Press Release: A massive European “own goal”!

DPA Press Release: A massive European "own goal"! Expert IT Group calls for big changes in draft EU Commission proposal for a Regulation on Electronic Identification and Trust Services for Electronic Transactions in the Internal Market.

PRESS RELEASE

 

A massive European "own goal"! Expert IT Group calls for big changes in draft EU proposal

The Commission proposal for a Regulation on Electronic Identification and Trust Services for Electronic Transactions in the Internal Market threatens a massive ‘own goal’ says the Digital Policy Alliance. Its research shows that the plan could be a threat to exports and force high costs on small business. The Digital Policy Alliance (DPA) is therefore calling on the European Parliament, Commission and Member State Governments to produce much slimmed down and workable rules.

“Regulations won't create trust, good business relationships will ” - Earl of Erroll, Chairman, DPA

This proposed Regulation expands previous legislation to cover the mutual recognition and acceptance at EU level of notified electronic identification schemes and other electronic trust services, with the aim of making existing electronic identities functional across EU borders and enhancing trust in electronic transactions in the internal market.

However, in practical terms the Regulation reflects a worrying remoteness from the technical and business realities that define whether entrepreneurs are willing to invest in cross-border online business. The proposal to regulate and audit trust services under mandatory legislation provides no greater protection to personal data than existing data privacy legislation, and rather than increase confidence in e‐Commerce, will only discourage its growth by increasing barriers to new services and new entrants.

The Regulation also introduces a blanket liability on providers for damage caused to consumers and businesses due to non‐compliance with the security or other provisions of the regulation, unless the provider can prove it has not acted negligently. While not all services and not all providers should be required to comply with the regulation, this excessive burden presents a massive disincentive for the provision of trust services, and will increase costs as providers insure themselves against the extra liability risk.

The combined effect is likely to discourage major UK exporters and intimidate the SME and micro-business community by increasing costs and uncertainty, and inhibit growth of the Digital Single Market that the Commission sees as a major route to economic recovery.  Instead we should work towards a framework of common standards that can be adopted by the private and public sector as appropriate.

The Earl of Erroll, Chairman of the DPA said:

"The regulation needs to focus on that which will help achieve the stated objectives and make Europe a wealth and job creating location of choice for globally trusted on-line organisations. At a time of financial pressure, that means recognising existing good practice and taking a technology neutral approach to facilitating the adoption of better practice to remove fraud, inefficiency, risk and uncertainty with regard to cross-border transactions, particularly on the part of individuals and small firms."

Dr Edward Phelps, Secretary-General of the DPA said:

"At the time of economic uncertainty across Europe it is critical that we do all we can to support our businesses to grow. As currently drafted the rules risk increasing costs and uncertainty, and inhibiting the growth of the Digital Single Market. I urge the EU Parliament, Commission and Member states to urgently review the potential impact of the proposed rule before it is too late."

A detailed analysis and discussion of the impact of the Regulation, as conducted by the DPA’s Digital Single Market Group is available at: https://dpalliance.org.uk/new-position-paper-stakeholder-concerns-around-eid/.