DMA Encouraged, Optimistic about US-EU Data Protection Pact

Senior officials of the Direct Marketing Association yesterday said they were “encouraged and optimistic” over the European Union’s unanimous approval of a data protection agreement with the Clinton Administration.

“We are encouraged by the EU’s acceptance of a privacy protection agreement with the U.S. with a safe harbor provision and we’re optimistic that it will work,” said Jerry Cerasale, the DMA’s senior vice president, government affairs. “Only time will tell.”

Under the voluntary safe harbor provision, participating U.S. companies must tell European citizens about how they gather their personal information, and how they use it and give them the option of saying no to companies that want to share it with third parties. They also have to offer Europeans reasonable access to their records and permit third parties to resolve disputes.

The voluntary safe harbor provision, scheduled to become effective in July, permits U.S. companies to continue receiving an array of personal data about Europeans providing they agree not to use or disseminate the information without permission as required by the EU’s privacy directive which went into effect on October 1998.

The EU plans to review the effectiveness of the safe harbor provision in mid 2001.

Charles Prescott, senior vice president, international business, remarked that the agreement, reached in March and unanimously approved by the EU’s 15 leaders Wednesday in Lisbon, Portugal, “is not a complete solution for everybody in the [direct marketing] industry.”

He went on to say that the agreement, which the European Commission is expected to approve by month’s end, “may be a potential solution to the problem for U.S. marketers with European customer bases because it will enable them to continue processing [personal data] here without having to physically set up in Europe.”

While he called the agreement “good news for the data processing community,” Prescott observed that it has several “very large holes” in it specifically the exclusion of “financial related information and human resources information.”

Negotiators for the U.S. and EU said they expected to plug some of those holes as they continue their “discussions with the aim of bringing the benefits of the safe harbor to the financial services sector as soon as possible.”

U.S. Commerce Secretary William Daley praised the agreement, saying “it bridges the differences between the EU and the U.S. approaches to privacy protection.”

He also said that the agreement “will enhance consumer confidence by protecting European citizens’ privacy, reduce business costs, and keep data flowing across the Atlantic…key to the continued expansion of our information economies and the thousands of jobs they generate.”