NEW YORK – Moves by the European Union to impose stricter rules on data protection could have a profound impact on several technology companies in the U.S., including Google (NASDAQ:GOOG) and Facebook (NASDAQ:FB) among others.
On Monday, the European Parliament’s Civil Liberties Committee overwhelmingly approved tougher data protection rule that include fines of up to € 100 million for companies found in violation. Part of the sweeping regulation includes restrictions on how date collected in EU member states can be shared with non-EU countries. With the decision, negotiations with member states will move ahead with the goal of enshrining a new code of conduct by next May. If approved, the new rules would be the first fundamental update of Europe’s data protection laws since 1995.
According to Jan Philipp Albrecht, who was the lead parliamentary negotiator on the legislation, the legislation would act as a wake-up call for how Google and others use the data they collect, especially in light of the leaks from U.S. data analyst Edward Snowden about U.S. surveillance activities at home and abroad. ‘They’ve had a learning process for a long time and now we need to say clearly what the rules are and how they will be applied,’ Albrecht said of Google, Facebook, Yahoo! (NASDAQ:YHOO), and others that had been compelled to share data with U.S. authorities.
When asked how the law would affect companies such as Google, Albrecht stated that ‘they will be able to do their business as they do today. Nevertheless, if they retain data for longer than is necessary, or if they do not inform consumers about how their data is being used, they will be in violation of the rules. If Google just tries to involve consumers in the process and doesn’t hide its intentions or the extent to which personal data are involved, then it will be okay.’
Representatives for big technology firms have tried to fight the legislation since 2012 and authorities in the U.S. worry that if the EU updates their rules, then other countries would follow. Even if the laws do not directly affect U.S. technology companies the lack of a global standard, from an American perspective, would increase the cost of doing business for many tech firms.