US and Europe at Odds over Privacy

Scales-Of-Justice-12987500-300x300A few weeks ago I wrote about the various battles currently raging that are going to determine the nature of the future Internet. None of these battles are larger than the battle between spying and surveillance, and citizens and countries that want to protect their citizens from being spied upon.

Recently, we’ve seen this battle manifest in several ways. First, countries like Russia and Thailand are headed down a path to create their own fire-walled Internet. Like the Chinese Great Firewall, these networks aim to retain control of all data originating within a country.

But even where the solution is not this dramatic we see the same battle. For instance, Facebook is currently embroiled in this fight in Europe. Facebook might have been singled out in this fight because they already have a bad reputation with European regulators. That reputation is probably deserved since Facebook makes most of their money from their use of customer data.

But this fight is different. The Advocate-General of the European Court of Justice (their equivalent of the Supreme Court) just ruled against Facebook in a ruling that could affect every US Internet company doing business in Europe. The ruling has to do with the ‘safe harbor’ arrangement that has been used as the basis for transferring European customer data back to US servers. The safe harbor rules come from trade rules negotiated between the US and the European Union in 2003. These rules explicitly allow what Facebook (and almost everybody else) is doing with customer data.

The Advocate-General has ruled that the EU was incorrect in negotiating the safe harbor rules. He says that they contradict some of the fundamental laws of the EU including the Charter of Fundamental Rights, the equivalent to our Constitution. He says the safe harbor rules violate the basic rights of citizens to privacy. He explicitly says that this is due to NSA spying, and that by letting Facebook and others take European data out of the country they are making it available to the NSA.

This ruling is still not cast in concrete since the Court of Justice still has to accept or reject the recommendations from the Advocate-General. However, they accept these recommendations most of the time. If this is upheld it is going to create a huge dilemma for the US. Either the NSA will have to back off from looking at data from the US companies, or else US companies won’t be able to bring that data out of Europe.

For companies like Facebook this could be fatal. There are some commercial web services that could be hosted in Europe to operate for Europeans. But social media like Facebook operate by sharing their data with everybody. It would be extremely odd on Facebook if an American couldn’t friend somebody from Europe or perhaps be unable to post pictures of their vacation while they were still in Europe. And this might put a real hitch in American companies like Google and Amazon doing business in Europe.

Such a final ruling would send US and EU negotiators back to the table, but in new negotiations safe harbor rules would no longer be an option. This ruling could bring about a fundamental change in the worldwide web. And this comes at a time when Facebook, of all companies, is talking about bringing the rest of the human race onto the web. But perhaps, as a consequence of NSA and surveillance by other companies, each country or region might end up with a local web, and the worldwide web will be a thing of the past.

One thought on “US and Europe at Odds over Privacy

  1. As an update to this article, the European Court of Justice accepted the recommendation of the Advocate General and the safe harbor rules have been declared invalid. The Court said that safe harbor did not provide enough privacy protection for European citizens. This creates a big problem for the existing large US Internet companies, but it creates a barrier to entry to Europe for American start-ups.

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