Antitrust Law Daily Wrap Up, PRIVACY NEWS: European Parliament approves data protection reform package, (Mar 13, 2014)

By Brian Hammond,TR Daily

The European Parliament has voted in favor of a data protection reform plan that aims to provide individuals more control over their personal data and to apply the same rules to all companies operating in the European Union, whether they are based there or not. The European Commission (EC) announced yesterday that Parliament voted 621-10 in favor of the measure with 22 abstentions.

The data protection package will establish a single, pan-European law for data protection, replacing a current patchwork of national laws. The package also will enable businesses to deal with a single supervisory authority, making it easier for companies to do business in the European Union.

The directive also will apply the same rules to all companies. Currently, European companies have to adhere to stricter standards than companies from outside the European Union that do business within the EU. The rules also empower European regulators to enforce the rules, authorizing data protection authorities to “fine companies who do not comply with EU rules with up to 2% of their global annual turnover.”

“The message the European Parliament is sending is unequivocal: This reform is a necessity, and now it is irreversible,” said Viviane Reding, European Commissioner-justice. “Europe’s directly elected parliamentarians have listened to European citizens and European businesses and, with this vote, have made clear that we need a uniform and strong European data protection law, which will make life easier for business and strengthen the protection of our citizens.

“Data Protection is made in Europe. Strong data protection rules must be Europe’s trade mark,” Reding added. “Following the U.S. data spying scandals, data protection is more than ever a competitive advantage.”

The proposed regulation still needs to be adopted by the Council of Ministers before taking effect.

The European Telecommunications Networks Operators Association (ETNO) said reform the data protection framework is “urgently needed” to account for the “new digital context” and to “introduce more harmonization across the EU and legal certainty for business.”

“Today’s vote brings us one step closer to a new data protection framework, which is likely to usher Europe into the next decade,” said Luigi Gambardella, ETNO chairman. “We should allow responsible companies to unlock the value of personal data through new digital services that consumers are demanding. In turn, these services will generate growth and jobs throughout the EU. At the same time, we need to make sure that citizens enjoy the same rights, irrespective of where the service provider is based: this will also help build a regulatory level playing field between EU and US companies, creating a fairer competitive environment.”

ETNO said it endorses the principle of “same service, same rules” and “fully supports the European Commission’s call for data protection rules to apply irrespective of the nationality of the person concerned. Applying different standards to nationals and non-nationals makes no sense in view of the global nature of the Internet and impedes the free flow of data.”

ETNO added that it welcomed the current review process of the Safe Harbor Agreement, which it called an “important occasion to set high data privacy standards for the benefit of consumers and business.”

Luca Schiavoni, regulation analyst at Ovum Ltd., said the Parliament’s vote “signals the clear intention to press ahead with the reform, despite all the delays and disagreements that had slowed down the process.”

The Parliament had amended the draft to “strengthen users’ protection in transfer of data outside the EU, which will have to be authorized by a national data protection authority and requires firms to inform the concerned person beforehand,” Schiavoni said. “This is now clearly become more of a sensitive issue, which is capturing the interest of citizens and firms concerned about the safety of their personal information and may turn a vote winner in the upcoming Parliamentary elections. It therefore is unsurprising that the EU Parliament has pressed ahead to tighten the grip on data transfer, even though the regulation will not be finalized before the end of 2014.”

Schiavoni also pointed to the fines provided for in the proposal, which Parliament increased in size from the European Commission’s initial proposal. “Having significantly deterrent fines will be a key factor for the success of the new rules, since many firms whose business is across different geographies will often have to decide which rules they have to respect (e.g. whether to satisfy a request for data coming from the US, or refusing it to comply with EU regulation),” he said. “However, it will be important to ensure that the fines are not disproportionate for small businesses, such as the flourishing tech start-ups on which European policymakers are relying to boost the EU’s economy. A phased introduction, or a more detailed differentiation in the set of fines, will be necessary in this respect.”

News: Privacy