24th Oct 2016

Confusion over EU data bill costs

  • The European Commission says the data regulation will cut administrative costs and save industry billions (Photo: bourgeoisbee)

Those who support the EU's proposed data protection bill and those who oppose it are putting forward vastly different figures on the cost of the new law.

"It's been a massaging of the numbers on both sides," Chris Pounder, the director of the UK-based legal training company Amberhawk, told this website.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

"This cost argument needs to be bottomed out," he added.

The European commission’s January 2012 report says the fragmented nature of current EU data protection directive creates annual administrative costs of some €3 billion.

Member states base their national data protection rules on the old directive. But divergent national rules and enforcement creates legal confusion whenever data is litigated across borders.

The new regulation proposes to bring all the rules on data protection under one umbrella and to have them applied uniformly across the Union.

The commission says the exercise would save industry €2.3 billion annually.

"The savings were mainly calculated on the basis of the costs that are incurred today by having 27 national and different rules instead of one single rule," EU spokeswoman Mina Andreeva said in an email.

She pointed out that the commission's impact assessments have to pass an independent impact assessment board.

Hewlett Packard, an IT firm which employs over 320,000 people worldwide, agrees that the commission's push to create a more simple EU-wide law will save it money.

"Having better harmonisation and having clear rules will generate some cost benefit," said Daniel Pradelles, a senior Hewlett Packard privacy officer.

Other big companies take a similar line.

But some also express concerns that heavy-handed regulation will drive innovation away from Europe.

An insider at the Swedish-based mobile company Eriksson says compliance costs are not the most important issue when it comes to the long term implications of the new regulation.

Instead it is the potentially lengthy time-to-market path for new products.

Such delays will drive up costs and make companies in the EU move their innovation investment outside the European Union, said the Eriksson contact.

For their part, euro-deputies in the civil liberties committee, which is examining the proposal, have not questioned the commission’s figure.

But others - like the UK government, the French postal service and the pro-business American Chamber of Commerce in Brussels - have done so.

They argue the regulation will bring in additional expenses and not the savings touted by the commission.

Allain Barrault, national secretary of the Paris-based CFDT trade union, said in a one page letter addressed to the European Parliament in April that "the direct marketing sector would be losing €1.25 billion and 25,000 jobs."

The American Chamber of Commerce in its report released in March says the regulation could slash up to 1.3 percent off the EU's GDP and that EU services exports to the United States would drop by 6.7 percent due to loss of competitiveness.

The regulation, it says, would cost each household in the EU up to €3,500.

Meanwhile, the UK, which has opposed the EU’s regulation from the outset, says British industry stands to lose between £100 million (€118m) and £360 million (€425m) a year.

"The two [UK and commission] numbers don't agree. That needs an explanation,” says Amberhawk's Pounder.

Pounder, who analysed the UK report, says they stretched the figures over a 10-year period.

"I’m sure they stretched the numbers over 10 years because 10 times a small number is a big number,” he noted.

The parliament’s civil liberties committee is currently going through some 4,000 amendments on the heavily-lobbied bill before they put it to a vote in June or July.

The committee’s secretariat told this website that it was not aware of any other member state, aside from the UK, that has conducted an impact assessment report.

The EU draft regulation aims to make it easier for people to control their personal data.

But the UK government estimates the commission’s proposal would prompt more people to ask to access their data and so add an annual administrative expense of around £30 million to the industry.


Europe ready to tackle Greek debt relief

The Greek government has built and broadened alliances in EU institutions and member-states that acknowledge the need to restructure the debt and deliver another economic model for the eurozone.

News in Brief

  1. Canada and Wallonia end talks without Ceta deal
  2. Juncker hopes for Canada accord in 'next few days'
  3. Romania drops opposition to Ceta
  4. Difficulties remain on Ceta deal, says Walloon leader
  5. Brexit could lead to 'some civil unrest' in Northern Ireland
  6. ECB holds rates and continues quantitive easing programme
  7. Support for Danish People's Party drops, poll
  8. Spain's highest court overturns Catalan ban on bullfighting

Stakeholders' Highlights

  1. EFADraft Bill for a 2nd Scottish Independence Referendum
  2. UNICEFCalls on European Council to Address Plight of Refugee and Migrant Children
  3. ECTAJoin us on 9-10 November in Brussels and Discover the new EU Digital Landscape
  4. Access NowCan you Hear me now? Verizon’s Opportunity to Stand for Global Users
  5. Belgrade Security ForumMeaningful Dialogue Missing Not Only in the Balkans, but Throughout Europe
  6. EASPDJoin the Trip! 20 Years on the Road. Conference & Photo Exhibition on 19-21 October
  7. EuropecheEU Fishing Sector Celebrates Sustainably Sourced Seafood in EU Parliament
  8. World VisionWomen and Girls Urge EU Leadership to Help end Gender-based Violence
  9. Dialogue PlatformIs Jihadism Blind Spot of Western Intellectuals ? Wednesday 26 October
  10. Belgrade Security ForumGet the Latest News and Updates on the Belgrade Security Forum @BelSecForum
  11. Crowdsourcing Week EuropeMaster Crowdsourcing, Crowdfunding and Innovation! Conference 21 November - 10% Discount Code CSWEU16
  12. EJCEU Parliament's Roadmap for Relations with Iran a Massive Missed Opportunity