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Data Transfers Post-Brexit: Smoothing the Transition


3 min read

The average internet user consumes vast amounts of data on a daily basis but rarely – unless an avid follower of Max Schrems - thinks about how the data flows or the mechanisms and legal arrangements in place to make it all happen. If companies like Cloudflare are doing their job well behind the scenes, you really shouldn’t have to – it just works, and so you can busy yourself emailing, communicating, transacting and sharing information.

Users benefit enormously from the free movement of data, and it is a highly regarded feature of living and doing business within the European Union. With the appropriate legal protections in place, scientific and societal benefits also flow along with the data, and the quality of our lives is improved immensely.

And the internet is an increasingly busy place:

Image courtesy of @LoriLewis and @OfficiallyChadd

Let it flow, let it flow...

The European Commission reported in a communication earlier this year that the European Data Economy – i.e the marketplace where digital data is exchanged as products or services derived from raw data – was estimated at EUR 272 billion in 2015, and that the value is expected to increase to EUR 643 billion by 2020, in large part thanks to ever-increasing amounts of data being generated by emerging technologies, such as the Internet of Things and Artificial Intelligence. Data is certainly big business.

Assuming no data flow restrictions (such as data localization laws), companies can more readily access performant and secure technologies, enter into new markets, develop new products and services and avail of efficiencies and cost reductions, all of which can be passed on to their customers. This is particularly important for early-stage companies such as Cloudflare, seeking to grow, invest and provide its offering to as many users as possible, and at the lowest price possible.

Having just announced our 110th data center and with more locations coming soon, our enthusiasm and love for data flows should be obvious. With 6 million+ customers, and 10% of internet (HTTPS) requests flowing through our network each month, we are definitely shifting a lot of information in order to provision our services. And almost one third of our data centers are located in Europe, an exciting and growing marketplace for Cloudflare.

Cloudflare, like most companies, is working hard to ensure full and early implementation of the EU’s new General Data Protection Regulation (GDPR), which will apply to all companies offering goods and services to EU citizens as of May 2018. This is a progressive piece of legislation, which will help bolster user trust, and is perfectly in line with Cloudflare’s long-standing commitment to user privacy, transparency and business accountability. We’ll share further updates on our GDPR plans in due course.

Importance of maintaining adequacy

Cloudflare’s main European office is located in London and Brexit introduces uncertainty for businesses based in the UK and beyond, which will be worked through as specific challenges arise. However, a particular issue related to data flows and transfers demands the immediate attention of policy makers and legislators.

According to a recent Frontier Economics report for TechUK, 75% of the UK’s data transfer activity is with European Union countries. Those transfers, which are considered “domestic” today, quickly become foreign transfers as Brexit is implemented. It is clear that efforts must be made to maintain the stability of data transfers between EU Member States and the UK following the UK’s official departure from the European Union. Data will, in effect, need a new passport in order to travel and be processed on the other side.

The UK has committed to implement the GDPR in full notwithstanding its withdrawal from the EU, and so will continue to have a robust data protection regime in place. A finding of ‘adequacy’ for the UK by the European Commission – i.e. a legal assessment that the UK’s privacy protection regime is aligned with that of the EU - offers the least burdensome manner of retaining data flows with the EU, and the least friction for business. It is critical that this mechanism is taken seriously and is in place on Brexit Day One, so that businesses can continue to benefit from the seamless flow of data, without jumping through legal hoops and hurdles, and so that users can continue to not even notice the magic at play.

Cloudflare urges the UK Government to maintain its stated commitment to ensuring unhindered data flows after Brexit, and to work towards a strategy for achieving adequacy during the Brexit negotiations.

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