Here’s how Washington weaponized America’s IT companies and why it backfired

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December 16, 2015

Two months ago, the European Court of Justice issued a ruling that effectively invalidated the Safe Harbor arrangement, an agreement that big U.S. multinationals and e-commerce firms use to move personal information across the Atlantic. The court’s ruling was largely motivated by the threat that U.S. surveillance undermined the privacy rights of European citizens.

[Here’s how the Facebook case has just transformed the surveillance debate.]

This decision has led to consternation and outrage among American CEOs and politicians. Eric Schmidt, who heads Alphabet (the corporate entity that used to be Google) has said that the decision risks “destroying one of the greatest achievements of humanity,” the Internet. U.S. and European negotiators are trying to build a new deal before the end of January, when European privacy officials have threatened to confront U.S. businesses.

With the exception of privacy advocates (most of whom were delighted by this decision), American commentators have mostly been sharply critical of Europe’s decision. We have a piece in the new issue of Foreign Affairs which tells you why many of these criticisms are wrong. The real story is that US policies have created a backlash, and European officials are using America’s own tools against it.

Europe’s privacy concerns are not protectionism in disguise

Many of Europe’s critics claim that the E.U. isn’t trying to protect the privacy rights of its citizens – it’s trying to protect the profits of its businesses from U.S. competitors. For example, Oregon Senator Ron Wyden argues that the court’s “misguided decision amounts to nothing less than protectionism against America’s global data processing services and digital goods.” Before the Safe Harbor decision, President Obama similarly claimed that European privacy protections were more motivated by commercial selfishness than high-minded principle.

[European privacy policy is not a cynical anti-competitive plot.]

The problem is that this isn’t actually true. There wasn’t any big push among European firms or their political friends to sabotage Safe Harbor. Many important European firms used Safe Harbor too, for example to store data in the U.S. They are just as unhappy as their U.S. counterparts. At the same time, companies like Google, eBay and Apple employ thousands of workers across Europe. Compare this to the dozen or so employees at Runbox, a Norwegian company that promotes itself as a privacy-focused alternative email provider and has received attention in the wake of the Snowden affairs.

More generally, the Safe Harbor decision has generated a lot of uncertainty in transatlantic commercial politics, which isn’t good for anybody. Businesses like a stable political environment, not freefall.

Read the full post at The Washington Post