European regulator greets Silicon Valley with an olive branch

Author: Mike Swift
15 Sep 15 | 23:02 GMT

IN BRIEF
Giovanni Buttarelli, the European Union data protection supervisor, told MLex that his visit to Silicon Valley this week, which includes meetings with companies such as Uber Technologies and Google, is more about listening and learning than preaching. That stance was clear as Buttarelli began his circuit of Silicon Valley with an appearance at a technology policy forum Tuesday, opening with the words: "I’m not here to preach.”

From the point of view of many in Silicon Valley, few regulators are more worrisome than the European Union Data Protection Supervisor, an authority that some fear will suffocate technological innovation under a blanket of regulations and rules.

So when the current EU data protection supervisor, Giovanni Buttarelli, opened his talk  at a technology policy forum in Palo Alto, California Tuesday with the words, "I’m not here to preach,” he extended an olive branch to an audience peppered with in-house privacy and data security lawyers from Google, Intuit, Zynga and other Valley companies.

In scheduled meetings over the balance of this week with the likes of Uber Technologies, Apple, Google and others, and at a series of public events in Silicon Valley, Buttarelli says his primary goal will be to listen and learn. He also hopes to transmit the message that he is intent on opening an “entirely new chapter” in privacy and other data protection regulation between Europe and Silicon Valley, one that would emphasize flexibility and dialogue. 

That open-armed stance was on clear display at Tuesday’s meeting of the Churchill Club, a Silicon Valley policy and networking group. 

“I’m here in peace,” Buttarelli said, speaking in a 14th floor room that offered sweeping views from Stanford University to San Francisco. “I’m falling in love with this global hub of creativity. I really appreciate what you are doing here. And I’m mainly here to listen.”

Buttarelli, who took office on Dec. 4, said he wants to give companies that collect, process and hold data “much more flexibility” in how they comply with European data protection rules, and that European Data Protection Authorities should “refrain from dictating the solution” to Internet companies.

That overture was met by skepticism by some in Tuesday’s audience, including Facebook’s first public policy director, Tim Sparapani, who quizzed Butarelli about whether the EU’s ongoing overhaul of its privacy policies would block engineers from using data to dream up new and entirely unexpected new products or companies.  With the European Parliament and EU states having opened final negotiations on the new privacy rules this summer, Buttarelli, who will assist in implementing and enforcing the law, said recently (see here) that process is on its “last mile.”

Sparapani, the moderator of Tuesday’s forum, said the emphasis on the minimization of data collection by companies in the new EU rules “is going to be a flashpoint for how we can continue to innovate.” Considering draft rules that include issues such as the “Right to be Forgotten” and that run more than 250 pages, Sparapani said, “I can’t imagine how we can make it actionable for people.”

However, Barbara Lawler, chief privacy officer for the financial software company Intuit, said many in Silicon Valley will be relieved when the new EU privacy rules are finalized, and companies can finally begin to react to finished rules. That is vital for Silicon Valley, because software companies such as Intuit map out their software modernization process two to three years in advance, she said.

“We look for harmonization around the globe, and we know the high bar Europe has traditionally set on data protection,” Lawler said.

Buttarelli has also said that he believes European Commission antitrust enforcers should share ideas with their data-protection colleagues when they are investigating whether online companies are harming consumers and shutting out rivals (see here).

He returned to the theme of breaking down the walls between antitrust and data protection on Tuesday, saying that he had met in recent weeks with EU antitrust chief Margrethe Vestager, and had received a good response on that issue. “We see that the competition authorities are discovering how data is the new currency, the oil of a data-driven economy,” Buttarelli said.

The role of data in bolstering market power has been raised in mergers such as Facebook’s landmark $19 billion purchase of WhatsApp, a 2014 deal viewed by many as Facebook’s move to acquire the trove of mobile phone numbers held by the world’s largest mobile messaging app. Antitrust authorities in the US are also grappling with the question of whether data can act as a barrier to entry in competition analyses (see here).

In an interview with MLex this week in San Francisco, Buttarelli declined to discuss specific cases such as WhatsApp, but said he will continue to push to break down the “silos” that separate antitrust and data protection law.

“Our objective was to launch a debate, at the international level, by analyzing how consumer competition and data protection laws are currently working a little bit in silos, and how a holistic approach can be introduced,” Buttarelli said. The data protection supervisor would play only an advisory role to competition authorities, he said, adding that he wants US regulators to also be part of that “debate.”

“We don’t want to interfere,” he said. “We would like to be of help, to offer our expertise.” But the goal would be to help competition authorities consider the value of data in services that don’t charge a fee, but that earn revenue through collecting data about their users.

Buttarelli said one key goal of his trip to Silicon Valley this week is to meet face-to-face with young software developers, and to get a sense through their eyes how technology is evolving. “I’m in a learning and listening mode,” he said.

In preparation for his trip to Silicon Valley, Buttarelli said last week that he will create an “External Ethics Board,” to assess how values such as “human dignity” should be applied in an economy driven by technology and data (see here). Buttarelli said Tuesday in Palo Alto that he hopes to recruit members for that board this week from Silicon Valley.

Sparapani, who now heads a tech policy consulting firm in Washington, SPQR Strategies, called the ethics board at Tuesday’s forum “really ground-breaking and quite interesting.”

“People in Silicon Valley think all day, every day about data and what can go wrong with it,” he said. “Ethics is built into the bloodstream here.”