US could eclipse EU privacy directive

President Clinton's senior adviser on Internet policy said yesterday that the US is likely to render the European Union's data privacy directive moot by establishing a self-regulating industry system before all 15 European Union countries formally adopt the directive.

Ira Magaziner, speaking yesterday at a conference sponsored by the Progress & Freedom Forum, said the European directive, which calls for strict protections over the transport of private data, creates an unpredictable environment for business by requiring companies to go individually to the privacy boards of each country and negotiate the handling of private information.

"We're not going to have them impose an inefficient, non-workable system on us," Magaziner said.

If the US can demonstrate that a system of self-regulation is efficient, Magaziner said he was confident such a system would be preferred by businesses everywhere over the more top-down approach advocated by the Europeans.

The directive, which Magaziner said has been translated into national law by only four EU countries, went into effect October 25. It calls for adequate privacy standards involving such things as giving users the right to review personal data, correct it and limit its use. It also requires the EU member states to block outbound transmission of data to countries that don't have laws providing a level of protection similar to that in the country where the data originated.

Companies that collect data in Europe and store it on servers in the US were concerned that implementation of the directive would cause data flow disruptions. However, when it went into effect the US and EU countries avoided any disruption by agreeing to continue consultations. A final agreement is expected by mid-December.

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