US data security threat to world trade

European companies should pressurise their US trading partners to improve data security and privacy, according to a senior...

European companies should pressurise their US trading partners to improve data security and privacy, according to a senior advisor to the British Chambers of Commerce.

Sally Low, a senior policy adviser on e-business and regulation at the British Chambers of Commerce, made the recommendation after a report by the professional services organisation Andersen attacked US data security standards.

Andersen claimed that the majority of US companies do not adhere to Safe Harbour, the security guidelines established jointly by the European Union and the US last year. 

Andersen questioned 75 of the top 500 companies in the US and found that none of them adhered to all six Safe Harbour principles. "This is very worrying," said Paola Bassanese, an e-business analyst at Ovum. "People just assume that because the guidelines have been developed, people will follow them." 

Andersen claimed the scale of the breaches could threaten international trade. "The EU could block data transfer to US companies that don't meet the Directive's [the EU Directive on Data Protection] requirements," said Andersen principal analyst Kerry Shackelford.  

The Safe Harbour principals are only guidelines, so there is no authoritative body to enforce them. Bassanese believes the problem will continue until such a body is appointed.  

Bassanese also called for European companies to put pressure on their US trading partners to adhere to the rules. "This is all to do with peer pressure," she said. "If your business has a lot of influence over a US company, that will get the ball rolling."

Sally Low told CW360: "We can't police how US companies operate - but we will be flagging-up the issue with UK businesses this autumn.

"We will be making a major set of policy proposals to the e-commerce minister, covering every burning issue for businesses involved in ICT, e-commerce and e-business trading. Security and privacy of data will be part of the agenda."

In the absence of any authoritative body in the US to enforce the guidelines, Low agreed with Bassanese that peer pressure was the best way forward. "If UK businesses are well-informed about Safe Harbour, and are trading with a US company, then they are in a good position to pass on best practice," she said. "It is all about being prepared, good communication and negotiation."

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