Union risks US ire over plans to reduce ‘spam’ on Net menu

Date: 16/07/01

By Peter Chapman

THE European Commission risks a US backlash over plans to foist more data privacy restrictions onto foreign countries, if governments agree its draft proposals to curb unwanted e-mails.

Under the pending data privacy rules EU firms would have to get permission, or an 'opt-in', from would-be customers before sending them electronic sales pitches. The Commission wants to oblige foreign companies to do the same, according to an internal document obtained by European Voice. The new rules aim to free consumers from e-mail inboxes clogged with hundreds of messages known as 'spam'.

Foreign firms would be hit by the ruling even though their activities would be perfectly legal in their own country.

Currently, most companies are allowed to send messages to anyone who has not signed up to a special 'opt-out' register to indicate they do not want to receive them.

The Commission's 'questions and answers' paper says the EU would be able to impose its rules thanks to the World Trade Organisation's General Agreement of Trade in Services (GATS).

It said this agreement "allows its contracting parties to maintain or adopt measures necessary to enforce national legislation on data protection and data privacy within the territory. "On this basis, the EU and its member states can take legal measures against unsolicited e-mail messages from outside EU territory which do not respect opt-in legislation. Any reputable companies from outside the EU are therefore likely to abide by our rules. "US government sources said they could not comment on the reports until they had received more information.

But industry experts are already crying foul - and predicting a stormy reception from Washington - if the ruling is ever enforced beyond the EU's borders.

David Fares, e-commerce director with the New York-based United States Council for International Business, a lobby whose members include corporate giants IBM, Microsoft and Ford, said the GATS did not allow the EU to impose unfair restrictions on trade. "The Commission seems to have conveniently forgotten about their limitations [within GATS]...there is a provision that says measures must be 'reasonable and can't create a barrier to international trade'."

Mike Pullen, a New York bar-qualified lawyer for UK firm DLA, said applying the law outside the EU could lead to criminal penalties for directors of foreign firms who chose to ignore it. "If you breach data privacy laws in some member states then it is a criminal offence," he said. "It would be difficult to enforce - but if [directors] turned up on holiday they could be arrested."

The US, like many other EU trade partners, is already struggling with European data privacy laws restricting electronic flows of personal data with foreign countries if they do not have similar rules in place. A transatlantic trade row was narrowly averted after the EU and US thrashed out the 'safe harbour' agreement - under which American firms agree to follow strict guidelines designed to protect citizens' data.

To date only a handful of US firms have joined the safe harbour, prompting fears that the EU will 'switch off' huge data flows between the two continents.

A majority of EU member states backed the e-mail opt-in regime at last month's meeting of telecom ministers in Luxembourg.

But a minority - France, Ireland, the UK and Luxembourg - blocked an agreement and the Belgian presidency must now attempt to thrash out a deal later this year. It must also get the backing of MEPs before an opt-in regime becomes law.

Their support cannot be taken for granted. Only yesterday (11 July) a report by Italian Radical Party MEP Marco Cappato, saying member states should be able to choose between opt-in and opt-out regimes, was welcomed by the Parliament's committee on citizens' freedoms and rights.

Reaction to the European Commission's draft proposals to curb unwanted e-mails.