By Tom Fairless And Stephen Fidler
BRUSSELS--European policy makers feel crowded out by the rise of
U.S. Internet companies and are proposing a plan to give them a
larger role: write a new rule book for the Web.
Now putting finishing touches on its tough data-privacy regime,
the European Union aims to establish a de facto standard that
companies would have to embed to sell products in the giant
European market.
Their hope: as rules such as the right to remove Web links to
personal information spread, European companies would get a leg up
in the next era of Internet commerce.
There are plenty of hurdles. U.S. technology firms worry that
other regions won't follow the tough EU model, leading to a
Balkanized Internet, and some have pushed back against facets.
China, which has more Internet users than any other country, is
left out of the EU's lobbying for its data-privacy rules.
Still, said Jan Philipp Albrecht, chief negotiator for the
European Parliament on the EU's new data protection law, "If you
can achieve...a standard [globally] that is somehow near...your
own, then this is an advantage."
He and others point to the EU's success in exporting its GSM
technical standard for mobile communications in the 1990s. That
technology now is widely used by phone makers in Europe, the U.S.
and China. While there is no international organization to submit a
global standard, officials here hope people would choose platforms
that guarantee more privacy protections.
"We have a chance to be influential around the world," said
Giovanni Buttarelli, who acts as the EU's top data-protection
watchdog. A "growing number" of countries including Japan, are
"looking at us and are likely to follow the European approach," he
said. EU lobbyists say U.S. firms are building new products and
services with the rules in mind to avoid regulatory
uncertainty.
EU officials are hitting the road to promote the regime. Mr.
Buttarelli travels to Washington, D.C., New York and Boston next
month to spread the message, and heads to Silicon Valley in the
spring to explain the proposed rules to U.S. technology firms,
which he said have shown a strong interest in the plans.
While details are being thrashed out in negotiations between
individual governments and the European Parliament, the rules could
include "enormously enhanced" requirements around the processing of
personal data, which would "require re-engineering of a lot of
data-collection processes, apps [and] customer websites," said
Emily Jones, a data privacy lawyer with U.K.-based law firm Osborne
Clarke.
They would require individuals to give their explicit consent
before companies can use their personal data, putting pressure on
Internet businesses to build in data protection safeguards from the
start. They will also enshrine a controversial "right to be
forgotten" that allows individuals to ask for links to Web pages to
be removed.
The effort is part of a wider EU plan to create a digital single
market that knits together the region's fragmented online
data-protection systems, creating a single standard for online
privacy, copyright and consumer rights. The details of that plan
are due to be announced in May by the European Commission, the EU's
executive arm that took office on Nov. 1.
On Tuesday, Günther Oettinger, Germany's powerful representative
to the European Commission, argued Europe needs stronger safeguards
to counter Google Inc., Facebook Inc., Apple Inc. and other U.S.
companies offering Internet services and applications.
"The Americans are in the lead, they've got the data, the
business models and so the power," Mr. Oettinger said in a
hard-hitting speech in Brussels to policy maker and Internet
company representatives in which he advocated for European-wide
data regulations.
"If you use an iPhone, they know all about your
creditworthiness, your shopping habits," he added. "Take car
insurance. They know the last time you were involved in an
accident."
Apple declined to comment on the remarks.
James Waterworth, a Brussels-based Vice President for the
Computer & Communications Industry Association, a lobby group
for U.S. Internet companies including Google and Facebook, said he
was "confused" by the remarks. Mr. Oettinger, he said, is "a
pessimist who seems to believe the digital single market should be
used as a weapon against 'foreigners.' "
U.S. technology firms broadly support creating a single standard
across the 28-member EU but have lobbied fiercely against the new
rules. Earlier this month, an advisory group convened by Google
backed the company's decision to apply Europe's "right to be
forgotten" ruling only in the EU, pushing back against demands by
EU regulators that it apply globally.
Top officials hope to replicate Europe's earlier success in
establishing the global standard for mobile-phone communications,
GSM, which helped provide a springboard for European telecom giants
like Vodafone Group PLC and Nokia Oyj.
"What happened in the telecoms sector in the 1990s was that we
were able to have a common standard, GSM, so that when the
Americans were still using beepers to send each other messages we
were already using Europe-wide mobile communications," said
Finland's Prime Minister Alexander Stubb in an interview last
month.
"The U.S. has had common standards and legislation in place
whereas we have had 28 pieces of legislation which has made us
quite cumbersome," Mr. Stubb said.
European businesses see the benefits in taking the lead in
establishing global Internet standards, and have been lobbying
policy makers in Brussels, said EU officials.
"A lot of medium-size companies, those companies are not that
flexible and...have to adjust to different standards, they see the
benefit for Europe setting standards," Mr. Albrecht said.
One key flaw in the policy makers' global ambitions: China. The
Middle Kingdom has its own views on data privacy and individual
rights separate from European and U.S. norms.
EU officials feel that the region's economic size would convince
China and others to reflect its proposed rules in products such as
computers, smartphones and automobiles sold outside their home
markets.
Officials say establishing an EU-wide standard is preferable to
moves negotiate individually with U.S. firms like Google. The U.S.
search giant has faced a barrage of criticism in recent months from
top European politicians, including a resolution calling for a
possible breakup of the company.
"Right now we don't have single market, and there is a strong
protectionist tendency," said Estonia's President Toomas Hendrik
Ilves in a recent interview. "Rather than set the standards for
example with Google. we say, `look, we're going to keep them out.'
It's stupid."
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