Cross-border data flow in the digital single market: study on data location restrictions (SMART 2015/0054) infrastructure in their territory in order to supply the services in question, which would have been more directly relevant. However, a correct application of these principles would lead to the conclusion that data location restrictions – or more broadly: legal requirements that affect the free flow of data – in relation to specific services – understood as services usually required against remuneration, as provided by the Treaty and the Services Directive - can be legitimate only to the extent that these requirements are objectively justified by an overriding reason relating to the public interest, and that they are proportional in the light of this public interest objective. Applied logically and consistently, this should imply that such restrictions should be identified by Member States, and that the policy objective should be explicitly stated, explaining why the policy objective constitutes an overriding reason that can only be achieved through the imposed restriction. In the absence of this approach, the necessity and proportionality test could not be applied. In such cases and to that extent, a data location restriction could be justified and the free flow of data could be legitimately impeded. Examples would include police databases, classified information, and official registers – none of which would be considered as an element of a ‘service’ under the Treaty, since (and to the extent that) they are a part of government functions which are not provided for remuneration. When such a justification could not be provided, the requirement must be recast into a functional requirement. 5.3.2. Recasting regulations to support the free flow of data Once it has been determined that data should fall within the remit of the free flow of data policy – either as a logical consequence of the application of the Treaties, the Services Directive or the e-Commerce Directive, or as a part of a future Free Movement of Data right that could be construed along the principles outlined above – any legal requirements in relation to the data would need to be recast in accordance with the functional requirements translation table provided above. It should however be recognised that this is not a trivial exercise. It implies the screening and simplification of national laws – a similar exercise to what was also required by the implementation of the Services Directive73 - but more importantly it can also require the establishment of coordination and harmonisation mechanisms between the Member States in order to establish any technical or organisational requirements that may be relevant for specific data types. These will likely vary from sector to sector. Examples of the need for such coordination and harmonisation mechanisms can be drawn from the functional requirements translation table, in combination with the data from the identified national restrictions: Figure 39 – Policy objectives and harmonisation needs Policy objective 73
Need for coordination and harmonisation?
See the Commission’s guidance on simplification in the Handbook on implementation of the Services Directive; http://bookshop.europa.eu/en/handbook-on-implementation-of-the-services-directive-pbKM7807096/; Chapters 5 (on simplification) and 7 (on permissible limitations to the free movement of services) are particularly salient.
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