Atlantic Council Report on Transatlantic Digital Marketplace: Most But Not All Suggestions Excellent

Share |

The Atlantic Council released “Building a Transatlantic Digital Marketplace: Twenty Steps Toward 2020” on April 5 in Brussels.  Later this month, the Council will host another event in Washington, D.C. on the report.  I was a member of the Atlantic Council’s Task Force on a Transatlantic Digital Agenda.

The concept of a transatlantic digital marketplace is something well worth supporting.  The Brookings Institution’s 2014 work on the value of transatlantic data flows helped make the economic case for why this is so important.  The 2015 European Center for International Political Economy (ECIPE) paper on the importance of complementary policy for the ICT sector helps explain what policy environment, including on Intellectual Property Rights (IPRs) is optimal for the software sector.  The Atlantic Council Report contains many excellent ideas for building a transatlantic digital marketplace such as promoting cross-border data flows.

Having said this, some of the report’s IPR ideas are problematic. As the Report notes: “not all of the report recommendations reflect the views of all Task Force Members.”   The IPR recommendations do not fully reflect what is happening in the United States and in Europe.  For instance, the Report actually understates the important role ISPs play in preventing copyright infringement with its comment that “the political climate on both sides of the Atlantic has little tolerance for deputizing ISPs and platforms to police copyright violations.”  The Report properly notes that both the United States and the European Union have strong creative sectors “whose output should be protected.”  It is important to acknowledge, welcome and build on existing mechanisms, legal and voluntary, in order to minimize copyright infringement over the Internet.  Many Internet platforms take voluntary steps in conjunction with copyright owners to make sure that their systems are free of infringing material. Moreover, responsible ISPs do not embrace business models predicated on illegal conduct of any kind, including copyright infringement.

Furthermore, footnote 29, which suggests that TTIP “could” include fair use provisions is not consistent with both sides’ stated negotiating goals.  At the outset of the TTIP negotiations, partly because of input from stakeholders on both sides of the Atlantic (industry and civil society), the U.S. and the EU signaled that they would not be negotiating a substantive IPR chapter.  In any case, the opinion in the footnote that the TPP is not “perfect” because it lacks fair-use provisions is not shared by all Task Force Members.  In addition, the paper would have been improved by tempering the unconditional objection to reconsidering liability protections for intermediaries with some expression of sensitivity for the substantial stress from online infringement experienced by copyright holders and an open door to improving meaningful protection, which can include voluntary cooperation between owners and intermediaries.

Using the ongoing Transatlantic Trade and Investment Partnership (TTIP) negotiations to create an “interoperable digital space” is one ambitious idea (step 2) that is worthy of strong support.  On October 9, 2015, SIIA and DIGITALEUROPE organized a panel for Trade in Services Agreement (TISA) negotiators that explained how interoperability mechanisms such as the U.S.-EU Safe Harbor Framework (now the EU-US Privacy Shield if EU Member States approve it) provide ways for companies to transfer data from one jurisdiction to another one in compliance with the laws and regulations (e.g. on privacy) in the jurisdiction from which the data is transferred.  TTIP should contain a strong E-commerce chapter along the lines of TPP.  In this context, it is important to be extremely clear that TTIP is not (and should not be) a vehicle for negotiating substantive privacy law.  There should be binding data flow obligations that forbid restrictions based on economic protectionist motivations.  But both the United States and the European Union should be permitted to continue with their sectoral and global approaches to privacy.

Also in this context, it would indeed be a good thing to expand the transatlantic antitrust dialogue (step 13).  It is of course legitimate for U.S. and EU regulators to have different antitrust approaches.  It is worthwhile recalling, however, that at least within the digital space, the thrust of the European regulatory concern seems to, in effect, focus on American firms whether they use territorial licensing models to distribute content or platform operators.  This at least appears to contradict Europe’s stated goals for the digital sector.

As a whole, the Atlantic Council makes a valuable contribution to the goal of a transatlantic digital marketplace. It should certainly serve to catalyze ambition with respect to stimulating transatlantic digital trade, especially with respect to the cross-border data flows that increasingly make the world’s most important economic relationship, the U.S.-EU economic relationship, possible. 

Carl Carl Schonander is Senior Vice President for Global Public Policy.