Header Ads

Europe's data demands

Fully Charged
Bloomberg

Hey all, it's Natalia in Brussels. While the U.S. gears up for the most contentious presidential election in memory, the European Union is facing a different kind of political maelstrom. British Prime Minister Boris Johnson theatrically threatened to walk out of Brexit trade negotiations earlier this month, before agreeing to a resumption last week. Now, the talks have been extended until mid-November as the two sides race to preserve relatively free trade between the U.K. and EU ahead of Dec. 31, when Britain leaves the bloc's single market.

It's not just the flow of goods that will be impacted by Britain's exit. The move could also have a major impact on the flow of data.

Around the world, companies have been able to expand their global footprints in part by transporting troves of customer data, like payroll information or business contracts, internationally. That's especially important for smaller countries, like the U.K., who hope to serve billions of customers outside their borders. 

Now, such transfers are increasingly under threat in Europe. In a landmark decision in July, EU judges overturned the primary system to move data from Europe to the U.S., called Privacy Shield, on concerns that users' information is unsafe from American intelligence services. 

That ruling, which could hamstring U.S. companies, will also be relevant to the U.K. as a deadline for a trade deal with the EU nears. If the EU fails to reach a decision about the UK's data protection regime by the end of the year, British firms will find themselves in the same situation as American companies now do.

That's not a great spot to be. Companies transferring data to the U.S. using "contractual clauses"—one of the few options remaining—now have to implement extra privacy measures, such as encryption or pledges to challenge legal requests for access to customer information. And if companies or regulators deem that customer data is unsafe at its destination, they may suspend those transfers altogether.

Some tech companies argue social media giants like Facebook Inc. may be especially at risk because they handle information that could be of particular interest to U.S. security forces. The ruling prompted the Irish privacy watchdog to warn Facebook, the original defendant in the court case, that it may have to stop transferring data to the U.S. using those clauses. The company is currently challenging the decision.

Business-to-business companies, on the other hand, could be relatively less affected, some argue. "You can imagine that there's a difference between industrial data and social media data," said Aaron Cooper, vice president of global policy at BSA, a trade group that represents companies including Microsoft Corp. and Oracle Corp. That should inform what extra privacy protections such firms have to incorporate, he said.

But other companies aren't off the hook. "Even if you're not directly a tech platform, you're sharing data or having data processed by a tech platform," said Omer Tene, chief knowledge officer at the International Association of Privacy Professionals. "That makes this problem much broader than just Facebook or Google."

Technology companies may imagine themselves to be outside the reach of politics, but 2020 has proven they're anything but. Natalia Drozdiak

If you read one thing

Jack Ma's fintech giant is headed for the world's biggest initial public offering. Ma's Ant Group isset to raise $34.5 billion in a record-breaking IPO when it lists its shares in Shanghai and Hong Kong, Bloomberg reports. The company will have a market value of about $315 billion, based on filings Monday. That's more than the gross domestic product of Egypt, Chile or Finland, and outstrips the market cap of JPMorgan Chase, the biggest bank in the U.S. 

And here's what you need to know in global technology news

Apple is planning updates to its AirPods earbuds next year, including a second version of the AirPods Pro. 

Indonesian online mall Tokopedia is getting a $350 million investment from Google and Temasek. 

Twilio said it would lose money this quarter as it revs up expansion to meet consumer demand for communications software. The stock was mostly flat in after-hours trading on Monday, but has tripled so far this year. 

Shares of German software giant SAP sank as much as 21% after the company cut its revenue forecast for 2020, citing lockdowns. 

Twitter is trying to preemptively debunk—or "pre-bunk"—voting misinformation, NBC reported

 

Like Fully Charged? | Get unlimited access to Bloomberg.com, where you'll find trusted, data-based journalism in 120 countries around the world and expert analysis from exclusive daily newsletters.

 

No comments