Europe pushes ahead with stricter data privacy rules


By Luke Baker

BRUSSELS, Oct 21 (Reuters) - The European Parliament votedto strengthen Europe's data protection laws on Monday, includingplans to impose fines of up to 100 million euros on companiessuch as Yahoo!, Facebook or Google if they break the rules.

The vote in parliament's civil liberties committee opens theway for further negotiations with EU countries and the EuropeanCommission on the plans, the first revision to Europe's datalaws since 1995.

In the nearly two decades since then, vast changes havetaken place in how data is generated, stored, shared and viewed,leaving lawmakers determined to get ahead of the game and draftrules that they say will better protect individuals.

"The European Parliament has just given its full backing toa strong and uniform European data protection law that will cutcosts for business and strengthen the protection of ourcitizens: one continent, one law," said EU Justice CommissionerViviane Reding.

In its legislative proposal unveiled in early 2012, theCommission suggested sanctions of up to 2 percent of globalturnover on companies that violate the rules, and said consumersshould have the "right to be forgotten" - that they should beable to remove their entire digital traces from the Internet.

The parliament's civil liberties committee has come up withnearly 4,000 amendments to the original plan, includingincreasing the fine to 5 percent of annual worldwide turnover or100 million euros, whichever is greater.

The changes also mean the replacement of the "right to beforgotten" with "the right of erasure", seen as a lesserobligation.

Officials said the change in language was necessary as consultations with technology companies had made clear that itwould impossible to entirely remove someone's traces from theInternet. Individuals should not be promised something thatcould not be achieved, the officials said.

The regulation on data in the 28 countries that make up theEuropean Union will establish, when finalised, a single,pan-European law for data protection, replacing the currentinconsistent patchwork of national laws. Companies will dealwith one law, not 28.

"The benefits are estimated at 2.3 billion euros per year,"the Commission said in a statement.

Parliament, in line with the Commission's proposals, alsowants to impose strict rules on how data is shared ortransferred to non-EU countries. For example, if the UnitedStates wants access to information held by Google or Yahoo!about a European citizen based in Europe, the firm would have toseek authorisation from a European data authority first.

That would establish an extra, EU-controlled gateway thatmight go some way to assuaging the profound concerns raised inEurope about U.S. data spying activities revealed via the leaksfrom former U.S. data analyst Edward Snowden.

Facebook, Yahoo!, Google and other Internet-based firms, thevast majority of them American, have lobbied against theCommission's proposal, concerned it will damage their businessmodel by imposing an extra, costly burden on how they handledata, and limit their ability to target goods at consumers.

U.S. authorities are also worried that if Europe establishesstrict new data rules, countries in Latin America, the MiddleEast, Africa and Asia will tend towards the European model,setting a higher global data-protection threshold.

That would leave the United States either having to offerthe same protections or lobbying to get countries to adopt itsless rigid code of protection, creating an uneven playing fieldthat could dent the competitiveness of U.S. firms.

"Tonight's vote also sends a clear signal: as of today, dataprotection is made in Europe," Reding said in a statement.

Negotiations with EU member states and the EuropeanCommission on the law are to start later this year or early in2014. EU leaders will discuss the issue at a summit in Brusselson Oct. 24-25 and could give some indication then of how quicklythey want to proceed.

The aim is to have the legislation agreed before May, whenthe assembly breaks up and new European Parliament elections areheld. However, EU officials are not convinced this is feasible.

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