In interviewing Irish Data Protection Minister Dara Murphy here at the IAPP Global Privacy Summit, IAPP VP of Research and Education Omer Tene asked a pointed question: Given that the vast majority of the large internet firms are American, “Would you say that the European digital market strategy has failed?”
“I would,” said Murphy, “but I don’t think it continues to fail. Historically, we have fallen behind … [because] … there are certain things that we do in Europe that limit our development — geoblocking, copyright laws, VAT. If you want to trade digitally in all of our member states, you have 27 different VAT regimes across the EU. It’s extremely hard.”
But, countered Tene, the American companies seem to navigate the European landscape without too much of a problem.
Sure, said Murphy, “because those are big companies. Where the EU Digital Single Market hasn’t evolved is in the SMEs, the mid-sized companies, because we have to an extent a single market, but not a properly functioning one. If you open a business in Ireland and you’re digitally exporting, it costs you 5,000 euro to trade into the U.K., France, and Germany. That’s 15,000 gone. Now add the same cost for every other country.”
“There’s a far greater fear of failure in Europe. In America it’s a badge of honor. Each time you fail you’re more worthy and impressive.” — Dara Murphy, T.D. Minister of State for EU Affairs, EU Digital Single Market, Data Protection at Departments of the Taoiseach; Foreign Affairs & Justice
Murphy also mentioned the greater access to venture capital in the United States and the cultural differences as well. “There’s a far greater fear of failure in Europe,” he noted. “In America it’s a badge of honor. Each time you fail you’re more worthy and impressive.”
What about data protection, Tene asked. Does that inhibit EU companies?
“I would have to say it’s a small part,” said Murphy. “I was on the West Coast in the U.S. in January with a large American company and I met with their board and one of their VPs said, ‘We have never trialed a product in the EU because it’s too difficult. So we trial elsewhere, and if it works, we sell it into Europe and engage.'”
“There may be a view that because EU standards are so high it’s just easier to apply those rules globally,” he noted, “so one might be able to take the view that EU views are spread out across the planet, and that’s a good thing, but we have to make sure that’s workable and achievable. We have to make sure we don’t have an ecosystem in Europe that discourages innovation.”
That data protection barrier to entry is also cultural, said Murphy, and it’s important to understand its underpinnings. “There are a dozen states, 20 years ago, within the lives of everyone in this room, that were occupied by the Soviet Union,” he said, “and they had no privacy, no democratic rights at all. Certainly, in parts of Western Europe — and we shouldn’t really call it that anymore — we do take certain democratic values for granted. … Certainly for some EU countries they still hold some of those fundamental benefits of democracy exceptionally dearly. When your neighbor is Russia, and they’re conducting military exercises within the sight of your citizens, and you’re not a big country like Germany, you look at privacy in a different way.”
The best way to counter that, Murphy said, is to turn the conversation on privacy around. “Too often we talk about ‘protecting,’ and ‘explicit,’ and ‘consent,’ and so on,” he said. “But we need to talk about how data can help our health services, our security services, our smart cities, how data can work with local authorities. And let’s not always be talking about whether Big Brother is spying on you through the refuse bin. That’s why this conference is so important, to have these dialogs on an ongoing basis.”
Further, he held up the Privacy Shield framework and the negotiations that created it as an example for the world as a whole. “While there are differences between the U.S. and the EU, it has worked. And, by the way, they couldn’t have said, ‘There’s no agreement.’ It’s inconceivable. … But if Europe and America can agree on global standards, that’s a great example to the rest of the world.”
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