EU May "Make An Example" Of U.S. Privacy Abusers

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April 04, 2001 (4:27 PM EDT)

EU May "Make An Example" Of U.S. Privacy Abusers

By Mary Mosquera,

WASHINGTON—Company officers and board directors may be at risk for liability in future data privacy suits as more regulations in the United States and around the globe come into effect this summer, attorneys told corporate privacy professionals on Wednesday.

No federal suits related to abuse of data collection in e-commerce have been brought in the United States.

But in the European Union companies have been sued for improper use of data, said Benjamin Hayes, an associate at Kirkpatrick & Lockhart LLP, at a cyberspace security and privacy conference sponsored by the Bureau of National Affairs in Washington.

While the United States has not yet passed a comprehensive e-commerce privacy bill, the European Union's privacy directive will be enforced starting July 1.

U.S. companies, even those physically in the United States, will be required to give more privacy protections to Europeans' personal data than that of U.S. citizens or risk having their data flow from Europe cut off.

"EU data officials intend to make an example of someone," Hayes said, warning that U.S. companies should be careful how they collect personal information.

In 1999, European data enforcers received 7,000 complaints of personal information infringements, 2,700 of which were investigated, Hayes said. Data enforcers made 587 visits to company premises as part of those investigations, he said.

In the United Kingdom, criminal verdicts of liability were found in 91 cases, and four of them were against company officers, he said.

In Spain, Microsoft Corp. (stock: MSFT) paid out $60,000 and Spanish telecom giant Telefonica SA $160,000 to settle cases of data misuse, Hayes said.
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