the European economy as a whole.

Bouguessa, Head of Legal at video advertising startup Teads, urged policymakers to be patient before making sweeping decisions about ePrivacy and data. “We have to think of data as necessary to access to a service,” she said. “Data is part of business models and a way to build up profitable companies that are offering innovative services to the citizens. [Using it] doesn’t mean that we don’t respect privacy…We have to find a balance between innovation and privacy which is an unquestionable right.”

How should text and data mining be regulated?

The fundamental question regarding proposed copyright legislation is whether or not we give startups access to the data they need to innovate and develop artificial intelligence and machine learning products. New laws may make it impossible to crawl the internet in Europe, which means that any big data application could be rendered useless unless conducted on proprietary data.

Text and data mining is a popular method used by research, startups and large corporations to read and extract data from existing works. Maintaining this openness and data access is key for innovation and the building of new features.

One attendee, a scientist at a world-leading company, brought up an analogy of a CD: purchasing a CD, listening to it and identifying the instruments is a perfectly legal practice. Why should it be any different if a machine is used to identify the sounds instead? “What you pay for, you should be able to analyse,” he said.

Several attendees wondered why such drastic measures must be taken if publishers haven’t demonstrated significant backlash against use of their data. Yet another analogy was mentioned to illustrate the seemingly backwards logic at play. “You can read a book and then create something after. Will the publisher come back and ask for royalties? No. No publisher has sued for text and data mining,” he said.

One representative of a research organization argued that If you’ve lawfully purchased works, read them and draw conclusions from them, you’re not necessarily making a copy of the protected work onto your hard disc. Although there should not be an issue with copyright in this context, current legislation allows language that would rule out text and data mining in this case.

Looking at text and data mining legality in a more general sense, several company representatives stated that the burden of proof shouldn’t suddenly fall on the user. Because there’s such a massive amount of data floating around — often with no identifying information about publishers — data cannot always be traced back to an owner for permissions. “There has to be a basic assumption in place,” one participant said.

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Startups are asking: Will we get the European Data Economy?

The right way forward

The Berlin event offered a platform for differing perspectives and allowed both policymakers, startups and corporations to come forward with their ideal outcomes. Panel moderator Valerie Mocker encouraged constructive discussion by ensuring that every problem up for debate was followed by two proposed solutions.

Thielemann stressed that any hurdle to text and data mining can, long term, be a threat to business. Being cut off from outside data cannot be a viable answer; the needs of industries, big and small, must be balanced — as well as owners of copyrights versus individuals.

“If we do this right, it can benefit everyone,” Thielemann said. “In my view, we as a company should have the right to apply and experiment with text mining on all legally accessible data, experiment with it and identify what’s interesting. If we find something interesting, it will motivate colleagues to read the original document with all the details. This would increase the access to the source and support the business case to continue licensing the source in the future, which both would benefit the publisher”.

A representative of Bitkom urged for the default to remain open and accessible. “If there’s a rightsholder that doesn’t want to allow [text and data mining], then they can block it,” she said. “To block it altogether for the industry is very dangerous.”

Several common threads came up throughout the event that may serve as springboards for future action: education and participation. In order to reach the best solution for a greater European Data Economy, we must educate necessary stakeholders — namely startups and the general public — about the ways their data is used, and how it impacts greater society and themselves.

This in turn leads to the crucial participation referred to earlier by Mr. Voss; startups, especially, must understand their key role in policymaking. While it’s easy to gloss over big picture regulations as a small team with survival and innovation on the brain, making your voice heard can mean the difference between being challenged by regulatory hurdles versus enjoying smooth sailing through the free use of data.

The event in Berlin ended on an ambitious and positive note, as Mocker called for participants to help bridge the gap between those with technical knowledge about data policy and the rest of the population who will be affected by these laws.

“We need to get better at communication around this topic and telling stories that connect to people’s lives. Otherwise, it remains an abstract topic,” she said. “This is your European Data Economy. Shape it, or someone else will!”

Entrepreneurs released a statement on the European Data Economy.

Eager to learn more about how startups and data policy go hand-in-hand? Allied for Startups is running events like this in a city near you. #dataeconomy #100EuropeanStartups

Silicon Allee

Curated essays from Berlin’s start-up scene.

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