New UK/US 'data bridge': What could it mean for small businesses?
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Posted: Fri 16th Jun 2023
The UK and the US governments have reached a commitment in principle to establish a new 'data bridge' with the aim of removing the red tape involved in data transfers by businesses.
Announced as part of British prime minister Rishi Sunak's latest visit to Washington, D.C. where he and President Biden unveiled the 'Atlantic Declaration' economic partnership, the UK government said:
"International data transfers are central to modern day business transactions, and the United States is one of the UK's leading trading partners in data-enabled exports. In 2021, 93% of the UK’s services exports were data-enabled, and the UK exported more than £79 billion of these services (about 30% of the UK's total data-enabled services exports) to the US.
"Despite this relationship, burdensome red tape is an inescapable part of the current arrangements. Most UK businesses who want to send personal data to a service provider or company in the United States must have costly contract clauses in place to ensure protection and privacy standards are maintained.
"A data bridge would remove that burden, speeding up processes for businesses, reducing costs, and increasing opportunity by making it easier for British businesses to operate and trade internationally."
If approved, the data bridge would be the UK extension to the EU-US Data Privacy Framework, an opt-in certification scheme for US companies, enforced by the Federal Trade Commission and Department of Transportation, and administered by the Department of Commerce.
Science, innovation and technology secretary Chloe Smith said:
"This commitment in principle is the result of two years of positive and productive discussions with the United States. Data bridges not only offer simpler avenues for the safe transfer of personal data between countries, but also remove red tape for businesses of all sizes and allow them to access new markets.
"International collaboration is key to our science and technology superpower ambitions, and working with global partners like the United States ensures we can open new opportunities to grow our innovation economy."
How the data bridge could impact UK small businesses
The announcement received a positive response from many experts.
Kristy Gouldsmith, data protection, privacy and cybersecurity partner at law firm Spencer West, told Enterprise Nation:
"A 'data bridge' between the UK and the USA would be a good thing for businesses as they could freely transfer personal data to recipients in the United States without needing to take any additional steps such as entering into an International Data Transfer Agreement or carrying out transfer risk assessments."
Becky White, senior data protection and privacy solicitor at Harper James, also said the agreement is "welcome news" for UK and US businesses and "should mean that the process of contracting with suppliers or customers in the US becomes much more straightforward and less time consuming for UK businesses".
However, White added that the UK government have key hurdles to address before the data bridge can be officially implemented. She said:
"Firstly, it will depend on the US designation of the UK as a qualifying state under President Biden's Executive Order 14086 (which established data protection safeguards for US signals intelligence agencies).
"In addition the UK government's proposed Data Protection and Digital Information Bill (DPDI 2) is fairly close to enactment and although the government continues to assert that the planned changes to the UK data protection regime will not jeopardise EU adequacy, no confirmation of that has been made by the EU.
"If the UK/EU adequacy decision is overturned by the enactment of DPDI 2, this may in turn impact the implementation of the UK-US data bridge which is broadly seen as an extension to the EU-US data privacy framework currently being assessed and an alignment of the position under the UK GDPR with the EU GDPR for data transfers from the UK to US organisations that certify for the scheme. UK businesses should not be cracking open the champagne just yet, it's more a case of 'watch this space'!"
Annabel Kaye runs KoffeeKlatch which helps small businesses with GDPR and contracts. She said that although the UK/US data bridge is aimed at tackling red tape, it must still make sense for small companies:
"We look forward to seeing the details of how this will work as often the bureaucracy is tricky for small business and not well thought through. Our micro business clients in the service sector often get bamboozled by the jargon.
"We also hope this will not trigger a negative review of our adequacy status on the EU list given that the EU has not yet signed its US agreements and they may not be aligned."
Relevant Enterprise Nation resources
Enterprise Nation’s Go Global international trade hub
Selling to customers in the US – A guide for small businesses in the UK
Book a free discovery call with international trade and data experts
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