Externalizing Europe: the global effects of European data protection
| Date | 14 January 2019 |
| Published date | 14 January 2019 |
| DOI | https://doi.org/10.1108/DPRG-07-2018-0038 |
| Pages | 32-43 |
| Author | Annegret Bendiek,Magnus Römer |
| Subject Matter | Information & knowledge management,Information management & governance,Information policy |
Externalizing Europe: the global effects of
European data protection
Annegret Bendiek and Magnus Römer
Abstract
Purpose –This paper aims to explainhow the EU projects its own data protection regime to third states
and the US in particular. Digitalservices have become a central element in the transatlanticeconomy. A
substantial partof that trade is associated with the transferof data, most of it personal, requiring manyof
the new products and services emerging to adhere to data protection standards. Yet different
conceptions of data protection exist across the Atlantic, with the EU putting a particular focus on
protectingthe fundamental right to privacy.
Design/methodology/approach –Using the distinction between positive and negative forms of market
integration as a starting point (Scharpf, 1997), this paper examines the question of how the EU is projecting
its own data protection regime to third states. The so-called California effect (Vogel, 1997) and the utilization
of trade agreements in the EU’s foreign policy and external relations are well researched. With decreasing
effectiveness and limited territorial reach of its enlargement policy, the EU found trade agreements to be
particularly effective to set standards on a global level (Lavenex and Schimmelfennig, 2009). The existence
of the single market makes the Union not only an important locus of regulation but also a strong economic
actor with the global ambition of digital assertiveness. In the past, establishing standards for the EU’s vast
consumer market has proven effective in compellingnon-European market participants to join.
Findings –As the globe’s largestconsumer market, Europe aims to project its own dataprotection laws
through the market place principle (lex loci solutionis), requiring any data processor to follow its laws
whenever European customers’data are processed. This paper argues that European data protection
law creates a ‘‘CaliforniaEffect’’, whereby the EU exerts pressureon extra-territorial markets by unilateral
standardsetting.
Originality/value –With its GDPR, the EU may have defused the problem of European citizens’ data
being stored and evaluated according to the US law. However, it has also set a precedent of extra-
territorial applicabilityof its legislation –despite having previously criticized theUSA for such practices.
By now, international companies increasingly store data of European customers in Europe to prevent
conflicts with EU law. With this decision, the EU will apply its own law on others’ sovereign territory.
Conflicts created through the extra-territorial effects of national law may contradict the principle of due
diligence obligations butare nevertheless not illegitimate. They may, however, have further unintended
effects: Other majoreconomies are likely to be less reluctant in the future about passing legal provisions
with extra-territorialeffect.
Keywords Privacy, Data protection, Digital trade, Fundamental rights, California effect
Paper type General review
1. Introduction
The trade in digital technology and services has become a central element of
international economic relations[1]. Since 2014, more than half of services traded
between the EU and US are digital (Meltzer, 2014). A substantial part of this trade is
associated with the transfer of data, some of it personal, some of it machine generated.
Emerging technologies such as 5G and the “Internet of Things”, as well as growing
middle classes worldwide are set to further increase digital trade. Despite this, conflicts
have arisen over how to use those growing amounts of data, giving way to conflicting
regulatory approaches. Calls for “data sovereignty”, i.e. enhanced control of data
Annegret Bendiek is
Deputy Head at Stiftung
Wissenschaft und Politik,
Berlin, Germany.
Magnus Ro
¨mer is Research
Fellow at WZB Berlin Social
Science Center, Berlin,
Germany.
Received 27 July 2018
Revised 15 October 2018
Accepted 8 November 2018
PAGE 32 jDIGITAL POLICY, REGULATION AND GOVERNANCE jVOL. 21 NO. 1 2019, pp. 32-43, ©EmeraldPublishing Limited, ISSN 2398-5038 DOI 10.1108/DPRG-07-2018-0038
To continue reading
Request your trial