Share This Article
Privacy vs innovation and competitiveness is no longer a theoretical debate—it is becoming one of the defining policy tensions shaping the future of the European economy.
I recently had the opportunity to reflect on this during a panel at the Privacy Symposium in Venice, chaired by Luca Bolognini, alongside Giovanni Guzzetta, Diego Fulco, Stefan Brink and Stefano Leucci.
What emerged from that discussion is something many of us have been sensing for some time, but perhaps have not articulated clearly enough: the balance between privacy, innovation and competitiveness in Europe is increasingly fragile—and arguably skewed.
Privacy vs Innovation and Competitiveness: A Structural Imbalance
At the core of the privacy vs innovation and competitiveness debate lies a structural issue. The current European data protection framework is designed, very effectively, to protect fundamental rights. That is its strength, and rightly so.
But innovation is not treated as a value of equal weight within that framework.
This creates a tension that is often resolved in a predictable way: when privacy and innovation collide, privacy tends to prevail. Not necessarily because it should in every case, but because the legal architecture is built that way.
The result is not just a legal outcome. It is an economic one.
If innovation is consistently treated as a secondary consideration, the system risks producing unintended consequences:
- slower technological development
- reduced attractiveness for investment
- fragmentation in digital markets
- competitive disadvantages for European companies
And ultimately, these effects are not borne by businesses alone—they affect individuals as well.
Fundamental Rights: Static Protection or Evolving Concept?
One of the most interesting points raised during the discussion was how we conceptualise fundamental rights in this context.
Too often, fundamental rights are framed as something to be protected against innovation. This framing implicitly positions innovation as a threat, rather than as a potential enabler of those same rights.
But this perspective may be too narrow.
Fundamental rights have never been static. They evolve alongside society, technology, and economic structures. The right to privacy itself has adapted over time—so why should the relationship between privacy and innovation remain fixed?
Reframing the debate could lead to a more nuanced approach: not privacy versus innovation, but privacy through innovation.
The Missing Piece: A “Right to Innovation”?
A concept that is gaining traction—and was actively debated during the panel—is the idea of a “right to innovation.”
This is often misunderstood. It is not about giving companies a free pass to innovate without constraints. Nor is it about weakening existing protections.
Rather, it is about recognising that individuals should have the right to access and benefit from innovation.
This shift in perspective is critical.
If regulatory frameworks overly restrict innovation, the consequence is not just reduced corporate growth. It is reduced societal progress:
- fewer advanced healthcare solutions
- less efficient digital services
- slower adoption of AI-driven tools
- diminished global competitiveness
In other words, protecting individuals in theory may end up disadvantaging them in practice.
Regulatory Fragmentation: When Rules Don’t Speak the Same Language
Another issue that clearly emerged is the growing fragmentation within the European regulatory landscape.
On one side, initiatives such as the Data Act aim to promote data sharing and unlock value. On the other, data protection rules impose strict limitations on how data can be accessed and used.
Similarly, broader policy efforts, often discussed under initiatives like a potential European Innovation framework, do not always align with instruments such as the Digital Omnibus or the GDPR.
This lack of coherence creates uncertainty for businesses.
Take the concept of “free” data sharing under the Data Act. In theory, it promotes access. In practice, however, data sharing is rarely free for businesses
- it involves infrastructure costs
- compliance burdens
- cybersecurity risks
- contractual complexities
Ignoring these realities risks turning policy objectives into operational challenges.
The Real Issue: Who Bears the Cost?
One of the most overlooked aspects of the privacy vs innovation and competitiveness debate is cost allocation.
Regulation does not eliminate risk, it redistributes it.
When businesses face increasing regulatory burdens, those costs do not disappear. They are absorbed, mitigated, or passed on:
- through higher prices
- reduced investment
- limited service offerings
- or slower innovation cycles
Ultimately, citizens pay the price.
This is why the debate cannot remain purely legal. It is economic, strategic, and societal.
A Call for a More Mature Approach
What came out clearly from the panel, and I fully agree with this, is that the current approach needs to evolve.
This does not mean weakening privacy protections. That would be the wrong conclusion.
It means:
- breaking regulatory silos between different legal frameworks
- improving dialogue between regulators and industry
- increasing technical and economic understanding within authorities
- adopting a more outcome-based approach to regulation
In short, we need a system that is capable of managing trade-offs, rather than avoiding them.
Rebalancing Without Compromising
The privacy vs innovation and competitiveness debate is not about choosing one over the other.
It is about recognising that an imbalance in either direction creates risks.
Over-protection can be just as problematic as under-protection—especially when it leads to reduced competitiveness and fewer opportunities for the very individuals the system is designed to protect.
The real challenge is governance.
Who should decide how this balance is struck? Regulators alone? Courts? Policymakers? Or should there be a more dynamic, multi-stakeholder approach?
There is no easy answer. But one thing is clear: maintaining the current trajectory without rethinking the balance may come at a cost Europe can no longer afford.
On a similar topic, you can read the article “The Italian Garante Sets (Almost) No Limits to Former Employees’ Email Access“.