The Privacy Law Debate: Navigating the Privacy Law Divide

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PRIVACY & SECURITY

The controversial and headlinegrabbing online privacy issue has, not surprisingly, been addressed quite differently by regulators and legislators across the world. For example, the United States, the world's biggest financial and Internet market, hasn't yet adopted a national, standard-setting privacy law akin to the European Union's Data Protection Directive.

"The United States has taken a spot approach to privacy issues" that lags behind Europe, says Bob Hanlon, a partner at New York-based law firm Coudert Brothers. "The European Union has taken the most widespread approach that has a global impact"

US privacy statutes have primarily focused on protecting consumers' financial data (Gramm-Leach-Bliley Act), health information (Health Insurance Portability and Accountability Act), and their children's personal information (Children's Online Privacy Protection Act).

The EU Data Protection Directive is much broader and in fact restricts the export of data about EU citizens to countries, such as the United States, that lack similar legal standards for privacy. The European Union's controversial Safe Harbor data-sharing agreement with the US Department of Commerce went into effeet on November 1. Under the accord,American companies have to agree to the European Union's more stringent privacy requirements or risk losing remote access to data about their European clients, employees, and business partners. By entering the Safe Harbor agreement, US companies will in effect be promising their European customers more privacy protection than they give their domestic clients. Hence, some companies may decide it's better to abide by the more stringent standards, say legal experts. Other firms will wait and see how strictly European regulators enforce the data export ban and what privacy law US legislators may pass.

Most privacy advocates, lawyers, and business executives expect the US Congress to pass some sort of broad privacy legislation in 2001. …