Critics: EU's proposed data protection rules could hinder Internet

IDG News Service - Data protection and online privacy rules proposed for the European Union could hinder the development of new Web-based business models and bog down companies with regulations, some U.S. critics said Wednesday.

The proposal, released Wednesday, "goes precisely in the wrong direction," said Thomas Lenard, president of the Technology Policy Institute, a free-market think tank. "If adopted, it will stifle the development of the Internet, which depends critically on the use of individual data to develop, improve, and fund services and content."

The rules, proposed by E.U. Justice Commissioner Viviane Reding, include the so-called "right to be forgotten," allowing Internet users to have data about them deleted if there are no legitimate reasons for retaining it. The proposal would require companies with more than 250 employees to appoint data protection officers, and it would require companies to report data breaches within 24 hours.

The proposal is not in consumers' interests, Lenard said. It would impose "significant costs" on them, in the form of less useful Web services, with no evidence of comparable offsetting benefits, he said.

Asked if privacy is a benefit, Lenard said it can be, but there's been little evidence showing significant harm to consumers because of current online data privacy practices. "Consumers willingly trade their information for services and content all the time," he said.

The proposal's right to be forgotten raises technical and free speech questions, added Emma Llanso, policy counsel with the Center for Democracy and Technology, a digital rights group. Personal information online can get copied and reposted on multiple websites, and the E.U. should look "very carefully" before creating regulations for sites where the information didn't originate, she said.

Privacy advocates applauded the proposal.

The proposal is a "serious and thoughtful effort," said Marc Rotenberg, executive director of the Electronic Privacy Information Center. "It simplifies compliance for business and it strengthens rights for users."

Jeffrey Chester, executive director of the Center for Digital Democracy, praised the right-to-be-forgotten proposal.

"The E.U. has raised the digital bar protecting user privacy online by proposing a new right to control their information," he said in an email. "Through new ways for consumers to ensure their information is 'forgotten' and 'erased' online, online marketers will not be able to readily build a treasure trove of data profiles."

The proposal will help consumers better respond to the "ever-growing" data collection practices of Facebook, Google and other Internet giants, he added.

Facebook, in a statement, called the proposal "an important opportunity to develop regulation that both protects privacy and supports the creation and growth of modern services over the global Internet."

Two U.S. technology trade groups, the Business Software Alliance and the Software and Information Industry Association, raised concerns about the proposal, saying it could limit the growth of the Internet.

The proposal " errs too far in the direction of imposing prescriptive mandates for how enterprises must collect, store, and manage information," Thomas BouA(c), BSA's director of European affairs, said in a statement.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.