The UK Confederation of British Industry (CBI), the UK's largest business lobbying group,
to the Ministry of Justice's Call for Evidence on the draft EU Data Protection Regulation on 16 March, stating the regulation will threaten many innovative business models and place a compliance cost burden on businesses, which may deter investment and be passed on to consumers.
The CBI is calling upon the European Commission (EC) to revise its proposals in favour of a proportionate, risk-based approach to the scope of data protection regulation, taking into account the benefits versus the costs of any changes and their impact on innovative business models.
“We’re concerned that the EC’s proposed data protection reforms will put European businesses at a competitive disadvantage in a global market by placing restrictive controls and high cost-burdens on innovation and investment,” said CBI Director for Competitive Markets Matthew Fell.
“Many novel business models rely on data-sharing to generate revenue and offer a more individually tailored user experience. Advertising and subscription-based online music sharing services are a good example where we’ve recently seen groundbreaking innovation through partnerships with social networking sites. Sharing information about music likes and dislikes online, without sharing the actual content, means millions more customers can now enjoy listening to music online legally—a lifeline for the flagging music industry" continued Fell.
The CBI also identified the EC as having overestimated the financial benefits to businesses of the proposed regulation and underestimating compliance costs. In particular, it specified the associated costs in changing current IT systems, retraining staff and reissuing customer terms and conditions. It estimated that equipping a call centre to handle issues arising from the changes alone could cost around £100,000.
The CBI identified the requirement to appoint a data protection officer over a two-year period as a potential business cost of between £30,000 and £75,000 per year and expanding the role of the UK Information Commissioner's Office (ICO) to process the additional data protection work as placing an additional cost burden on UK tax payers.
