The existing European legal framework has various impacts on innovative business models. While the European legal framework is designed to increase the level of privacy, its impacts on business models can be counterproductive for achieving this goal. In particular, unequal implementation and interpretation of rules of the existing European framework can hamper innovativeness for products and services produced and offered within Europe; as a consequence, products and services from outside Europe dominate the European market. This, however, decreases the level of data protection. Both factors – the domination of companies based outside the EU and the decreased level of data protection – are benefitted by a lack of efficient enforcement of data protection rules against companies based outside the EU, putting European companies at a disadvantage.
One important aspect to foster innovativeness in Europe is harmonisation. Harmonisation could reduce the risk of hampering innovation as companies would not have to consider many different legislations, and therefore reduce trade obstacles within Europe. In this regard, the upcoming data protection reform package can be seen as a step forward.