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IP: Europe May Block Flow of Internet Data With US

From: [email protected]
Subject: IP: Europe May Block Flow of Internet Data With US
Date: Mon, 26 Oct 1998 09:45:04 -0600
To: [email protected]

Source:  Christian Science Monitor

International - Monday October 26, 1998 

Europe May Block Flow of Internet Data With US 
Peter Ford, Staff writer of The Christian Science Monitor 

PARIS -- Radically different American and European notions of privacy and
how to protect it are
threatening to curb the worldwide boom in electronic commerce. 

New European Union rules governing international transfers of personal data
over the Internet go
into effect today. They commit EU governments to strict new privacy
standards in electronic
databases storing citizens' personal details. And they oblige governments
to block data transfers to
countries that fail to uphold "adequate" privacy provisions. 

That, in the European Commission's view, includes the United States.

Year-long efforts by senior US negotiators to convince the EU otherwise
have shown how "in
Europe, privacy is seen as a human right ... while the Americans are saying
that the market should
look after it," says Christiaan van der Valk, an expert in electronic
privacy issues with the
Paris-based International Chamber of Commerce.

Unless European and US negotiators reach agreement, the EU directive "could
have pretty severe
long-term effects, hindering the extension of e-commerce and the
globalization of industry generally,"
warns IBM spokeswoman Armgard von Reden.

The new rules give European citizens the right to access personal data held
on them by private
corporations and to correct it if it is false. Individuals must give
consent to the processing of sensitive
data such as medical records or details of ethnicity.

Web-site operators routinely capture personal information about users who
visit their sites and sell it
to direct marketing companies and other clients. "Privacy safeguards in the
United States have not
kept up to date," argued Marc Rotenberg, a teacher of privacy law at
Georgetown University in
Washington, in testimony to the US House of Representatives earlier this year.

If data protection officials in European countries were to start forbidding
the transfer of personal
data to the US this week, or demanding individual notification of such
transfers from data
processors, "everything would grind to a halt," says Philip Jones,
assistant registrar at Britain's Data
Protection Registry, a government body.

Every day companies such as airlines, banks, and insurance firms transfer
millions of bits of
information - like names, addresses, and phone numbers - on clients or
potential customers. 

But "nobody is going to go down to some basement in European Union
headquarters to throw a
switch that will shut off all data flows on Monday morning," adds Professor

Only a handful of the 15 EU countries have passed the legislation to
implement the Commission's
directive. The Commission is still negotiating with the US on how the rules
will be enforced.

Washington, reluctant to legislate, is seeking EU approval for a voluntary
system. US companies
wishing to process Europeans' personal information would adhere to a set of
principles laid down
by the Department of Commerce. How they would be enforced, however, and how
citizens could seek redress for any grievances, is not yet clear.

Alternatively, US negotiators are suggesting companies could join systems
such as the Online
Privacy Alliance, set up by IBM and Time-Warner, among others. Members
commit themselves to
respect the alliance's privacy standards and to submit to checks by
Trust-e, an independent
verification organization.

Data-importing companies in the US could also sign contracts with the
exporter, pledging to treat
information with the same degree of confidentiality it would enjoy in
Europe. "Most global
companies are heading in this direction," says Ms. von Reden. 

EC officials were to meet European representatives today to discuss the
American proposals and
Washington's request for a 90-day extension of the application of the new
rules. Nobody expects
dramatic changes this week, but privacy activists are expected to test the
directive as soon as it
comes into force by laying a complaint against a high-profile company such
as Visa International or

At the moment, says one executive with an international financial services
group, "I am not sure that
anyone can say how this is all supposed to work in real life." 
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