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‘Need to protect info of biz, citizens but we must allow free cross-border data flows’: vice-president, European Commission

In an interview with Indian Express, Ansip spoke about the perils of forceful data localisation and how countries are looking at data protection as a trade issue.

Written by Pranav Mukul | New Delhi | Published: October 29, 2018 4:56:20 am
Data protection, Data localisation, Free flow of data, European Commission, GDPR, Business news, Data Storage payments services, upi based apps, banking news, indian express Andrus Ansip, vice-president of the European Commission and former Prime Minister of Estonia

Invoking George Orwell’s futuristic dystopian novel 1984 to suggest that tackling dissemination of misinformation on social media platforms should be left to the companies and the people, Andrus Ansip, vice-president of the European Commission and former Prime Minister of Estonia, said that government’s regulating information could lead to a ‘Ministry of Truth’ phenomenon. In an interview with Pranav Mukul, Ansip also spoke about the perils of forceful data localisation and how countries are looking at data protection as a trade issue. Excerpts:

What is EU’s stand on data localisation?

Just recently, in Europe we got our General Data Protection Regulation (GDPR). The GDPR says forceful data localisation is prohibited. The trends about data localisation in Europe are not good. We have 56 different rules in 21 EU member states dealing with forceful data localisation. For data economy, it is bad to prohibit free cross-border data flows. If some data is forcefully localised inside some member state, then it would mean that service providers will have to build data centres in all 28 EU member states and it will be too expensive. With our free data flow proposal, we want to prohibit forceful data localisation inside the EU. I’m absolutely sure everybody will benefit from that. We have to protect data of our citizens and businesses but we have to allow free cross-border data flows.

Is the same principle valid globally as well?

Globally, it is a little more complicated. When talking about personal data, we need to see data protection rules in other countries and then decide whether the data in those countries protected at the same level as they are protected in Europe. As a rule, the EU and the country will need to take this decision at the same time.

How much of a trade issue has data protection become?

Data protection is becoming more and more important. According to some sources, just during the last one year, approximately 100 countries around the world got their first ever data protection rules. I don’t think it was just because GDPR, it could also be because of the Cambridge Analytica scandal. Digital trade is everyday becoming more important but we cannot leave data protection to trade agreements. I think people in India will say that we will set our own standards on how to protect data in India and we will never agree if somebody will say that data of Indian people — who move out to some other country — will have to be protected at the same level as it is in India. Same goes for Europeans. They will like to see their data be protected at the same level as in EU when they move to another country. It’s not so easy that we make a deal and agree to level of protection. For us, it cannot be lower than it was set by the GDPR.

Is there a taxation perspective to localisation of data?

Data localisation and taxation are not so much connected but I think many countries around the world are now talking about taxation of digital economy and there is a common principle, which is hundreds of years old – companies have to pay taxes in countries where they generate profits. However, with digital businesses we are seeing that companies are generating profits in countries without having physical presence there. The whole taxation system around the world is based on physical presence of those companies. Some entrepreneurs and governments are unhappy. When some domestic entrepreneur is providing some services on the same business model as a global service provider, then domestic service provider has to pay all the taxes unlike the global company. In that case, how will the local company be able to compete with the global one? It’s about level playing field also. For example, quality media – whether it is print, television, radio – is losing advertising revenue and social media, which is selling behavourial ads have seen their revenues increase. We have to deal with these issues. For the last decades, we got our taxation rules mainly through the OECD and we are waiting for proposals from OECD but we haven’t so far and that’s why the EU launched their own initiatives about taxation of digital economy, which is based on model of virtual presence of companies.

Since you mentioned social media, how should authorities deal with use of these platforms to influence polls?

We are happy with the progress of social media but we have to be worried about somone using social media channels to influence elections. I am really happy that these social media platforms took self-regulatory measures seriously. They are using solutions based on artificial intelligence to weed out fake news and disinformation campaigns. We have to protect our democratic polls and we can do it together with social media platforms.

Is it enough to leave it on the companies to regulate?

When regulations are needed, we have to intervene but I don’t want to have a Minister of Truth in the 21st century to our countries in Europe because in many countries, we have bad memories from those Soviet years and some people know what the Minister of Truth means in real life and to get it back – no way. With strict regulations, we won’t be able to regulate everything. We have to leave some space for common sense. We believe in common sense of our people. As President Abraham Lincoln had said: “You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.” He said it more than a 100 years ago but it’s valid even today. We have to leave space for our people to decide what is right and what is wrong. If some machines or some servants in the ministry of justice have to decide what information is legal and what is illegal, then it can easily turn into censorship. In conditions of democracy, it is totally unacceptable.

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