Brexit threat to data flows
LONDON — Keeping digital data flowing between Britain and the EU is crucial to the post-Brexit plans of U.K. Prime Minister Theresa May.
But someone forgot to tell the negotiators in Brussels.
British and EU officials have yet to start discussions about how such data flows — everything from information on people’s search queries to companies’ payroll details — will continue after the U.K. leaves the bloc, according to U.K. and EU officials.
The lack of even initial negotiations on data, now the lifeblood of the digital economy representing hundreds of billions of pounds of annual trade between both sides, has raised warnings that the U.K.’s focus on tech in its post-Brexit plans may run into problems if it can’t retain access to EU data.
It also may undermine London’s efforts to secure a far-reaching free-trade agreement with the bloc after May insisted that data flows were one of the “five foundations” of the U.K.’s future trading relationship with Brussels.
“It would be quite a shock to the system if we find ourselves out of the EU’s trusted area,” said Paula Barrett, global head of privacy and information law at the Eversheds Sutherland in London. “It would make some businesses think twice about moving to the U.K.”
“The Commission has taken a very strict interpretation of their sequencing guidelines to say future data flows are a matter for future negotiations” — U.K. government official
While both U.K. and EU negotiators understand the urgency to start data talks, neither side has so far begun haggling over a so-called adequacy agreement, which would maintain unfettered access to digital information between both sides, the officials said.
They spoke on condition of anonymity because they were not authorized to discuss the positions publicly.
Without an adequacy agreement, British-based companies would not have automatic rights to data held within the EU, and would have to rely on other cumbersome mechanisms to retain any access to such information. Now, three-quarters of U.K. international data flows are with EU countries, according to government figures.
Central to any future data access are worries about Britain’s national security operations. The U.K. Information Commissioner, the country’s privacy watchdog, warned Tuesday that bulk collection and retention of data by government agencies could undermine the U.K.’s bid to get a data agreement with the EU.
“The Commission has taken a very strict interpretation of their sequencing guidelines to say future data flows are a matter for future negotiations,” said a U.K government official familiar with the issue. “We published a paper on it last summer, which has not been met by any response because they would say they are unable to discuss it because it is a future issue.”
There are also British frustrations that potential data discussions have centered on what would be required to wind down U.K.-EU data flows, which the official said is “never going to be used in real life.”
It is taking up time that could be used to outline a future relationship beneficial to both sides, he added.
In response, EU officials say Britain has yet to lay out what it wants from such a data-flow deal, and such discussions must wait until officials have hammered out how the U.K. will leave the bloc.
Another difficulty, according to the U.K. and EU officials, are delays over who will lead the talks on both sides when they eventually start.
The U.K. official could not say who would run the talks on the U.K. side, but said that any future talks would rely on “cross-Whitehall expertise.”
The Commission’s justice and consumers department, which led previous data agreement negotiations with the United States, is expected to handle the day-to-day talks, though Michel Barnier’s Brexit team is also likely to weigh in, according to EU officials.
European Union Chief Negotiator in charge of Brexit negotiations Michel Barnier at the EU headquarters in Brussels on January 29, 2018 | John Thys/AFP via Getty Images
As all this plays out, the need to tackle data flows becomes more urgent.
While the U.K. government is confident that its current data protection standards, which already comply with EU norms, and its upcoming Data Protection Bill, will give it a head start in securing a deal, time is not on London’s side.
It took almost three years, for instance, for the EU to reach an agreement with the U.S. for a similar data transfer deal. Japan’s pending data agreement with Brussels — an easier negotiation because Tokyo has similar data protection standards as the EU — is expected to take 18 months.
EU officials said Britain’s existing involvement in the bloc’s privacy standards made the Japanese timeline more likely than the lengthy negotiations with the U.S.
But, an official cautioned, the Brexit talks would be unlike any previous negotiations around data flows.
David Herszenhorn contributed reporting from Brussels.