Company executives in China and Southeast Asia are more confident than their European counterparts when it comes to how ready they are to face stricter rules over the use of consumer data, according to a new study by The Economist Intelligence Unit.
American executives, however, believe they are the most prepared to tackle the challenges of rapidly evolving data-privacy regulations despite differing approaches "across states and industry sectors," according to the survey.
On a 1-to-10 scale, US executives scored an average 8.04 rating in terms of preparedness to face new rules, compared with a 7.42 rating among Southeast Asian executives and a 7.35 rating for those in China. Western European executives had a 6.69 rating, according to the study.
The report comes after Europe enacted some of the strictest privacy rules worldwide, in the form of the EU General Data Protection Regulation (GDPR), which went into effect last May. Some American websites, including media organisations, have blocked access to European users rather than comply with the new data requirements.
Google was fined Euro50 million (US$57 million) by a French watchdog in January for violating data protection laws, the biggest fine so far under the new regulations.
France fines Google US$57 million for breaking data privacy rules
"Businesses need to be aware that playing fast and loose with consumer data can lead to major repercussions down the road," said Michael Gold, the report's editor. "Smart, well-coordinated regulations can make the business world more transparent and trustworthy amid a growing realisation that data is truly the 'new oil' in today's economy."
The study, sponsored by Ant Financial, is based on a survey of 250 executives conducted between October and December of last year. Ant Financial is an affiliate of Alibaba Group Holding, the parent company of the South China Morning Post.
In a recent column in Time magazine, Apple chief executive Tim Cook called for US lawmakers to pass comprehensive privacy legislation, similar to the GDPR, that gives consumers greater control over their data.
Despite the concerns about the GDPR, the study's authors said the new European regulations may be having less of an effect than many had expected.
The survey found that 71 per cent of European executives believed that data privacy was "very important" to their organisation, as compared with 79 per cent of those from all regions.
Among European executives, only 38 per cent believed it would be much more important in three years' time, according to the study. That compared with 54 per cent of executives surveyed in all regions.
Overall, executives were most concerned about the lack of clarity over consumer rights from region to region, particularly when it comes to portability of data.
As a result, multinational companies are increasingly lobbying for coordinated regulations to allow data to more easily flow between business units in different geographies, the study said.
"I think there is a realisation that diverse laws make it complicated to transfer data across jurisdictions," Simon Chesterman, the dean of the National University of Singapore Faculty of Law, told the study.
Regulations that are not keeping pace with technological advances, and uneven enforcement were among the top concerns of the executives surveyed.
China's tech giants struggle with data privacy amid push into US
More than 98 per cent of Chinese executives said data privacy would be a key to good corporate governance in the future, according to the study.
About 88 per cent of Southeast Asian executives and 87 per cent of US executives said data privacy would be important to future good corporate governance. Of those surveyed 80.9 per cent of Western European executives said that it would be important in the future.
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