Data Protection Regulation: Back On Track?

by Dentons

The Council of the EU has been busy discussing the draft Regulation this week.  There is a press release and press conference to go with it.  So what’s new?

Territorial scope

There seems to be broad agreement on this.  Viviane Reding, the EU Commissioner responsible, says that it’s a core requirement to “create a level playing field between European and non-European businesses.  All companies that want to utilise the internal market have to apply the European law”.  She says this is of “utmost importance”.

So, no change on the plans for extra-territorial effect.   US and global businesses beware!

International data transfers

Again, there seems to be broad agreement on the key principles contained in the draft Regulation.  But Ministers agreed that more technical work needs to be done (no details provided) and that the question of “alternative models for international data transfer” needs to be studied in-depth.

This may be a tacit acknowledgment that the existing solutions are far from perfect. This is true. However we have a long way to go before we can achieve truly “interoperable data privacy laws” as between different parts of the globe or, for that matter, reliable privacy seals.

Big data

Many businesses are starting to look at profiling customers to learn more about them and target more products to them.  Viviane Reding says that progress has been made on this.  There have been suggestions that profiling is to be prohibited without the consent of the citizen.  However she says, very clearly, that profiling is only prohibited if “hurts the citizen”.  So safeguards must apply.  Very significantly, she says that this should not interfere with a business’s ability to innovate.  She recognises that there has to be a balance between business development and new business models.

This is a signal, contrary to what we heard last year, that big data is not dead!  This is good news for businesses in all sectors who want to apply an algorithm to large volumes of data to spot patterns or trends and enable them to offer better, more personalised and effective services. We have yet to see the text on this though.

Regulation or Directive? 

The UK and some other member states believe that the new law should be in the form of a Directive (with local implementation required at member state level) rather than a Regulation.  Regulations are directly applicable and apply on an EU-wide basis.  Viviane Reding says “I like regulations because they are efficient and they make the same rules for the whole continent”.  She was actually talking about cross-border debt recovery but the principle is clear.

So there is no likelihood of a switch to a Directive from the EU Commission.

Consumer focus

Reding also believes that the new Regulation is about giving choice to consumers.  And choice, she says, drives competition.  Interestingly, she referred to her role in implementing telephone number portability (the right to port your telephone number from one service provider to another).  She says that we will now do the same with portability of personal data.  Clearly, the Regulation is about advancing the consumer agenda.  No change here but an interesting allusion to number portability and where Viviane Reding is coming from on this.


The Greeks currently hold the revolving 6 month Presidency of the Council of the EU and Reding says that “hibernation is over and the Greek spring is … [here] …”.  She has confirmed that the plan is still to have everything done and dusted by the end of 2014 and is pleased that the latest discussions have moved from a more “abstract” way of looking at things to the very “concrete elements” which, she admits, include “very political elements”.  I assume this means that the “one-stop-shop” conundrum is still unresolved.  This was the legal disagreement towards the end of last year as to whether it would prejudice a citizen’s human rights by having to make a complaint to a data privacy regulator in another country where that regulator had assumed responsibility for privacy compliance by the relevant company. Good for business; perhaps less good for citizens.

What did the Greeks say?

Mr Athanassiou (Minister for Justice for the Greek Presidency) provided some encouraging words that we might be able to reach “definitive agreements on some subjects” and that there has been much discussion on the Regulation.  He admits, however, that “much remains to be done” but that they will put every effort into ensuring that progress can be made.

What next?

The soap opera continues.  There is no doubt that Viviane Reding wants this to go through on the new timetable. The European Parliament will vote on this next week in plenary session.  After that, the Council will meet again in June for the final negotiations between the EU institutions with a view to finalising the reform by the end of 2014.  That’s the plan anyway…

A final thought …

Have a look at the opening and closing shots from the press conference.  There is hardly a journalist in sight!  I hope that’s just because they were watching the webcast instead.  We certainly need to get debate down to the granular level if we stand any chance of finalising this Regulation in workable format.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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