EC lobbied over data sharing across borders

International business groups are stepping up pressure on the European Commission to rethink proposals to regulate the way...

International business groups are stepping up pressure on the European Commission to rethink proposals to regulate the way businesses share data across international borders.

Businesses are concerned that Europe has gone beyond existing data protection laws by asking companies to sign "model contracts" governing the way they process data outside of the European Union.

Seven international business groups, including the CBI and the International Chamber of Commerce, have joined forces to campaign against the proposals, in one of the most concerted lobbying campaigns on data protection to date.

The model contracts are designed to protect the privacy of European citizens when companies share data with overseas branches or use overseas contractors to process data for them.

However, business organisations believe the model contracts are too complex for companies to implement and will place heavy burdens on European companies, putting them at a competitive disadvantage.

Christopher Kuner, data protection lawyer, at Morrisson & Foerster, which is representing the organisations, said, "Europe is the only region that has these model contracts. It has more fully developed restrictions on data transfer than other regions. It is really an additional burden."

The business groups presented the commission with an alternative model contract that, they said, will still protect privacy and yet be simple enough for businesses to implement.

One of the key changes has been to remove a clause in the EC's model contract that requires businesses to sign a standard indemnity clause, something that they find hard to accept, said Kuner.

The business groups said parties signing the contracts should be able to resolve disputes in court or through the Data Protection Commission, rather than being forced to go through potentially time-consuming mediation and arbitration.

"We are going for a speedy resolution. I think it is fairly urgent. Business needs a solution now," said Kuner.

Separately, UK investment banks are pressing the EC to approve a draft data protection policy that will allow multinational companies to transfer data between overseas branches without signing multiple contracts.

Further information
Model contracts:

Read more on IT legislation and regulation