Victory for tech giants on EU data laws

Last updated: October 25, 2013 7:57 pm

Victory for tech giants on EU data laws

By James Fontanella-Khan in Brussels

Google, Facebook and other US tech giants have won an important victory against EU efforts to restrict the sharing of customer data after UK Prime Minister David Cameron persuaded the bloc to postpone the introduction of tougher privacy rules by at least a year.

The climbdown is a blow to advocates of stricter data protection standards, especially as it comes amid an international scandal that has seen the US accused of snooping on EU leaders including German Chancellor Angela Merkel and millions of European citizens.

The delay will give US companies – as well as the Obama administration, which has been frantically lobbying for the reforms to be watered down – the opportunity to make their case more forcefully once the attention shifts away from the US spy scandal, said some EU officials and privacy advocates.

“It looks like we won,” said an executive at a large US tech company. “When we saw the story about Merkel’s phone being tapped and that 35 leaders’ phones were also compromised, we thought we were going to lose... Britain’s common sense prevailed.”

Tech lobbyists were alarmed this week when the European Parliament decided to amend the EU’s draft data privacy legislation to limit the US’s ability to obtain information on EU citizens. The measure had been stripped from the original proposal, made by the European Commission in January 2012, after intense lobbying from US officials.

US companies also want to scrap – or at least reduce – sanctions for breaching any new regulations, which could cost companies such as Google, Facebook and Amazon dearly. The parliament increased the fines originally proposed by the commission to 5 per cent of annual global revenues or €100m, whichever is greater.

Senior EU officials said Mr Cameron had spearheaded efforts to get the date moved to 2015. “They [the UK] don’t like the directive as it is,” said a top Brussels official. “It is burdensome, they say. They wanted to have a reference to more timely adoption. So the compromise was therefore the reference to 2015.”

Mr Cameron initially opposed setting any deadline but agreed to compromise on 2015 after France, Italy and Poland pushed for the proposal to be completed before European elections in May 2014.

Germany – to the surprise of many of the 28 leaders present at the meeting – did not take sides, said an EU diplomat, adding that Angela Merkel, German chancellor, “didn’t want to rush it”.

Ms Merkel on Wednesday accused the US of tapping her phone, prompting her to launch a separate initiative with France to renegotiate their intelligence services’ co-operation with Washington.

Britain has echoed the concerns of US tech groups that the legislation would create a conflict between American and European legislation as well as burden companies with unnecessary red-tape during a difficult economic recovery.

“The delay was demanded by the US, because they believe that they can get everything they want out of the ongoing trade discussions. So, it is both an opportunity to water down the proposals directly and also indirectly,” said Joe McNamee, director of European Digital Rights, a privacy campaign group.

One of David Cameron’s aides said on Friday that he had “no idea” whether the prime minister had discussed the data protection rules with Eric Schmidt, the chairman of Google, who sits on the prime minister’s business advisory board.

But he insisted that Google was “not the reason why” the prime minister had fought against early adoption of the rules. “As offered it contains huge extra burdens on businesses so there has to be some changes to it, that is why we got it removed.”

Herman Van Rompuy, the European Council president, said on Friday that several countries had been concerned that a rushed proposal could harm businesses that heavily depended on personal customer data.

“What is the problem?... It is a complex task not only related to the already difficult issues of protecting privacy but it also [has] an impact on business, so we have to study this carefully,” said Mr Van Rompuy.

Additional reporting by Elizabeth Rigby in London


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