Road to Brexit: the UK seeks early agreement on Data Privacy with the EU

British and European flags in front of the Berlaymont building (Copyright European Union, 2016 / Source: EC – Audiovisual Service/ Photo: Lieven Creemers).

Last Thursday, the Government of the United Kingdom openly said it wants to co-operate with the European Union over data protection, in a bid to ensure the free flow of data across borders after it leaves. Despite the complete departure of Britain from the bloc will only happen in two years time, the Government has issued an official policy paper, entitled “The exchange and protection of personal data”, with the open ambition to secure an early data-sharing partnership with Europe – and protect the digital economy – once Brexit comes into effect.

Background

The flow of personal data and, more in general, data protection of individuals in the European Union is currently regulated by the Data protection directive (officially Directive 95/46/EC), from 1995. The European Commission and the Council of the European Union now intend to strengthen and unify data protection for all citizens in the European Union by implementing the General Data Protection Regulation (GDPR) – (Regulation (EU) 2016/679). The GDPR was adopted by the EU28 on April 27, 2016 and it will come into force from the 25th of May 2018, after a two-year transition period.

The GDPR does not require any enabling legislation to be passed by national governments and so it will automatically become directly binding for all Member States. Clearly, the situation will be a bit more difficult for the UK, as it will leave the European Union just one year after the regulation will come alive. Thus, Britain is now determined to move quickly to underpin its digital economy and last week the Government made clear it is open to co-operate with the EU over data protection to have its rules accepted by the bloc before Brexit will come into effect.

Official policy paper

So the UK’s Department for Exiting the European Union published an ambitious policy paper on Thursday where it underlined its “unique” status as a leading player in the e-commerce industry as a base to demand special treatment from the EU when agreeing future standards. “As the UK and the EU build a new, deep and special partnership, it is essential that we agree a UK-EU model for protecting and exchanging personal data which allows free flows of data to continue between the EU and UK”, the Government said in its paper. “This should reflect the unprecedented alignment between British and European law and recognises the high data protection standards that will be in place at the point of exit”, last Thursday’s paper also said.

Clear intentions

In essence, the document unveils No 10’s clear position that a UK-EU model for exchanging and protecting data will be crucial to maintain a “deep and special partnership”, as specified in the paper. The Government said that regulatory cooperation between the UK and the EU on a range of issues will be “essential”. “When the UK leaves the EU, it is essential that we avoid regulatory uncertainty for businesses and public authorities in the UK, EEA, and EU adequate countries who currently enjoy an ability to transfer data freely”, the paper said. Matt Hancock, the UK’s Minister for digital, said: “The paper published today sets out how we think our data relationship should continue. Our goal is to combine strong privacy rules with a relationship that allows flexibility, to give consumers and businesses certainty in their use of data”.

The EU’s role

The EU, for its part, will clearly have to consider whether the UK’s proposal meets what it considers to be adequate levels of data protection before it will seal a data-sharing deal once Brexit comes into effect. The document published last week by Britain’s Department for Exiting the EU says that the UK’s data protection law “fully implements the EU framework”, and that there will be no change “at the point of our exit from the EU”.

To date, the European Commission has granted 12 adequacy model decisions under the existing 1995 Directive, including Argentina, Canada, Israel the USA and Switzerland. “In light of the UK’s unprecedented position, the future deep and special partnership between the UK and the EU could productively build on the existing adequacy model”, said the UK’s Government in its paper last week.

Potential risks

However, the situation could be a bit more complex than this. There will be the need to have a shared policy process signed by both sides, plus the UK will risk to remain out of agreements such as the EU-US Privacy Shield once it will lose its member status. This are all things that may take a lot of time to be shaped, and may cause a few issues to the UK’s digital economy sector. The Financial Times last week quoted Tom Thackray, innovation director at the Confederation of British Industry, as saying that the document represents “a step forward”, but also that the UK’s data economy could be “at risk of isolation” in case no transition deal is agreed in time.

Big industry

Digital economy in Britain was worth 118.4 billion pounds ($151.5 billion) in 2015. The European Commission has estimated the value of the EU data economy to be worth €272 billion in 2015, or around two per cent of EU GDP. External estimates suggest that its value could rise to €643 billion by 2020, more than three per cent of GDP, while the Confederation for British Industry said Britain’s data economy it has a potential future worth of £240 billion.

Last Thursday’s paper is the latest in a series of documents set out by the UK’s Government outlining its aims in Brexit negotiations, and it came right before UK negotiators headed to Brussels for the next round of exit talks that is taking place this week.