BRUSSELS (AP) — The backlash in Europe over U.S. spying is
threatening an agreement that generates tens of billions of dollars in
trans-Atlantic business every year — and negotiations on another pact
worth many times more.
A growing number of European officials are calling for the suspension of
the "Safe Harbor" agreement that lets U.S. companies process commercial
and personal data — sales, emails, photos — from customers in Europe. This
little-known but vital deal allows more than 4,200 American companies to
do business in Europe, including Internet giants like Apple, Google,
Facebook and Amazon.
Revelations of the extent of U.S. spying on its European allies is also
threatening to undermine one of President Barack Obama's top
trans-Atlantic goals: a sweeping free-trade agreement that would add an
estimated $138 billion (100 billion euros) a year to each economy's gross
Top EU officials say the trust needed for the negotiations has been
"For ambitious and complex negotiations to succeed, there needs to be
trust among the negotiating partners," EU Justice Commissioner Viviane
Reding said Wednesday in a speech at Yale University.
At the very least, the Europeans are expected to demand that the U.S.
significantly strengthen its privacy laws to give consumers much more
control over how companies use their personal data — and extend those
rights to European citizens, maybe even giving them the right to sue
American companies in U.S. courts.
The Europeans had long been pressing these issues with the Americans. But
since former National Security Agency contractor Edward Snowden began to
leak surprising details on the extent of U.S. surveillance in Europe, the
European demands have grown teeth.
"I don't think the U.S. government can be convinced by arguments or
outrage alone, but by making it clear that American interests will suffer
if this global surveillance is simply continued," said Peter Schaar, the
head of Germany's data protection watchdog.
One sanction the European Union could slap on the U.S. would be to suspend
the Safe Harbor deal, which allows American businesses to store and
process their data where they want. It aims to ensure that European
customers' data are just as safe as in Europe when handled in the U.S.
By signing up for the self-reporting scheme supervised by the U.S. Federal
Trade Commission, U.S. companies gain the right to move data about their
business and consumers back and forth between the EU and the U.S. as
Without it, U.S. firms would face either a lengthy and complicated
case-by-case approval procedure by European data protection authorities,
or a technological nightmare of having to ensure that European data is
stored and processed only on servers within the 28-nation bloc. That would
be costly and in some cases impossible — and could force U.S. businesses
to stop servicing European customers.
"There is really no viable alternative in the near-term," said Chris
Babel, chief executive of San Francisco-based TRUSTe, which helps American
firms get Safe Harbor certification from the U.S. Department of Commerce.
He estimates that U.S. companies would face tens of billions of dollars in
lost revenue and additional costs to redesign their technological
Facebook and Microsoft declined to comment on what a suspension of Safe
Harbor would mean. Spokespeople for Google, Apple and Amazon could not
immediately be reached.
Of course, any suspension would hurt Europe as well, just as the 28-nation
bloc is emerging from a recession. Consumers and businesses would find
themselves without U.S.-based services from flight-booking websites to
Options available to the EU include suspending or ending the agreement, or
demanding that the United States enact more powerful data protection laws
that include substantial fines for companies that don't keep data safe.
Germany, Europe's biggest economy, said Wednesday that it wants to see
changes in Safe Harbor.
"We share the opinion that the Safe Harbor agreement needs significant
improvements," Interior Ministry spokesman Philipp Spauschus said.
U.S. Federal Trade Commission chief Edith Ramirez said Safe Harbor has
nothing to do with the surveillance scandal, and urged Europeans not to
damage what she called a commercial agreement that works well.
"It cannot be right ... to conflate the distinct issues raised by the use
of personal data to advance private commercial interests and to protect
national security," she said Monday in Brussels.
But the EU's Reding made clear that the status quo is not an option.
"The existing scheme has been criticized by European industry and
questioned by European citizens: They say it is little more than a patch
providing a veil of legitimacy for the U.S. firms using it," she said
Tuesday in Washington.
Her agency is reviewing Safe Harbor and will present its results by the
end of the year. The EU Commission could suspend the agreement or seek
amendments to it rather easily, without the usual lengthy procedures of
having to seek approval from all EU member states or the European
An even bigger battle looms over already contentious free-trade talks
between the world's two biggest economies. Trade volume between the United
States and the European Union totaled 800 billion euros last year.
Reding warned this week that the lack of data privacy safeguards in the
U.S. could "easily derail" the talks, which resume in December and are
expected to be concluded within a year.
It appears certain that as part of the negotiations the EU will insist on
tougher U.S. data protection in line with new European laws.
That legislation lets users instruct companies to fully erase their
personal data — the so-called right to be forgotten — as well as limiting
user profiling, requiring greater transparency from companies and
mandating prior consent. Plus they contain stiff fines for violations.
"Otherwise, the European Parliament may decide to reject" the EU-U.S. free
trade deal, Reding said.
The most significant action taken in Brussels so far has been a vote by
the European Parliament urging Europe to stop sharing bank transfer data
with U.S. law enforcement in terror investigations.
But that resolution would need approval from the European Commission — and
from all 28 national governments, a long and uncertain process.