Finding the balance on data protection and smart city technology

by James Mullock. Published Thu 05 Feb 2015 12:42
Smart city developers are desperate for certainty on data protection laws

James Mullock, data commercialisation expert at international law firm Osborne Clarke, discusses why stable data rules are essential in the future roll-out of smart-city technology.

At first glance, this year’s Data Protection Day on 28 January was a bit of a triumph. Not only was it widely mentioned across online and offline media, but the EC also chose Data Protection Day to announce that its plans for an EU-wide General Data Protection Regulation (GDPR) would come to fruition later this year. For the energy and infrastructure companies waiting for a positive conclusion to the EU’s ongoing data protection debate that sounded like good news. Sadly, underneath all the optimism lies a stark truth: that EU law makers have been setting finalisation deadlines for new and improved data and cyber laws and then missing them since 2017; and that the chances of those laws being finalised this year, or indeed anytime soon, seem incredibly slim.

The problem with the GDPR is that, like many great ideas, it rapidly falls apart in the cold light of day. In this case, there is a classic hawks versus doves scenario. Some European law makers want a regime that is protective but business friendly to help drive innovation, while others want robust regulation that protects individuals from a Big Brother society being created, and the Edward Snowden / PRISM revelations have put wind in the sails of that lobby group. Whilst such a fundamental split exists it seems all but impossible to get an agreement that allows the Regulation to be passed in the poker game that is EU law making.

So far, we’ve had three years of uncertainty as Brussels and Strasbourg deliberate and negotiate precise details around important issues such as how quickly data security breaches will have to be notified to regulators and whether the maximum level of fine for non-compliance should be 2% or 5% of worldwide turnover. Energy, infrastructure and technology companies involved in smart city developments are desperate for certainty around what the law will be to facilitate the design and build out of smart systems across cities. Without that, it’s difficult to develop the data collection and analysis processes that will allow the innovation and full benefits of smart deployment to be realised.

That’s more than frustrating for those companies. The problem is that data privacy is one of the great bogeymen of our age. The public and political debate is driven by how good protections are, or should be, not on the benefits of sharing and analysing data (beyond ‘open data’ initiatives, which apply to the public sector). If smart cities are to work, individuals, cities, regulators and businesses will need to start to view data as a currency. By that, I mean that individuals will need to see concrete benefits from giving up their data, and law makers will need to come up with balanced rules that enable smart data usage and cities and businesses will need to treat data with the respect it deserves.

The press has an important role to play as has been demonstrated by smart meter roll outs in European countries. Our recent research shows that the UK lags well behind many other European nations when it comes to the adoption of smart meters. Only 22 per cent of UK respondents thought that UK consumers are convinced of the benefits of smart meters, compared to 48 per cent in France and Italy. Press stories about concerns around data privacy and the intrusiveness of smart meter usage are often pointed to as the cause of this reticence, but I wonder if that is truly a concern of the man and woman in the street. As one of my colleagues recently pointed out, having protections around personal data and national infrastructure cyber security is important, but is anybody really bothered about Big Brother knowing that they used some hot water?

It’s a wide-ranging debate with many blind alleys and round-about routes. The onus is on national and supra-national regulators to work together to make data laws as smart as the technology that is being developed. As we’ve seen, that just isn’t happening.

Energy companies and new entrants need to have the confidence that, in long-term, data rules will be stable allowing them to really invest in developing smart city technologies. Given that energy technologies and solutions will be at the heart of many smart city developments getting the regime fine-tuned right now is crucial. If the regulators need an ideology to underpin a new regime, perhaps it’s worth them remembering that the very reason for smart cities making better use of data is so that they become more prosperous, sustainable and better places for individuals to live. Europe can’t have it both ways on data protection and smart cities, and now is the time for it to decide which way to go.

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