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To: EPS who wrote (26316)	3/27/1999 10:51:00 AM
From: EPS	Read Replies (1) \| Respond to of 42771

Companies Resist U.S. Proposals on Privacy By Robert O'Harrow Washington Post Staff Writer Tuesday, March 16, 1999; Page E1 America Online Inc., Walt Disney Co. and several other large U.S. companies have balked at proposed Commerce Department guidelines for complying with new privacy rules in Europe, a development that could unsettle talks about the issue today between U.S. and European officials. The companies have indicated they will not endorse the Commerce plan until they know more about what it will cost to implement, how it will be enforced and whether it will serve as a model for restrictive legislation in the United States. Commerce officials have been negotiating with their counterparts in the European Commission to come up with a "safe harbor" agreement that would allow the continued free flow of personal information about Europeans to U.S. companies. Under laws that took effect last fall, the 15 European Union member countries must prohibit the transmission of names, addresses and other personal data to any country with regulations that fail to provide adequate data protection. European officials have said the United States probably does not meet those standards. The lack of clear support for Commerce's current approach became apparent in meetings with company and government officials over the past two weeks and threatens to make it harder for the Clinton administration to convince European privacy officials that U.S. companies are intent on fulfilling the spirit of the new laws. Both U.S. and European officials had high hopes for untangling their differences this week, and they have tentatively planned to have a final document in hand by late June, in time for a twice-yearly summit meeting between the U.S. and European Commission, officials said. Commerce Undersecretary David Aaron, the chief negotiator for the United States, will meet today and tomorrow with John F. Mogg, a director general of the European Commission. "Until you know what's in the safe harbor and how's it's going to work, you can't say yea or nay," said Christine Varney, chairman of the Online Privacy Alliance, an industry group working to develop a self-regulatory system. "They can't do that until they know what the deal is." Commerce officials have worked for more than year on a set of principles for consumer access and control of personal information, data security and industry self-regulation that would help U.S. companies satisfy European privacy authorities, while permitting companies to continue current practices. A draft of those principles released in November was sharply criticized by some companies and legal authorities as vague and possibly misleading. Now, some large companies complain that a newer document meant to clarify the Commerce Department's ideas is too specific. Or they question how the guidelines would be put in place and enforced, officials said. "The unanswered questions have become increasingly important," Varney said. Aaron said concerns focus on the suggestion that American companies should agree to offer European citizens limited access to the information that's collected about them and honor requests that data not be shared with affiliates or other companies. Aaron said some company officials also worry their consent to self-imposed restrictions abroad might be interpreted as endorsement of similar legislative restraints in the United States. Aaron said he has tried to reassure industry leaders that efforts to comply with European rules have nothing to do with the privacy legislative debate in the United States. "My point to them," he said, "is simple: This does not establish a precedent." Aaron downplayed the importance of recent criticism. He said larger companies can probably comply with the European laws through the use of contracts, while small and medium-size companies can comply by agreeing to the Commerce Department principles. But in a speech yesterday he left no doubt about the importance of heading off any cutoffs of data by Europeans. "Such a disruption would be a disaster of historic proportions," Aaron said in a speech to the Information Technology Association of America. "It would threaten our ability to carry on transatlantic trade at even current levels, let alone expand it." Several legal analysts said Aaron's assessment of the situation is still too rosy. Joel Reidenberg, a law professor at Fordham University and a privacy specialist, said the resistance of large companies to support the Commerce Department "sends the message the safe harbor approach won't work in the U.S." Marc Rotenberg, director of the Electronic Privacy Information Center, said the Commerce Department's troubles in closing out an agreement with the Europeans stem from the approach. "This is a privacy policy driven by trade interests," Rotenberg said. "A more successful approach would focus on privacy protections" first. Ella Krucoff, spokeswoman for the European Commission, said European officials "were looking forward to this meeting and making real progress." She said questions about industry support for the Commerce Department's approach "certainly doesn't help the situation." © Copyright 1999 The Washington Post Company