On the introduction of the European Union’s (EU) data protection laws, e-commerce between the EU and the United States (US) was severely affected as, by EU standards, the US was deemed not to have sufficient data protection laws and therefore data transfer was barred (for many other countries too). This resulted in a system being developed where US companies could voluntarily have policies that meet European data protection standards and “publicly sign on to a web-based register maintained by the Department of Commerce” Laudon & Traver (2010) (available at http://www.export.gov/safehrbr/list.aspx).
This safe harbour system would then provide signed-up companies a system of self-regulation and protection from liability if the approved policies are adhered to. The need for such compliance policies are growing due to differences in data protection and security laws between the US and Europe and that many US companies are increasingly employing people in Europe.
I am reassured by the safe harbour system, although I am not suggesting that the EU privacy laws are anywhere near perfection, as we do benefit from a different pro-protection attitude to privacy protection when compared to the US, however as “U.S.-based multinational firms scored higher than their European counterparts on five of eight common privacy practices” Sullivan, B (2006), I hope that my data is in safer hands than when left to either system alone. In addition, the absence of the US safe harbor system could cause organisations to de-centralise from a data point of view causing greater costs at the European level and potentially tighter budgets. Perhaps even the US relationship would not have been forged in the first place as the EU acquisitions may not have been worth the extra resources required to run EU operations.
Laudon & Traver (2010) E-Commerce: Business. Technology. Society. (6th Edition). Pearson Prentice Hall.
Sullivan, B (2006) ‘La difference’ is stark in EU, U.S. privacy laws EU: citizens well protected against corporate intrusion, but red tape is thick [Online]. Available at http://www.msnbc.msn.com/id/15221111/ (Accessed 18 September 2010).