The European Union Data Privacy Directive and international relations.

AuthorSalbu, Steven R.

ABSTRACT

This Article explores the European Union Data Privacy Directive and its impact upon international relations. Part II provides a background upon which the Privacy Directive is built. In Part III, the Article confronts the differences between how the United States and its European counterparts address privacy issues generally. Part IV analyzes the Privacy Directive in detail, while Part V explores possible effects that the Privacy Directive might have on international relations.

  1. INTRODUCTION

    Recently, the European Union passed the Data Privacy Directive (Directive), under which Member States are required to enact implementing legislation. (1) The Directive is the world's most ambitious and far-reaching data privacy initiative of the high-technology era. Its global pervasiveness, and therefore its extraterritorial effects, raise interesting questions regarding tension between the goal of uniform Internet policies and the importance of respecting sovereignty and national autonomy. The resolution of this tension may ultimately affect international relations in the new century.

    This Article examines these dynamics. Part II is a primer on contemporary data privacy issues, the foundation upon which the EU Directive is built. Part III briefly discusses differences between U.S. and European approaches to these privacy issues, highlighting a present lack of global uniformity, even among two Western, developed, regional economies. Part IV analyzes the EU Directive and includes some critical observations, highlighting potential pitfalls and shortcomings. Part V looks at the relationship between the EU approach and international relations, examining possible effects on the furtherance or hindrance of a harmonious and cohesive world community.

  2. A PRIMER ON CONTEMPORARY DATA PRIVACY ISSUES

    Privacy is a concern that obviously predates modern technology. (2) It is also easily taken for granted. As one scholar observes, privacy is a lot like freedom: people do not appreciate its value and importance until it is threatened or lost. (3) In an era of burgeoning information technology, privacy also can become an afterthought, a secondary consideration in the race to find and exploit the next cutting-edge development. (4)

    Since the 1980s, but prior to public diffusion of developing Internet technology, legal scholars recognized how seriously computers can threaten privacy. (5) The advantages of technology come at a price: one person's "enhanced information" can invade another person's privacy. (6) This double-edged sword naturally creates conflict, based on both self-interest and ideology. (7)

    Reasons for concern have escalated, and they continue to grow. Privacy is becoming increasingly susceptible to ever more sophisticated technologies. Electronic identification cards, wiretaps, biometrics, and video surveillance cameras all have the potential to erode privacy. (8) Digital interactive television technology soon may tell advertisers exactly which programs people view in their homes, refining target advertising (9) in ways that are potentially both beneficial and frightening. (10)

    No modern technology poses a greater threat to privacy than the Internet. (11) Interactive computer technology allows researchers to collect data more cheaply and efficiently. (12) Conversion of data into binary form enables the common person to store, use, and misuse data in powerful new ways. (13) Computer technology also allows commercial and other entities (14) to accomplish data collection tasks more quickly and inexpensively. (15) What once took days of manual labor now can be accomplished with a keystroke; what once required substantial capital now can be achieved by anyone with a computer and a modem. (16)

    By the late 1990s, the potential had become a reality, as a Federal Trade Commission (FTC) survey analyzed 1402 websites and concluded that ninety-two percent collected personal data, and that the majority did so without posting privacy disclosure statements. (17) More anecdotally, Professor Sovern describes modern media as "filled with horror stories about the use of personal information." (18)

    Lack of disclosure is a serious problem. Internet-enhanced invasion of privacy can be especially insidious because the technology facilitates the collection of personal data without the knowledge of the subject. (19) Among the more disturbing concerns is the collection of identifying information, such as address, social security number, medical information, financial information, and credit card information. (20)

    Some critics of the non-consensual flow of personal information posit property arguments in support of the electronic privacy movement. (21) They contend that the subjects of personal information have the right to control its use, including the right to sell it. (22) Some property-based discussions appear to be based on conceptions of fairness. (23) Others have focused on the purported externalities pertaining to uncompensated use of private data. (24) Still others have discussed property-related policy approaches to privacy issues, such as the possibility of licensing private information. (25) In a world where companies pay or otherwise compensate consumers for personal information with increasing frequency, (26) expectations regarding information rights are likely to shift.

    The property rights approach is appealing because it both recognizes and accommodates different preferences and priorities among consumers. Under this approach, those consumers who value their privacy highly need not sell the rights to personal data and information; those who place a lower value on privacy are free to sell their data and information. (27)

    There are also good arguments in favor of maintaining the freest possible flow of information, including personal information. Society benefits from increased access to information. (28) Some commentators suggest that the free collection and use of information benefits not only businesses, but also consumers and society at large, (29) and that current pro-privacy trends may therefore more accurately be classified as "privacy panic." (30) Consumers ostensibly benefit by receiving more pertinent information, as companies better target their advertising to personal interests; (31) society ostensibly benefits as better, more efficient marketing supports e-commerce and a thriving economy. (32) In addition, all users benefit from free Internet services that are sponsored by advertisers. If Internet advertising fails to be effective, advertiser sponsorship will decline and the public could lose many useful sites. (33) Any means of improving advertising effectiveness is also a means of supporting a robust web of services, available without charge. (34)

    Skeptics counter that, unless people are careful, the benefits will come at a serious cost to personal privacy. (35) The threat comes from the government as well as the private sector. (36) Although technology can be used to circumvent the privacy of consumer information, (37) policies can be established to protect these rights. (38) Companies can be required to notify people of their intent to collect, use, or distribute personal information, (39) as well as to provide consumers with meaningful control over whether--and if so, how--these processes occur.

    Specifically, both opt-in and opt-out policies provide a measure of consumer privacy protection, although the former are stronger than the latter. (40) Opt-in policies prohibit businesses from collecting, using, or sharing (41) personal information unless the subject of that information has expressly agreed to these activities. (42) Under an opt-in policy, the default assumption is that every consumer expects privacy. (43) The assumption can be rebutted only through voluntary and affirmative consumer consent. Opt-out policies prohibit businesses from collecting, using, or sharing (44) personal information only after a consumer has taken the initiative to inform the appropriate person or entity of objections to the relevant activities. (45) In contrast to opt-in policies, the default assumption in opt-out policies is that a given consumer does not have privacy expectations regarding relevant activities, such as collecting, using, or sharing the data. (46) To trigger the privacy protections that are automatic under an opt-in policy, a consumer must take the initiative and follow the prescribed steps. (47)

    In many instances, companies collecting data do not conspicuously inform individuals of their opt-out rights or provide them with instructions and contact information for exercising their rights. (48) In these cases, the consumer must be willing to investigate the procedure and the details of implementation in order to exercise their rights. It is likely that these dynamics impede the assertion of opt-out privileges in many cases. While consumers most concerned with privacy are more likely to go to the trouble, those who are moderately concerned are less likely to expend the resources necessary to exercise their opt-out rights. Even among consumers with high privacy-concern levels, some will be too busy or distracted to pursue an interest that they consider very important.

    Some commercial interests and opponents of privacy advocates counter that opt-in and other aggressive policies add unnecessary or even prohibitive costs to doing business. (49) Anti-regulation arguments are bolstered by data suggesting that theoretical privacy concerns may not be very important to real consumers. For example, when New York Telephone enabled customers to opt out of a mailing list it intended to share with direct marketers, only 800,000 of 6.3 million customers exercised the option. (50)

    Of course, privacy advocates can challenge the significance of this information on at least four grounds. First, 800,000 is a large number in absolute terms, and even as a proportion it is not a trivial percentage of offerees. Second...

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