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Take the dispute between the European Union and U.S. companies regarding the transnational flow of personal data. A conversation with two colleagues recently reminded me how dramatic the issue can be, particularly how people can suprise you with the positions they take. One, a member of a number of international commissions and councils, went on about how the privacy issue in the context of global relations was not about the right to privacy at all; it was really about trade. Europeans might want to keep information about French or Italian customers in France or Italy because the data represents valuable intellectual capital: information about markets, new products, and distribution. It is disingenuous at best, goes the argument, to claim that the reluctance to pack the data off to an American operation in New York or San Jose is about respect for the individual or constitutional integrity. It is really about money that can be derived from intelligence collected through customer acquisition. To the French the equation is simple: If it is French customers we are talking about, it is French capital that needs to be protected.
The reaction of the second colleague, who is normally skeptical about European intentions, was equally “out of character.” Look, she said, it is extremely shortsighted to dismiss the European position as simply protecting a narrow self-interest (and commercial sectors). It is really centered around cultural legacies about which Americans ought to be more sensitive. If you need to be hit over the head, gather the meaning of this: The Holocaust was facilitated by the centralization of personal data. The fears and apprehensions are not about theoretical dangers; they reflect vivid memories of data used for violent purposes. Subject a population to massive data collection processes — without proper safeguards — or large data banks that can be mined for identity attributes and relationships, and you have trouble.
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Electronic Privacy Information Center:www.epic.org Junkbusters:www.junkbusters.com Privacy International:www.privacy.org/pi
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To keep the wheels greased while things sort out, the U.S. has tried to push a “safe harbor” proposal that would let firms exchange data if they comply — voluntarily — with certain policies the Europeans view positively, such as informing people about how they collect information or about with whom they will share data they collect. This proposal, too, has hit some bumps in the road. U.S. firms, of course, need to know that they will be treated fairly in disputes, and cool logic or dispassionate reason alone will not be sufficient to resolve those disputes.
The economic implications of the transfer of personal data between two legal jurisdictions can be intimidating. David Aaron, U.S. representative for talks with the EU regarding online privacy, indicates that blocking data transfer could cause a loss of billions of dollars in international trade and investment. Meanwhile, companies are still compelled to race to the latest Web technology to find out who their customers are and how those customers behave. It is, after all, what they could expect of their competition.
The international card has been played within our own borders and with our own domestic governing institutions as well. Earlier this year, a number of privacy advocacy groups — the Electronic Privacy Information Center, Junkbusters, and Privacy International (based in London) — attempted to thwart the merger between DoubleClick Inc. and Abacus Direct Corp., a marketing firm that maintains databases on consumer buying habits. They alleged to the Federal Trade Commission and the Securities Exchange Commission that DoubleClick’s practices are “more likely not in accordance with laws in many European countries that limit nonconsensual data collection.” DoubleClick’s response has been that, although the privacy issue is important, the fuss over the merger is undeserved. The firm gives people the opportunity to opt out of its database and it complies with self-regulation policies that industry groups promote. Besides, DoubleClick says that only 10 people out of 75 million ad viewers per month choose to purge the firm’s cookie from their machines.
Taking the whole situation together, there is a certain Alice in Wonderland quality to the debate. Lewis Carroll wrote that “Everything’s got a moral if you can only find it.” In other words, none of the ambiguities, contradictions, or frustrations with reaching consensus should dissuade the involvement of professionals of all levels and opinions in getting there. Indeed, participation should be encouraged. We have a Bill of Rights and act as though we do. We don’t have a corresponding Bill of Responsibilities, but we should act as though we do anyway.
Nicholas Imparato is professor of marketing and management at the University of San Francisco’s McLaren School of Business and a research fellow at the Hoover Institution at Stanford University. He is the editor of Capital for Our Time: The Economic, Legal, and Management Challenges of Intellectual Capital (Hoover Institution Press, 1998). You can reach him at imparato@hoover.stanford.edu
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