Mon, Oct 26, 2015 - Page 14 News List

Fears over ‘digital protectionism’ grow

‘THE RIGHT PATH’:Brussels is eyeing a digital single market by simplifying rules for cross-border operations, which could include new legislation for online platforms


As US tech giants extend their global reach, fears are growing on their side of the Atlantic Ocean over trade barriers some see as “digital protectionism.”

While China has long been a difficult market for US firms to navigate, tensions have been rising with the EU on privacy, antitrust and other issues, impacting tech firms such as Google Inc, Facebook Inc and Uber Technologies Inc.

In recent weeks, Europe’s highest court struck down an agreement which allowed US firms to transfer personal data out of the region without running afoul of privacy rules. In parallel, Brussels is looking to create a new “digital single market” simplifying rules for operating across EU borders, but which could also include new regulations for online “platforms.”

Some see this as a jab at US retailers like Inc, “sharing economy” services like Airbnb Inc or even news outfits.

Computer and Communications Industry Association president Ed Black said the platform proposal “has the potential to be troublesome.”

“Nobody has defined what a platform is,” Black said. “It feels like a proposal to solve a non-problem.”

After the European Court of Justice invalidated the so-called “Safe Harbor” data-sharing agreement this month, US Secretary of Commerce Penny Pritzker said Washington was “deeply disappointed.”

For the past 15 years, the key transatlantic accord allowed tech firms like Facebook to operate on both sides of the ocean without running afoul of EU privacy laws.

The ruling, Pritzker said, “creates significant uncertainty for both US and EU companies and consumers, and puts at risk the thriving transatlantic digital economy.”

“We are waiting to see which way Europe goes,” Information Technology & Innovation Foundation vice president Daniel Castro said.

Castro detects “an undercurrent of fear” in Europe because of the popularity of services such as Google and Facebook, but said that the US and EU “need to be on the same side when it comes to free trade.”

Another source of friction is Europe’s effort to enforce the “right to be forgotten,” allowing individuals to remove online content from searches that are outdated or inaccurate.

France has ordered Google to carry this out worldwide, not just in Europe — but US firms see this as a form of censorship, effectively enabling people to rewrite history to hide embarrassing data.

“You are taking about Europe imposing its version of how the world should be on everyone else,” Castro said.

US President Barack Obama expressed concerns about digital trade barriers in an interview earlier this year with Re/code.

“We have owned the Internet. Our companies have created it, expanded it, perfected it in ways that [European firms] cannot compete,” Obama said in response to a question about European actions in the digital sphere. “Oftentimes, what is portrayed as high-minded positions on issues, sometimes is just designed to carve out some of their commercial interests.”

That view was echoed by Kati Suominen, who heads the Future of Trade initiative for the Center for Strategic and International Studies, a think tank.

Europe sees it is lagging and is moving on policies in order “to buy time,” she said.

“Europe is seeking to build its own digital economy by complicating the operations of foreign companies on European soil. In that sense, it is protectionism,” she said.

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