EU looks to remove national barriers to data flows

September 29, 2016 6:50 AM EDT

A lock icon, signifying an encrypted Internet connection, is seen on an Internet Explorer browser in a photo illustration in Paris April 15, 2014. REUTERS/Mal Langsdon

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By Julia Fioretti

BRATISLAVA (Reuters) - The European Commission wants to reduce national restrictions on where some types of commercial and health data can be stored, Vice-President Andrus Ansip said on Thursday.

Ansip is in charge of creating a digital single market in the European Union to boost growth in the 28-nation bloc.

"Barriers like data localization not only prevent economies of scale. Data localization also holds back the digital single market. It is not good for Europe, its businesses or for technologies," the former Estonian prime minister said at a conference.

"So, later this year, we will present an initiative to tackle unnecessary restrictions on where data is located."

Some European countries restrict where data such as company data, tax data, book-keeping data, financial and health data can be stored on security and privacy grounds.

Commercial data transfers to the United States have come under particular scrutiny in the wake of revelations of U.S. mass surveillance programs, stoking calls for Europeans' data to be stored in Europe.

But Ansip wants to tackle data storage restrictions within Europe as well, saying it hampers technological innovation.

He said the vast majority of restrictions on where data should be stored have nothing to do protecting privacy or security threats.

"Forcible data localization rules will not lead to better protection, but to fragmentation," he said.

Denmark recently changed its laws on book-keeping data, Ansip noted, allowing companies to store their data anywhere as long as Danish authorities have full access.

(Reporting by Julia Fioretti; editing by Jason Neely)

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