Regulating machine data: less is more for global growth

Author:Thaddeus Burns
Position:Senior Counsel, Intellectual Property & Trade, General Electric Company
SUMMARY

The exponentially growing importance of data derives from several interrelated technological trends in the digital economy, including the Internet of Things (IoT), machine learning, big data, machine-to-machine communication, artificial intelligence and cloud computing.

 
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The IoT comprises a vast number of connected industrial systems that communicate and coordinate their data analytics and actions to improve industrial performance. Its key principle is the implementation of cyber-physical systems, i.e., networks of microcomputers, sensors and actors embedded in materials, devices or machines, connected through the Internet. For example, a single oil well equipped with 20-30 sensors can generate 500,000 data points every 15 seconds. According to estimates, over 26 billion devices will be connected to the Internet by 2020.

More broadly, the digital economy contributes significantly to the social, economic and environmental advancement of the world. First, IT solutions diffuse at unprecedented speed, permitting rapid deployment of technology to the poorest people in the world and improving access and participation opportunities. Second, digital technologies place people at the center of products and services, allowing for attractive offerings at reduced costs with improved sustainability and user-friendliness. Third, they enable new business models that enhance innovation and growth in a wide range of sectors.

In order to allow the digital economy to realize its enormous potential, it is crucial to devise an adequate policy framework, in particular one that encourages the free movement of data on a global scale. Policymakers throughout the world have been considering how to respond. A case in point is the European Union. In early 2017, the European Commission published Building a European Data Economy, a communication which outlines its Data Economy Package, the final building block of its Digital Single Market Strategy.

The communication aims to review the rules and regulations hindering the free flow of non-personal data. To this effect, it makes a number of important proposals to remove unjustified or disproportionate data location restrictions. In recent years, governments have been erecting borders in cyberspace, including in particular data localization requirements. These can take the form of rules that prohibit information from being sent outside the country, subordinate such data transfers to the prior consent of the data subject, require copies of information to be stored domestically, or provide for taxation of exported data. Many data localization requirements have an unclear justification or are overbroad.

The Commission also discusses legal issues pertaining to access to and transfer of...

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