U.S. And EU Reach E-Commerce Privacy Agreement

Within a few weeks of June 23's scheduled small-business e-commerce summit in Washington, the 15-nation European Union (EU) is expected to give final approval to a "safe harbor" privacy agreement that eliminates a big barrier to transatlantic e-commerce. The accord, which comes after two years of often-contentious negotiations, will allow U.S. businesses to comply with European privacy regulations and to receive data on individuals. In practice the voluntary "safe harbor" process will allow the EU to certify that participating U.S. companies meet its tough October 1998 rules on personal-data transmission. "Once the accord is implemented, it will enhance consumer confidence by protecting European citizens' privacy, reduce business costs, and keep data flowing across the Atlantic," says U.S. Commerce Secretary William M. Daley. Without the "safe harbor" arrangement, corporations would find it difficult to run multinational operations, Commerce officials explain. Basic information about employees could not be transferred to the U.S. Nor would accountants be able to carry out consolidated audits on firms with offices in the U.S. and Europe.