The lack of clear data protection rules threatens digital business in Slovakia and the EU
At the global as well as regional level, the issue of digitization, digital transformation, cyber security, GDPR as well as the topic of personal data protection are increasingly coming to the fore. Covid-19 has shown that the digital economy is a relevant part of our lives, on which businesses and customers in Slovakia have become financially dependent. The Covid-19 pandemic has reinforced the need for the rapid development of digital infrastructure as well as related legislation at national and European level. The dependence of companies and customers is thus increasing from the functioning of the digital environment, and it is therefore essential that clear rules are set in the area of data transfer as well.
At the event of the American Chamber of Commerce in the Slovak Republic and SAPIE, the essence of data transfer was discussed today, why it is important for entrepreneurs and how its regulation will affect business in the digital space. The aim of the event was to draw attention to the ruling of the Court of Justice of the European Union in July 2020, which put the EU and the US as two key economic partners in an awkward situation, as the whole situation is complicated mainly by different legal mechanisms. In addition, experts say that the global Internet is becoming more and more fragmented at the borders of the regions, thus providing space for global competitors from Asia.
Today, the digital economy is governed by data transfer, regardless of national borders. However, the ongoing negotiations between the EU and the US aim to establish imaginary regulation and create boundaries for companies to protect consumers' personal data. Companies that now have their business model based on data transfer from the EU are looking for ways to replace the currently defunct European-American Privacy Shield, which originally regulated data transfer and is waiting for new conditions.
“The United States and the European Union are natural allies in trade relations as well as in digital politics. The standards that we set together will be copied and taken over by the whole world. I believe that the current US administration will be more inclined to cooperate in this important area as well as before.
In particular, the technology companies that make money from user data must be aware of their responsibility and their regulation will be the subject of further agreements and negotiations.”
Due to external conditions, small and medium-sized enterprises in Slovakia, but also throughout the EU, are intensifying the transition to a new digital business model in order to expand their offer to more markets. The current ambiguity of the method of data transfer causes a direct impact on more than 5,000 companies with an indirect impact on many companies, as the services of technology companies, financial institutions, healthcare companies or sales of basic products and training are used in Slovakia and across the EU by tens of thousands of companies. . Suspending data transfers through trade restrictions would mean a downturn in the economy of around € 2 trillion by the end of this decade and a loss of around 1.3 million jobs.
“Following the recent ruling of the European Court of Justice by Schrems II, companies wishing to transfer data to third countries must carry out an extensive survey . Thus, they must conduct an extensive survey of local laws in these countries (not only in the US, but in almost all countries outside the EEA). From my own experience, I can confirm that such a survey lasts 1-2 months and is extremely costly. It is practically impossible for SMEs to carry out such a survey.”
“Slovakia is a small economy, similar to the V4 and Baltic economies. In order to consolidate the part of the important economy made up of small and medium-sized enterprises, I believe that it is important for Slovakia to take an active part in the debate at European level and try to find a viable solution. Otherwise, it risks paying passively on decisions that depend on the chances of recovering from the coronavirus economic crisis as quickly as possible.”
As the volume of data grows and continues to do so, it is essential that the US-EU digital trade negotiations be held at the relevant meetings of the Council of the European Commission and that Member States form a coalition to promote EU-US data flows, as transatlantic flows significantly affect the functioning of the European economy and affect people's daily lives.
