The eCommerce Blog - by Allegro Group

My readers may be surprised to learn that a company with no operations and no significant dependence on data processing subcontractors in the USA has a strong view on a transatlantic agreement that allows European companies to send customer data to that country. But we do.

The agreement is called the Safe Harbor, and essentially allows such transfers on condition that the American company receiving Europeans’ personal data publicly commits to complying with EU rules. This public commitment is enforceable under U.S. law. Since the Safe Harbor was launched in 2000, thousands of U.S. companies have signed up and protected their data according to EU standards. The Safe Harbor is therefore an extremely valuable tool for transatlantic trade, benefiting both European and American companies.

We all know that knee-jerk politics are dangerous. And yet since the Snowden revelations broke, European politicians have been falling over themselves to appear to be doing something to protect Europeans’ data. One idea that has some momentum in the European Parliament’s civil Liberties Committee is the suspension of the Safe Harbor agreement.

Despite having no direct stake in the Safe Harbor, my company is deeply concerned about this idea. Why?

First, because it won’t solve anything. If there are problems with the way specific U.S. laws allows government agencies access to data held by U.S. companies, then those specific U.S. laws should be fixed. Suspension of the Safe Harbor would not address any of the underlying legal issues.

Second the Safe Harbor has been the single most effective tool for bringing European privacy norms to America – privacy norms that are often being applied to U.S. residents too. Suspension would therefore actually cause privacy harm.

Third, one of the economic benefits of the Safe Harbor for European companies is that the playing field in terms of compliance costs is more even as a result. Suspension could reverse that trend.

Fourth, the sudden suspension of the agreement would entail major costs for companies who use it, as they looked for alternatives. But no assessment has been made of the economic impact of this proposal. At a time of economic crisis, taking such a risk seems particularly foolish.

Last and most importantly, the apparent willingness of European politicians to sacrifice the interests of European industry for the sake of political point-scoring against a foreign government is of deep concern.

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