EU and U.S. edge towards data privacy accord

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February 23, 2000
Web posted at: 3:10 p.m. EST (2010 GMT)

by Elizabeth de Bony

BRUSSELS (IDG) -- U.S. and European Union negotiators have reached a tentative agreement on data privacy, but the need to sell the deal now to the 15 member states forced them to cautiously speak only about progress and breakthroughs during a press conference Tuesday, well-informed sources say.

After eight hours of bilateral talks, David Aaron, Under Secretary of Commerce for International Trade, and John Mogg, Director General of the Commission's Internal Market, did announce a major breakthrough on enforcement, but for the most part their introductory comments focused on the remaining procedural steps that have to be fulfilled prior to a formal agreement. This includes fine-tuning the text so that it clearly reflects their verbal agreements.

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"It is a question of putting into the text the language of our accord," Aaron said.

Mogg must now win backing for the deal from the full European Commission, which will then ask the Member States and the European Parliament to endorse it rapidly.

The negotiators emphasized the need to complete the agreement by the end of March, when Aaron leaves his position in government and the electoral circus in Washington heats up.

"We cannot promise to negotiate in good faith after March," a U.S. official who asked not to be identified admitted, referring to the departure of Aaron, who has led the talks for over two years, and to the upcoming U.S. Presidential elections in November.

Speed is also important, Aaron explained, because now that U.S. companies are finished with the Y2K problem, they are turning their attention to data privacy.

"They are making investments now so they need our advice as to how to go about doing it. So an agreement is urgent for us in the U.S.," Aaron said.

The agreement on enforcement will mean that the U.S. Department of Commerce will keep a list of companies and organizations that adhere to the safe harbor principles. Those companies will benefit from an EU ruling, expected by mid-year, classifying the U.S. self-regulatory system as representing adequate standards of data protection.

"The risk we saw of an organization being unjustifiably listed is negligible," Mogg said.

The two also agreed on the sanctions that companies face if they fail to fulfill the safe harbor standards.

One of the most powerful, Aaron explained, is that "in the U.S. if a company says it has adopted the safe harbor principles and doesn't, this is a deceptive business practice, which is a crime."

Senior U.S. and European officials have sought a solution to this simmering problem ever since the European Union introduced its data privacy directive in October 1998. This directive seeks to eliminate national barriers to the transmission of data among the 15 member states by ensuring high standards of data protection.

The source of the transatlantic problem lies in the directive's provisions which stipulate that in order to allow data transmissions to countries outside the EU, that country must introduce adequate standards of protection.

The transatlantic talks have sought to determine whether the U.S.'s self-regulatory approach to data privacy based on safe harbor principles meets the EU's legislated standards.

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United States walks data-privacy tightrope during EU talks
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U.S. Department of Commerce
European Union

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