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Digital Business Lawyer
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Denmark creates Ambassador for the digital age

Countries are increasingly focusing on how to attract tech companies to reap tax and employment benefits, and those companies are increasingly interested in influencing the regulatory conditions they are exposed to. In light of this, Denmark has become the first country in the world to create a new diplomatic position - the Ambassador for Technology and Digitalisation - to engage with global technology companies in order to better tailor the regulatory environment. In this article, Lasse Søndergaard Christensen and David Telyas, of Gorrissen Federspiel, shed light on the potential regulatory benefits associated with this new position.

Artificial intelligence, Big Data, machine learning, Internet of Things, blockchain, robots, and driverless cars - the pace of digital technology and the so-called fourth industrial revolution - creates opportunities for businesses and countries alike. On 24 May 2017, the Danish Foreign Minister, Anders Samuelsen, appointed Casper Klynge as Denmark’s Ambassador for Technology and Digitalisation (‘Tech Ambassador’) - the very first of its kind. In this context, Samuelsen emphasised that:

“Technology and digitisation is global in its essence, and it has a profound impact on all aspects of our society. The Tech Ambassador will spearhead our efforts to establish a more comprehensive dialogue with a broad spectrum of tech actors - companies, research institutions, countries, cities and organisations1.”

Casper Klynge’s quite comprehensive resume underlines that the Tech Ambassador role is not meant to be purely symbolic. He has broad international experience from the Ministry of Foreign Affairs (as the former Danish Ambassador to Indonesia and Cyprus) as well as in international organisations. Klynge also holds a Master’s degree in Political Science and International Relations and has been actively engaged in the tech and digitisation agenda.

‘TechPlomacy’

As a part of the Danish Government’s Foreign and Security Policy Strategy 2017-2018 a new so-called ‘TechPlomacy’ initiative was launched and with it the Tech Ambassador role was born. The TechPlomacy initiative, amongst others, aims to establish close ties with tech companies in order to get a better understanding of global developments and the regulatory areas of importance in respect to attracting businesses within the technology sector. Danish interests and values are also on the agenda.

In recent years Denmark has with some success strived to adapt both infrastructure and regulatory conditions to attract new businesses and investments in Denmark. Facebook and Apple have recently announced that they will establish large data centres in Denmark. Similarly, Google has announced its purchase of a land plot for a proposed data centre. Such investments indicate that Denmark is already on the radar of the world’s biggest tech companies due to favourable conditions, such as a reliable power grid and the availability of green energy from wind turbines as well as biomass2. Further, Denmark ranks first in the Digital Economy and Society Index 20173, a composite index that summarises relevant indicators on Europe’s digital performance and tracks the evolution of EU Member States in digital competitiveness. Recently, Denmark made significant progress in the use of digital technologies by enterprises and by citizens, leading the EU and the world rankings. These developments have likely motivated the appointment of the Tech Ambassador in an attempt to stay ahead of the competition in respect of attracting tech companies.

A two-way street

The Danish Tech Ambassador is based in Silicon Valley, California - which is still the world’s technological centre for innovation - but he has a mandate to attend to the global tech agenda. The primary role of the Tech Ambassador is to proactively engage with today and tomorrow’s technology companies, universities and organisations in order to (amongst other things) exchange views, listen to concerns and discuss any actual or perceived regulatory challenges faced by technology innovators. While details on the specific success criteria are limited at this time, the overall aim seems to be, through such dialogue, to emphasise what Denmark ‘can offer,’ and receive the feedback needed in order for the Tech Ambassador to enable the Danish Government (and public authorities) to adapt regulatory conditions to better meet the ‘real-life’ needs of the technology sector.

The regulatory benefit

The new data protection regime in the EU serves well as a backdrop against which to shed light on the potential regulatory benefits of having a Tech Ambassador. Since the General Data Protection Regulation (‘GDPR’) impacts all companies doing business in the EU it is likely to be a hot topic on the Tech Ambassador’s agenda. According to the Danish Ministry of Foreign Affairs, more than half of the data in the world has been created or collected in the past two years. This development has largely been driven by global tech companies such as Facebook, Apple and Google - revitalising the saying that ‘information is king.’ Indeed, by some standards these companies arguably are more influential and powerful than many nations in the world. This underlines the need for an ambassador. With the increase in volume and the ever-increasing sophistication of data analysis, including in respect of personal data, allowing for detailed profiling, the need to protect the fundamental rights and freedoms of individuals has been high on the EU agenda. To this effect the GDPR, which will take effect from 25 May 2018, has as its overall objective ‘to give citizens back control over of their personal data, and to simplify the regulatory environment for business,’ by ensuring consistent rules across the EU4. While the GDPR is meant to promote consistency it still (somewhat unusually for a regulation) leaves room for Member States to adopt special rules in certain areas, and Denmark has done so in relation to for example social security numbers and marketing. Also, many of the provisions in the GDPR leave room for interpretation - at least until the Court of Justice of the European Union gets the opportunity to rule on them.

In order not to quell innovation and to stay ahead of the competition in respect of attracting business, Denmark and other EU Member States have an interest in striking the right balance between data protection and the freedom to operate a business that brings new products and services to market that are valued by consumers, even if they rely on the processing of personal data: telematics-based insurance schemes and internet connected devices which react to user behaviour are good examples of this. In order to ensure that such new products and services will be compliant with EU legislation and lobby for what they believe to be more business-friendly interpretations, businesses also have an interest in effective dialogue. Of course, this does not only apply in relation to data protection, but in general, including in respect to taxation and corporate law.

It follows that the Tech Ambassador could turn out to be an important driver in aligning Danish interests with those of the US-based businesses that he frequents. As noted above, finding the right balance is crucial and in respect of the GDPR the Tech Ambassador’s close ties with industry may enable him to proactively facilitate the exchange of views and information about where the market is heading. This in turn may allow the relevant Danish (and perhaps indirectly, European) authorities to ‘stay on top’ by adopting interpretations and guidance that reflect genuine business needs and real-life scenarios without compromising (too much) on data protection. By way of example, the Article 29 Working Party, consisting of representatives from the national data protection authorities, seeks to harmonise the application of data protection rules throughout the European Union and to this effect publishes guidelines and recommendations on various data protection topics. The national data protection authorities, including the Danish ‘Datatilsynet,’ do the same.

In our experience many tech companies find it difficult to apply some of these guidelines to complex real-life business cases and there is a tendency to leave ‘grey areas’ untouched. For example, the ‘core activity’ concept is key to determining whether a Data Protection Officer must be appointed pursuant to the GDPR, as the guidance published so far only discusses the extremes and not many scenarios in between. The direct link between the Tech Ambassador and the authorities may act to increase the likelihood of relevant guidance being published. In general this dialogue also has the potential to ensure faster adaptation of ‘tech-tailored’ legislation, as the Tech Ambassador can bring technology awareness to the authorities that would otherwise have been out of sync with the market. Tech companies may also gain a better understanding of government priorities. By way of example, Uber launched its business in Denmark in 2014. However, the Danish legal framework was incompatible with Uber’s business model and as a result Uber’s services were ruled to be illegal. Perhaps this unfortunate situation could have been avoided had the Tech Ambassador been able to engage in dialogue with the Danish legislator and Uber before it entered the Danish market, since this could either i) have prompted the adaption of legislation not in conflict with the Uber business model, or ii) resulted in a warning to Uber that the current rules would pose a problem.

Is the Tech Ambassador here to stay?

Technological disruption is upon us and with increasing pace. Eventually all traditional businesses and governments may need to adapt. Nations and the international society will accordingly have to strike the right balance between fast-paced technological evolution and a regulatory regime that may slow this development to the benefit of individuals, including in respect of data protection. The Tech Ambassador arguably could help by providing the insights needed to enable the Danish Government to better adopt regulatory conditions that strike such a balance to the benefit of all. If successful (and perhaps regardless of this development) it seems likely that other countries will also increase their focus on company-aimed diplomacy - not least because it may be seen as a competitive factor in respect of attracting the business successes of tomorrow.

Lasse Søndergaard Christensen Partner

lsc@gorrissenfederspiel.com

David Telyas Legal Advisor

Gorrissen Federspiel, Århus

1. http://um.dk/en/news/newsdisplaypage.aspx?newsid=60eaf005-9f87-46f8-922a-1cf20c5b527a

2. http://www.investindk.com/Clusters/Cleantech/Data-Centres

3. https://ec.europa.eu/digital-single-market/en/desi

4. http://ec.europa.eu/justice/data-protection/index_en.htm

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