EU in Conflict with Technology Companies: New Laws for Europe, New Sanctions for China

Executives from five leading European technology companies have urged Brussels to amend the proposed data-sharing law, as the new rules will force them to relinquish trade secrets and give a competitive advantage to China, according to the Financial Times.

The intervention by the leaders of SAP, Brainlab, Datey, Siemens, and Siemens Healthineers is the latest response from technology companies to the new law as part of a digital rules package aimed at ensuring the European Union’s competitive edge in data access.

In a letter to European Commission President Ursula von der Leyen, the executives of the technology companies are seeking amendments to the proposal that obliges companies to share data with users, other companies, and governments, which could ’cause lasting damage to the competitiveness of some of the most successful European companies that employ millions of people’.

The letter, backed by the business group DigitalEurope, was also sent to Margrethe Vestager, who serves as the European Commissioner for Competition, Thierry Breton, who is responsible for implementing the bloc’s digital rules, and the Swedish presidency of the EU.

– The Internet of Things is an area where European companies lead. Companies have spent years investing in research and development, developing data-driven products and services – representatives of the sector conveyed to the European Union authorities.

Stefan Vilsmeier, CEO of the health technology group Brainlab, stated that the plans will force companies to disclose too much business information and ‘weaken the European economy in competition with others, especially China’.

Bernd Montag, CEO of Siemens Healthineers, a medical device company, said that the proposal would override security requirements for their products.

– Both patients and healthcare professionals could be harmed if malicious entities tamper with the safety or quality of medical devices – he said.

The letter comes at a time when member states and lawmakers are arguing over ‘unresolved political issues’, according to a progress report on the Swedish presidency’s plan for the EU. These issues include restrictions on data use by institutions such as the European Commission, the exclusion of small businesses, and data sharing in emergencies. Nevertheless, Sweden hopes to reach a common position among member states by June 27, as stated in the document. For the draft law to be approved, they and the European Parliament must agree on the final text.

Cecilia Bonefeld-Dahl, Director General of DigitalEurope, called for a delay, stating that it seems like ‘we are racing through the legislative process like a runaway train’.

Sanctions for Cooperation with Russia

Companies and associations have already issued a joint statement condemning the Data Act as a ‘leap into the unknown‘. This month, the Global Data Alliance, an association of companies promoting high standards for data transfer, called on regulators to clarify ambiguities in the draft law.

– Every time I put a new law into the digital sphere, businesses start to worry – Breton told the FT in February, adding that the new law would help build the European ‘data market that we have lacked in the past’.

Other data rules imposed by the EU have also sparked outrage among companies. The significant Digital Markets Act, aimed at curbing the power of big tech, also emphasizes large players sharing data with smaller rivals. Companies like Google and Amazon are in discussions with the Commission about how to comply with the prescribed rules.

The European Union has also proposed sanctions against a group of Chinese companies accused of selling electronic components to Russia. This is part of a new sanctions package that member states will discuss this week, which plans to penalize seven Chinese companies; 3HC Semiconductors, King-Pai Technology, Sinno Electronics, Sigma Technology, Asia Pacific Links, Tordan Industry, and Alpha Trading Investments, reports Hina.

In addition to companies, the list is expected to include certain Russian legal entities responsible for the development, production, and delivery of electronic components to the Russian military and industrial complex, which the EU has now taken ‘to task’, for which the Chinese Ministry of Foreign Affairs has warned not to choose the ‘wrong path’ as they could also impose certain measures.

– China opposes moves that use cooperation between China and Russia as an excuse to impose illegal sanctions or for extraterritorial punishment of China – said a spokesperson for the Chinese ministry at a regular press conference.