Bush Administration Signals U-Turn on E-Privacy Agreement with EU

03 April 2001

Reacting to intense lobbying from the US financial services industry, the Bush Administration looks set to renege on the so-called Safe Harbour agreement on e-commerce consumer privacy negotiated with the European Commission last November.

This seeks to ensure that consumer data exported from Europe to US firms is protected as required under EU law. At issue are certain clauses in the standard contracts proposed for use under the agreement.

If the accord is thrown to the wolves, European marketers will have to explore other ways of complying with the EU Data Protection Directive, possibly entering into individual contracts with all US companies to which they send consumer data.

Not all the opposition to the Safe Harbour deal emanates from the US. FEDMA [the Federation of European Direct Marketing Associations], has expressed concern that the proposed model contracts are too difficult to implement, presenting both legal risk and extra administration costs for European direct marketers.

In response to FEDMA’s concerns, the EC is expected to publish an Explanatory Memorandum, defining the model contract as a maximum position, not to be supplemented by additional national requirements. The memorandum will also clarify that the validity of existing contracts will not be affected.

News source: Direct Marketing Association (UK)