National cloud protectionism is the wrong signal

2 May 2014

Europe is still, in many respects, its own prisoner. Even if the trans-national peacekeeping policy has been working successfully for decades, individual state interests remain stubborn when determining many key social and economic areas.

In the economy national sensitivities are often expressed in the form of protectionist solo actions.

If countries argue that their national legal standards are superior to those of the European Union, this is mostly due to protectionist reasons. Of course within the framework of the diverse contractual obligations of the EU these national solo actions cannot be implemented fully autonomously. That’s why in many cases more subtle strategies are applied, like the conscious delay of some of the EU’s political decisions.

ICT market, cloud computing and data protection – openness vs. partitioning

Managing markets is always a tricky balancing act between the political will of creation and the power of self-regulation according to supply and demand. If we take the ICT industry, a future key market for securing Europe’s wealth if undivided, as a benchmark, then harmonised framework conditions for data security standards based on European values must combine with a free flow of data to form a sustainable market environment.

Europe must overcome the segmentation of its ICT market in the direction of a “digital single market”, in order to take advantage of the economic effects of this large economic area. In this irreversible strategic approach special regulations at national level are lethal.

Regulative standards are where Europe can stand up and increase international awareness. If Germany, out of pride of its high ICT safety levels, demands the establishment of national networks within its country borders, it’s an understandable marketing approach, but doesn’t meet the objectives of the Union. Europe should rather focus on rolling out best-practice examples for IT security and data protection from member states at community level.

Fabasoft, as a cloud provider, is an example of harmonising data protection and data openness

I agree with Neelie Kroes, Vice President of the European Commission, in recognising that we don’t need national clouds in Europe. By “locking” data in national “cloud cages” Europe will not manage to implement the objectives of Agenda 2020 by the end of the decade. We at Fabasoft have succeeded in implementing this approach via our cloud service the Fabasoft Cloud.

A “European” cloud protects data in secure data centres in Europe. Thus, companies always have the assurance of knowing where their data is stored and that it’s protected from espionage. The cornerstones of a promising European ICT policy are full transparency over every movement of data, selectable storage locations and the best possible interoperability between European cloud providers, an upgrade of the transport infrastructure, the safety-related tempering of the external borders of the European data space and the establishment of a highly ethical data protection regime that applies to providers from all over the world.

Ethical protectionism in defence of values

The protectionism issue is complex because protectionism does not equal protectionism. Whereas tariff (for example customs) and non-tariff economic-protectionist measures (for example export subventions, import restrictions) as the economic control instruments of the last centuries should be regarded as obsolete for the protection of industries that are no longer competitive, in social communities such as the EU they would be, in some cases, entirely appropriate as economic defence measures against ethical concerns.

It is this dilemma that the EU is currently facing, for example in its negotiations with the US about the TTIP agreement (Transatlantic Trade and Investment Partnership). At the secret negotiations, predominantly driven by the interests of large global corporations from both sides of the Atlantic, supported by powerful lobbying activities as well, the public falls inevitably by the wayside.

Neelie Kroes herself has recognised that, in the context of the still not entirely resolved tensions of the NSA espionage affair, the EU’s further negotiations with the US in terms of trade agreements won’t contribute to Europe’s credibility. On the one hand, this agreement would strengthen its global commercial weight, because, after all, it’s about a common market of around 900 million people with a commercial volume of 500 billion Euros. However, European standards for the various areas of life such as nutrition, medicine, environmental protection or even data protection should be incorporated into this agreement.

This brings me to the “Safe Harbour” agreement with the US. The worst legal discrepancy in data exchange between Europe and the US based on the currently running agreement is the fact that, while US citizens and corporations have the right to appeal against the misuse of personal data in the EU, this cannot be said about Europeans and the European economy in the opposite direction. That’s why a readjustment of the provisions, together with the establishment of an improved European data protection is indispensable.

The digital single market should refute accusations of protectionism

According to the political economy, single markets are always suspected of protectionism because, although they liberalise the exchange of goods within their borders, they simultaneously partially restrict the freedom of trade with the external world. For this reason it’s important, on the one hand, to make it clear that the Union is not trying to restrict competition with other regions of the world, but only to establish fair rules for competition. On the other hand, Europeans should communicate their inner set of values more powerfully and set the global example of the 21st century. Any accusation of protectionism because of the imposed compliance with ethical and social standards in data protection or at the organisation of cloud computing would thus lose any meaning both concerning transatlantic discussions and economic relationships to South East Asia. This would mean double benefits for Europe: The human, democratic, multicultural, open and socially sustainable understanding of values would not only remain unaffected by the current destabilisation attempts, but would also have a well-regarded exemplary effect all over the world. And finally, Europe could finally take up the scientifically-active role in the ICT industry sector that its visions and industrial maturity on the ICT world stage have long warranted.

Helmut Fallmann
Member of the Managing Board

Almost 30 years ago, Helmut Fallmann founded the software group Fabasoft together with Leopold Bauernfeind. Today he is a member of the Managing Board of Fabasoft AG. Fabasoft has developed into a leading European software manufacturer and Cloud provider headquartered in Linz, Austria.

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