Monday, February 11, 2013

US fights EU on data privacy law, says EU should respect US right to regulate

For the life of me I cannot understand the FT's headline, which reads "Brussels fights US data privacy push."  No, it's the US sending a team of lobbyists to fight against EU regulation--the penultimate sentence of the article even labels this "aggressive lobbying."

Why are the US lobby troops going into battle? Because the EU seeks to impose a fine of 2% of global annual revenues for any company, anywhere in the world, that violates the data rights accorded to EU citizens. US lobbyists and a sympathetic administration seem all too eager to push other countries to ease up on their regulatory burdens on US companies, so it is not surprising to see them in full force against the EU parliament here. But this effort is especially rich given that it comes at the very moment that the US is seeking to impose a fine of 30% on any company, anywhere in the word, that violates its own data sharing requirements. From the story:

Viviane Reding, EU commissioner for justice, said that the EU was determined to respond decisively to any attempts by US lobbyists – many working for large tech groups such as Google and Facebook – to curb the EU data protection law.

“Data protection is a fundamental right in Europe which is clearly enshrined in the Charter of Fundamental Rights. Whilst this may not be the case in other parts of the world, one thing is clear: if companies want to tap into the European market they have to apply European standards.” 
Ms Reding’s firm approach is likely to spark a diplomatic battle between Brussels and Washington, which has actively been trying to water down the EU’s tough new privacy legislation by handing US companies a de facto exemption from it. 
“Europe, the United States and other democracies around the world share many of the same values,” said William Kennard, US ambassador to the EU at a conference on European data protection and privacy. “We need to accept that each of these democracies has the right to choose whatever legal framework is suited best for them to defend and protect those values.”
Translation: respect our sovereign authority to write the laws we want to write to regulate our companies; don't use sanctions or threat of sanctions to force our companies to abide by your laws.  Or, do that to other countries, but give us an exemption because we're good guys that share your values.  Further:
US tech companies are trying to shield themselves from the legislation as they argue that it would be unfair for them to be subject to EU laws that are too stringent and could result in expensive administrative burdens and hefty fines for errant companies.
So here we have a US ambassador stating the cause for US companies that complain of the "unfairness" of stringent and expensive compliance costs backed by hefty penalties for noncompliance. The EU's position is, we are trying to protect our people wherever they go in the global market. The world is our jurisdiction to the extent it impacts the people we call "ours," and we aim to protect our people.

Are we not coming to a place where it is becoming obvious that global markets cannot peacefully co-exist with autonomous states?  Not one world government at all but instead an impenetrable mass of overlapping and conflicting regulatory states, a venn diagram of massive and chaotic proportions, and no possible way for anyone to comply with all of it.  Stock tip: invest in data compliance companies, they might be the most important drivers of the global economy in the near future.


  1. Interesting and related news:

    The Federal Conservatives just announced that they are dropping their plans for a big “E-Snooping” Bill. More below:

    We’ve listened to the concerns of Canadians,” Justice Minister Rob Nicholson told reporters outside the House of Commons on Monday.

    He said that “we will not be proceeding with Bill C-30. And any attempts to modernize the criminal code will not contain …warrantless mandatory disclosure of basic subscriber information or the requirement for telecommunications service providers to build intercept capability within their systems.”

    Instead, the government has carved out a sliver of the bill to ensure warrantless wiretaps during emergencies remain legal.

    “We are immensely relieved,” said Chantal Bernier, the federal assistant privacy commissioner. She said the government’s reversal “is the result of the recognition of the fundamental right to privacy of Canadians, and also of their attachment to it.”

    Bill C-30 caused a furor when it was introduced a year ago this week. The legislation would have permitted police and other government officials to compel Internet service providers to disclose identifying information linked to clients’ ISP addresses without a warrant.

    I wonder how they will justify a FATCA IGA in light of the back down.(And o'h by the way it is a badly kept secret that Ottawa was facing enourmous pressure from both the US and the EU to pass such legislation which is now apparently dead)

  2. Well, US Persons who are bone fide r├ęsidents abroad should get an exemption from FATCA. I am always flabbergasted by the fact that US corporations get special priveledges such as being allowed to keep their profits abroad and pay only upon repatriation.

    I am glad Allison found this article, we also have a discussion on it at IBS: