EU members poised to back online privacy rules - Forge a “digital union”
June 14, 2015 3:54 pm
EU members poised to back online privacy rules
By Christian Oliver in Brussels
All 28 EU nations are today set to sign up to landmark
online privacy rules intended to protect consumers, despite fears from some
internet companies that the regulations will stifle ecommerce in Europe.
The rules, a keystone of attempts by Brussels to forge a
“digital union”, will create a pan-European framework for handling data, backed
up by the threat of heavy fines — possibly as much as €100m — for
non-compliance.
Věra Jourová, EU justice commissioner, said fragmented
data rules were a “barrier” to cross-border business. Complaints about the
intrusiveness of Google Street View drew widely different responses from national regulators between 2009 and 2011.
“This is a positive revolution: one set of rules
replacing 28,” Ms Jourová told the Financial Times.
An EU-wide framework would offer certainty to investors,
and tougher privacy guidelines would help restore consumer confidence in the
security of online transactions, she said.
It will be easier for consumers to withhold their data
and the “right to be forgotten” principle, whereby sensitive information is
removed from search queries, will be codified.
The rules will also seek to ensure that data submitted for
one purpose is not sold on to be used for another — for example health
information being passed to insurers. Breaches such as attacks by hackers will
have to be notified to regulators within 24 hours.
Once member states accept the package, a final text will
be hammered out with the European Parliament and European Commission. Ms
Jourová said this three-way process should be complete by the end of the year.
The size of fines is likely to prove a flashpoint between
member states and the European Parliament. MEPs are pushing for a maximum of 5
per cent of global revenue, with a €100m cap. Member states want 2 per cent or
€1m.
Critics have said the regulations and potentially large
fines will be unfair to small businesses, which would have to conduct the same
due diligence as larger companies and recruit compliance and other technical
staff.
Townsend Feehan, chief executive of IAB Europe, a digital
lobby group, said “draconian regulation” could drive smaller businesses out of
Europe.
Ms Jourová said small businesses had known the rules were
coming and would profit from them, while the package offered flexibility to
“microcompanies” whose data was not sensitive.
“Of course privacy costs something and I think many
companies, especially those doing their business on the internet, very well
understand that the way they protect data is a sign of how trustworthy they
are, and trust is something that drives the business,” she
Digital business groups and researchers oppose the plans.
Online advertisers have said their ability to harvest data and target customers
will be severely curtailed, undercutting the revenue streams of free websites.
Scientific and medical researchers have said potentially
life-saving work could be affected unless there is clarity on the rules about
data access. Ms Feehan said the regulations were “blunt and indiscriminate”.
While most aspects of the package have been agreed during
three difficult years of negotiation, questions remain about how it will
operate. Plans for a central regulatory authority have been watered down.
Instead the national regulators will have to reach a common position on
cross-border issues.
The advantage of this was that a Czech citizen concerned
about Facebook, for example, would not have to apply to Dublin, where the US
company bases its EU operations. “If the person infringing my privacy is in
another country, I can bring my complaint in my own country, in my own
language,” Ms Jourová said.
She conceded that 28 regulators trying to forge a common
line could give rise to complications and said there would be a four-year
review period to resolve practical problems.
Some countries have raised concerns that all the national
regulators are unlikely to be sufficiently well funded for their enlarged role.
Copyright The Financial Times Limited 2015.
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