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Will the GDPR Stifle Digital Innovation?

By Eitan Bremler
Digital Innovation

In general, more regulation is a good thing. Regulation is what's given us life-improving innovations like the 8-hour workday, and the weekend. It's given us child labor laws, fair wages, cleaner air and water, and healthier food. There's no denying that regulation is, in general, a good thing—but will the GDPR specifically improve our lives, or could it stifle digital innovation?

This isn't simply an idle question. The EU's Office of the Information Commissioner has historically had some… interesting takes on what constitutes good practice for regulating the internet. While some of what it has enacted seems to come from a place of good intentions, these intentions don't appear to have borne out in terms of good policy.

The EU Doesn't Have a Great Track Record on Enabling Digital Innovation

For one example, let's look at the EU cookie law. While we've talked about it before, what we've said is worth repeating. It's an abstruse policy that gives consumers a right—the right to opt out of companies using their browsing data to improve their user experience—that they didn't really need or want. The cookie law costs European businesses money, money that they might conceivably have spent on innovation, and gives the consumer nothing in return.

Another strike against the GDPR might be found in the EU's record $2.7 billion antitrust action against Google. Part of the EU's contention against Google is that the search giant is unfairly favoring its own products in its search results. Under the GDPR, Google's individual products might be treated as separate entities, forcing users to consent every time their data is shared within the Google ecosystem. This could have a chilling effect on Google's efforts to make its products easier to use via machine learning and AI.

<< General Data Protection Regulations Here >>


Regulation Doesn't Necessarily Sound a Death Knell for Ideas

While it's true there's a case for the idea that ordinances like the GDPR will restrict the ability of big companies to innovate, there's a counterfactual argument to be made. This argument says that while regulation may limit innovation by larger companies, innovation across the board will be unfettered.

Remember back to the middle of the 20th Century, when Bell Labs was one of the dominant forces in technical innovation on the planet. Some of the most pivotal inventions in history can be traced back to that company in that time—including the invention of the transistor, Claude Shannon's development of information theory, solar panels, lasers, and more.

In 1982, the Bell System operated by AT&T was broken up via an antitrust lawsuit. Although that suit was driven by monopolistic concerns, it arguably had the effect of a proto-GDPR. Instead of having a large amount of customer information tied up in a single entity, it became spread out among numerous independent former subsidiaries. Instead of using all of this information in order to dominate the market, those former subsidiaries used that information to compete against each other.

What's notable is the fact that, even though Bell spawned a host of world-spanning innovations, the overall pace of innovation in the world didn't slacken as Bell was disbanded. Even though Bell's host of inventions changed the world, the pace of innovation and discovery didn't slacken on the digital front once Bell was gone. Regulation doesn't mean that innovation is dead—it just means that smaller companies must take up the mantle.

Safe-T Lets You Innovate in a Regulated World

Whether it's good or bad, regulation isn't going away. The best way to innovate while under any governance regime is to make sure that full compliance becomes as automatic and stress-free as possible. Safe-T provides that assurance, making compliance into a process that shields your organization without becoming obtrusive. To learn more, contact Safe-T for a free demo today.

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