The European Commission put forward some comprehensive reform to data protection laws on Wednesday that could have profound implications for telcos.
The EC is recommending a wide range of proposals that will form a single set of rules valid for all 27 member states if approved.
There are perhaps three key ones for telcos. Accountability shifts to those who process personal data so that, for example, companies could be obliged to notify authorities of serious data breaches within 24 hours.
Consumers should be allowed to have easier access to their own data, be able to transfer it from one service provider to another more easily and be able to delete their data.
In addition, the EC wants its rules to be applied even if data is handled abroad by companies that are active in the EU and offer services to EU citizens.
Clearly, there is some food for thought for telcos who will need to think carefully about how they could be affected. At first glance, it looks like there could be some significant ramifications to all levels of the telco business model.
The EC has tried to add some sweetners for companies – it says cutting red tape, not something it is well known for, could account for savings worth over €2.4 billion a year.
At this point it’s worth considering why the proposals are happening at all. The current data protection laws date back to 1995 – a time when, the EC points out, less than one percent of Europeans used the internet.
The technological changes that have taken place since – the EC cites social networking sites, cloud computing and location-based services in particular – mean new rules were somewhat inevitable.
Equally, public opinion is hardening against improper data use – 70 percent of Europeans are concerned that their personal data may be misused, according to the latest EC Eurobarometer survey.
In other words, much of this should not come as a surprise to anyone.
The changes will benefit every stakeholder in the digital ecosystem, according to EU Justice Commissioner Viviane Reding: “A strong, clear and uniform legal framework at EU level will help to unleash the potential of the Digital Single Market and foster economic growth, innovation and job creation," she said in a statement.
A key element of the predicted benefits to business is an increase in trust with consumers. This is something that operators have long traded on as being a key differentiator for them.
While there is certainly some truth in this, European Communications has suspected that the telco “trust” card has been somewhat overplayed, particularly as the Apples, Googles and Facebooks of this world continue to harvest data at incredible rates.
Nevertheless, data protection reform could give telcos the perfect opportunity to re-seize the initiative. To do so, they need to come up with a new, credible alternative to their “consumers have always trusted us” refrain.
Luckily time is on their side. The EC’s proposals now pass to the European Parliament and the individual member states for discussion. Once there is agreement, it will be another two years before the final version is adopted.
With the economy front and centre of the political discourse now, it could be several years before these proposals come into force. Telcos should use this time wisely.
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