CBI warns Data Protection Directive will cost businesses and strangle innovation

The Confederation of British Industry (CBI) says the ecu Commission's proposed data protection review will "restrict and burden businesses and threaten innovation".

In a submission to the Ministry of Justice's ‘Call for Evidence at the European Commission's data protection proposals', the CBI said the proposed regulation will threaten many innovative business models, which depend on data-sharing to generate revenue. It also said that added compliance will place a price burden on all businesses, that may deter investment and be passed directly to consumers.

Matthew Fell, CBI director for competitive markets, said: “Many novel business models depend on data-sharing to generate revenue and offer a more individually tailored user experience. Advertising and subscription-based online music-sharing services are a fine example, where we've recently seen ground-breaking innovation through partnerships with social-networking sites.

“Sharing information regarding music likes and dislikes online, without sharing the particular content, means millions more customers can now legally enjoy taking note of music online â€" a lifeline for the flagging music industry.

“It's innovative businesses like these, on and offline, which can be threatened by restrictive controls on data-sharing proposed by the EC, while the price of compliance will burden all industries, deter investment, and ultimately be passed directly to consumers.

“Since innovation is a key driver of business growth, it's important that governments here and in Europe support cutting-edge businesses to continue to innovate, before they get left behind by the remainder of the area.”

The CBI said compliance costs had been overlooked, and to make sure businesses can stay competitive and support growth, the ecu Commission must balance the knowledge protection rights of people with the wishes of shoppers and businesses.

It said equipping a decision centre to address issues arising from the proposed changes could cost around £100,000; the appointment of an information protection officer between £30,000 and £75,000 a year; and expanding the role of the tips Commissioner's Office within the UK to process additional data-protection work could place yet another cost burden on taxpayers.