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On the Road to a Transatlantic Digital Marketplace
Atlantic Council / June 13, 2015

By Larry Luxner

A former Swedish Prime Minister, top Polish and British lawmakers, executives of Facebook and Google, and the head of a Washington-based IT industry group gathered June 13 in Wrocław, Poland, to debate the future of the transatlantic digital marketplace.

At issue: how can the United States and the 28-member European Union forge a truly open, digitized market—one in which transactions move without regard to borders, but in which data is protected no matter where it flows.

“The Digital Single Market (DSM) is a necessity not only for Western Europe, but for the EU as a whole,” said Agata Waclawik-Wejman, Google’s Head of Public Policy for Central and Eastern Europe, speaking at the Atlantic Council’s Wrocław Global Forum 2015. “No region understands this better than Central and Eastern Europe—eleven small, fragmented countries that clearly understand the benefits of removing barriers to trade.”

Joining Waclawik-Wejman on the podium were Robert Atkinson, President of the Information Technology and Innovation Foundation; Carl Bildt, former Prime Minister and Foreign Minister of Sweden; Michał Jan Boni, Member of the European Parliament; Erika Mann, Managing Director of Facebook’s Public Policy office in Brussels; and Baroness Lucy Neville-Rolfe, Parliamentary Undersecretary of State at the UK’s Department of Business, Innovation, and Skills, and Minister for Intellectual Property.

Moderating the discussion was Wawrzyniec Smoczyński, Managing Director of Polityka Insight, an online daily news digest that analyzes Polish politics. Among other things, Smoczyński noted that Poles are the world’s biggest illegal downloaders of the Netflix TV drama “House of Cards”—and that ordering anything via Amazon.com generally costs twice as much from Germany as from Portugal.

Boni said this is one reason the EU must create better conditions for data processing, and better privacy protection.

“We need regulation on data protection—one law for Europe, not twenty-eight. It will be easier to link businesses under those conditions,” said Boni, citing a recent study showing that 70 percent of Europeans fear the unauthorized use of their private data.

He also urged EU members to “finalize our work with the US on the Safe Harbor agreement,” which would let US companies transfer a variety of personal data—ranging from IP addresses to personnel files—without violating EU data protection laws.

“We understand the role of privacy protection in the new digital economy. We need this kind of trust,” said Boni, who since November 2011 has served as Poland’s Minister of Administration and Digitization. But he also cautioned against over-regulation.

“Technology is growing and changing faster than legislation,” he said. “Trust is needed on two levels: the first, in relations between citizens and the authorities, and secondly, relations between consumers and companies. If we understand that the future economy will be based on processing data, we should start discussions on how to share that data, not only how to protect data.”

Atkinson suggested that productivity growth in Europe has been so anemic in recent years “largely because of reduced ICT [information and communications technology] use” compared to the United States.

“US enterprises use significantly more and get more benefits than Europeans do for every dollar they spend on ICT. But the DSM undervalues the growth engine coming from digital firms,” he said. “It focuses more on how to create the next Google. The right question is how do we get everybody in Europe to use Google and Facebook? That’s where the big growth will come from.”

Yet security is becoming a huge issue, particularly in light of recent massive data breaches that have grabbed headlines on both sides of the Atlantic.

“We need to invest far more in the network security and data integrity, but these investments are fairly minor,” said Bildt, who served as Sweden’s Prime Minister from 1991 to 1994, and as Minister of Foreign Affairs from 2016 to 2014. “Compare it with the global air transport infrastructure. We invested massively in security and have made that extremely vulnerable infrastructure secure. It was expensive but it’s worth it.”

Bildt added: “The Russians and Chinese have introduced information security and want to make that a global standard. They don’t like the free flow of information. They want to have a controlled flow of information, and they want that enshrined in international treaties. They say the Internet is being run by the US government and the CIA, and that they need to do something different. If we don’t take that argument away from them, there’s a risk of us starting to lose that battle. So we need to be more aware of the risks, and more assertive in our policies.”

On June 12, the day before the conference, the US Federal Communications Commission officially adopted net neutrality rules that effectively make the Internet a public utility and an open-access network. Atkinson blasted the ruling—which is being challenged by Internet service providers like AT&T and Verizon—as a loss for society in the long run.

“Net neutrality is one of the most demagogued issues in digital policies, and there’s so much misinformation,” he argued. “What we ended up doing in the US is exactly the wrong thing to do. No one should be able to block Google.”

Added Bildt: “From society’s point of view, some things need to be given priority. Philosophically, we should go as far as we can on net neutrality, but be aware that with the Internet, there must be some priorities when there is congestion.”

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