[FT.com] Restore Europeans’ trust in big data

Privacy rights for foreigners are in US national interest

Data protection has long been a point of contention between Europe and the US. At the beginning of the last decade Brussels waived restrictions on the transfer of sensitive information to US companies, provided that the recipient signed up to privacy principles similar to those enshrined in EU law. But the revelation that much of this data ends up in the hands of the US National Security Agency has led EU authorities to think again. In a report published this week, the European Commission says it might suspend this so-called “Safe Harbour” agreement unless its concerns are addressed by the middle of next year.

The commission is right to object to a situation in which communications between American citizens ordinarily stay private but exchanges between Europeans are intercepted with impunity when they pass through US servers. European governments may have received tip-offs as a result of US snooping. But that is no excuse for perpetuating a two-tier system that appears to circumvent national laws. If surveillance is necessary to the security of European states, it should be sanctioned by legislation. The US does not seem to have been imperilled by laws shielding its own citizens from eavesdroppers.

A sense of fair play is not the only reason for the US to heed Brussels’ complaints. Another is commercial self-interest. The internet has enlarged the canvas of global commerce and stretched its threads across the frame of US infrastructure. This strengthens American companies as various as Google and Goldman Sachs. Moratoriums on data transfers, which have now been floated in the EU and Brazil, would put this at risk.

Technology giants such as Google could reshape their legal structures and retool their systems to keep data close to users and out of reach of foreign governments. But the additional cost could make marginal services unprofitable and choke off nimble start-ups that spur innovation. Businesses that depend on combining data from sources in different countries – for example, to facilitate cross-border transactions – would have to untangle complex technical and legal difficulties.

America’s strongest reason for respecting foreigners’ privacy is that, in the long term, it has little choice. The internet – like the US financial and legal systems – plays an international role because it commands widespread confidence. If foreigners no longer trust America to keep their secrets, they will take their data elsewhere.

Source: ft.com

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