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To: Henry Volquardsen who wrote (947)	10/29/1998 1:19:00 PM
From: Chip McVickar	Read Replies (1) \| Respond to of 3536

Henry, I thought your Libertarian instincts would enjoy this: U.S. Firms Fear Privacy Plan By DAVID E. KALISH .c The Associated Press NEW YORK (AP) -- To get an idea of why U.S. companies are fretting about a new European Union law to protect personal privacy, consider the trans-Atlantic woes hitting the American Airlines computer reservation system. A court in Sweden has barred AMR Corp., the airline's parent, from transmitting personal details about travelers there, such as what type of plane meal they prefer, to its Sabre reservation system in the United States. The prohibition was suspended while AMR pursues an appeal, but it gives a preview of the snags that could hit U.S. companies as a result of a far more sweeping European privacy protection measure that took effect on Monday. U.S. firms from global drug makers to direct marketers doing business in Europe fear the new directive could bar them from using customers' confidential information for everything from valuable scientific research to junk mail, stifling business commerce. The U.S. reaction illuminates a widening rift between corporate thirst for personal data and people's fear that the information will be misused. The European clampdown was sparked by concern firms increasingly are compromising people's privacy by selling their confidential details, such as ages, buying habits and income brackets, to marketers that use it to try to peddle products. So far, the law hasn't changed much. Sanctions, which include barring the export of data, have been suspended while U.S. and European negotiators meet to try to resolve differences between how Europe and the United States regulate information-hungry corporations and view privacy rights of individuals. But the threat to U.S. trade persists. ''If there's action taken against our companies, then we'll fight it in the strongest way,'' said Ira Magaziner, the White House adviser on the Internet who is helping to coordinate the talks. ''It would hurt us as much as it would hurt them. This would be a major obstruction to trade,'' he said. At the heart of the dispute is a key provision that would bar any company doing business in the European Union from transmitting personal data to any country that does not have adequate privacy protections, similar to Europe's. Compared to Europe's standards, U.S. controls on information use are relatively lax. European nations require companies to tell customers when they plan to sell their personal information to other firms. While some industry groups in the U.S. encourage companies to keep customers informed, the guidelines are voluntary. Moreover, firms here maintain that relatively unfettered ability to use personal information about consumers is essential to their businesses. In recent years, an entire industry has sprung up around the purchase and sale of personal information, particularly across the Internet. ''Standard U.S. practice is often to buy lists or sell lists without notice to the customer,'' said Peter Swire, a law professor at Ohio State University. ''To comply with European-style rules, the direct marketing industry would have to change its routine procedures and give a lot more notice about what it does.'' But companies, who are still sorting through the law's implications, also worry they could be hurt in unintended ways. For example, drug makers complain that a European nation could prevent them from collecting scientific data about patients that are essential to conducting research studies. Some experts said the fear is overblown. But it also reflects uncertainty over the law's broad and somewhat vague provisions, which each European nation is required to implement by enacting its own law. The European regulations already have been adopted in Greece and Portugal and are being implemented in Britain, Sweden and Italy along with additional rules. They will gradually be put into effect in the other EU nations. Robert Gellman, a privacy consultant based in Washington D.C., said the sharp U.S. reaction raised questions about the true commitment of companies to protecting consumers' privacy. If companies were truly committed, wouldn't they want to strengthen protections in the United States? he asked. ''Why is it you don't want to give those protections to consumers in the U.S.? Why are U.S. citizens second-class citizens when it comes to privacy?'' Gellman said. AP-NY-10-28-98 1818EST