Statement of the Developers Alliance to the EDPS Opinion 4/2017 and to the Commission Proposal on the  Digital Content Directive  

For immediate release

Contact: Claudia Trivilino -- claudia@appdevelopersalliance.org

 

The Developers Alliance (“Alliance”) represents software developers and the companies invested in their success. Alliance members include businesses, of different sizes, leaders in consumer, enterprise, industrial emerging software development along with a global network of more than 75.000 developers. We advocate on their behalf for innovation and job growth.

The app economy is estimated to employ up to 2.8 million developers in 2018, and contributing EUR63bn to the EU economy by 2018. In order to unleash its full potential, we need to find the right balance between creating a regulatory framework that enhances consumer trust and safety online, while allowing small businesses to innovate and grow.

We are concerned that the Proposal for a Directive on the supply of Digital Content (hereinafter referred to as “DCD” or “Proposal”) is inconsistent with existing and future legislation which aims to establish a European Digital Single Market and it jeopardizes innovation and European competitiveness.

In particular, we are concerned about the negative impact the DCD has on premium and ads-funded services and content, which are of crucial importance for the app economy and enable access to technology for consumers.

The major weaknesses of the Commission proposal lie in the following aspects:

  • the very broad and unclear scope,
  • the definition of data as a contractual “counter-performance”, and
  • the contradiction and inconsistency between the DCD and the recently adopted General Data Protection Regulation.

Therefore, we welcome the much-needed clarification provided by the European Data Protection Supervisor (“EDPS”) in his recent Opinion 4/2017 on the DCD, as it addresses the many problematic parts of the Proposal. Particularly, the overall EDPS recommendation, aimed to preserve the carefully negotiated balance between innovation and the fundamental right to privacy as enshrined in the GDPR, deserves support. The DCD should not introduce any new obligations or conditions regarding the processing of consumer data.

However, we wish to stress that we do fundamentally disagree with the EDPS Opinion to include free digital content and services in the scope of the DCD, as we believe that free content and services should not be regulated in the same way that paid-for content and services are. A recent study[1], carried out by Deloitte, demonstrates that a majority of consumers do not expect the same degree of protection, in return for not paying for valuable content or services.

This paper aims to highlight some of the most important points of the EDPS Opinion and outline the Alliance’s position. The paper addresses key points of the EDPS Opinion that the Alliance views as most important. Recommendations are presented as a conclusion.

 

Definition of data as a counter-performance:

In its Opinion[2],  the EDPS expressed serious doubts about the proposed concept of data as a counter-performance in lieu of money. The EDPS takes issue with the notion of exchanging personal data -- a fundamental right -- in return for goods and services. The value of personal data cannot be likened to money, can therefore not be used to purchase goods or services and should in turn not be subject to a regulation as such.

The EDPS maintains also that the language used in the DCD to insert such purchasing-with-data into legislation -- “data as counter-performance” -- should be avoided.

The Alliance agrees with the EDPS Opinion: personal data should be respected as the fundamental right of an individual and should not be used as currency.  Providing data to a service provider is only justified when it is needed for the provision of the service, or is required by law. In our view, the provision of data can be required simply because the performance of the service is not possible otherwise (e.g. need to provide location when booking a hotel room on a reservation website).

In his opinion, the EDPS questions whether the proposal is clear enough on stipulating what is meant by a “counter-performance” and also if such a use is appropriate[3]. We fully agree with this EDPS assessment: data cannot be likened to money since it lackseconomic value and does not exhaust with use, as money would. The Alliance also agrees with the EDPS view that the term ‘counter-performance’ oversimplifies the many varieties of business models and models of data use[4]. The Alliance further supports the EDPS assessment[5] concerning the elaboration of the possibility to “pay with data”, and regarding the “value of data”.

 

Consistency with GDPR:

The EDPS Opinion clearly calls for a coherent legal framework when discussing fundamental rights. EU institutions have been encouraged by the EDPS to avoid any new proposals that “upset the careful balance negotiated by the legislators on data protection rules”, as adopting overlapping initiatives could put at risk the coherence of the whole digital single market. We therefore support this view and draw attention in particular to Points 21, 22, 23 and 42 of the EDPS Opinion, where he addresses the issue of consistency with existing and future legislation.

 

Data retrieval and data restitution:

The EDPS Opinion recommends not to undermine GDPR provisions relating to the “right to access” (Art 15) and “data portability” (Art 20). The EDPSpoints outthat Art. 13 and 16 of the DCD[6] not only overlaps with Art. 15 and 20 of the GDPR (right to access and data portability) but also introduce a different scope and application than the GDPR. The Alliance emphasises the need to adopt a coherent data protection framework that does not lead to conflict in the future. We therefore highly recommend, much like the EDPS, to refer to the articles in the GDPR, in particular Art. 20 on data portability, when granting the consumer the right to retrieve his or her personal data, upon termination of the contract (based on non-conformity on the side of the supplier).

 

Recommendations:

In pursuit of the EDPS Opinion, the Alliance recommends:

●      To horizontally delete the notion of “data as a counter-performance”, in order to align the proposed DCD with the General Data Protection Regulation and to enable future technological developments;

●      That the legal consumer data framework is made consistently and coherently: Innovators, primarily smaller companies, need to have certainty in the legal rules. Consistency, simplicity and clarity are key, and will enable developers to comply with regulation, and continue innovating and providing better services and products that benefit consumers;

●      That the scope of remedies available in the DCD (in Arts 13, 16) is limited to personal data provided by the consumer only in order to ensure alignment with already existing provisions on data portability in the GDPR;

●      That the notion of “any other data” in the DCD, a term ill-conceived, ill-defined, and unnecessary, be deleted; and

●      That the DCD clearly acknowledges the difference between paid-for and free digital content and services; recognising that consumers have different expectations, which merits different kind of protection for these services and content.

 

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The Developers Alliance is the world’s leading advocate for software developers and the companies invested in their success. Alliance members include industry leaders in consumer, enterprise, industrial, and emerging software development, and a global network of more than 75,000 developers.


[1] Deloitte Study, Impact of the European Commission’s Draft Directive on Contract Rules for the Supply of Digital Content, August 2016: http://static.ow.ly/docs/EC%20Digital%20Content_5nY9.pdf

[2] Point 28 of the EDPS Opinion

[3] see Point 25 of the EDPS Opinion

[4] see ditto: [“...Considering the various business models and different uses of personal data in the context of a commercial transaction, the use of the term counter-performance is not appropriate to address the business models at stake and could appear to oversimplify in one single term a variety of business models and data usages...:”]

[5] See Points 26 and 27 of the EDPS Opinion

[6] see Point 76, 77 and 78 of the EDPS Opinion