The European Commission through its latest European Data Protection Directive that is scheduled for release by January can impose fines on companies who violate its laws including even those based in the United States.
Such imposition of fines by the Commission can largely affect big-time companies like Facebook, Microsoft and Google. This may mean fines that come in billions of dollars worth of profits for these United States-based organizations.
Once a company breaches European data protection laws, the Commission can impose fines as high as five percent of the global turnover of that company. Similarly, the current European law also enables the Commission to impose such fines for breaching antitrust laws that can be as high as ten percent of the global turnover of a company involved. This is also regardless of the company’s headquarters, be it in Europe or elsewhere.
When companies operate in Europe, even if they are based in the United States, these organizations are obliged to follow laws from both United States and Europe. The new directive also includes plans of forcing organizations to notify clients and data protection authorities once data has been compromised. With such measures, companies from the United States who operate in Europe would be forced to reinforce their current data protection policies. Under the trans-Atlantic data sharing agreements, data protection laws in the United States are being reviewed.
On the other hand, there are members of the European Parliament who are still worrisome about the law. They are seeking for emergency legislation to address the existing flaws on third-country legislation that they fear may not be patched by the new directive. Over half a dozen members of the European Parliament coming from the lower house are bidding to enforce the law today and not in the future.
According to the European Commission’s Vice President Viviane Reding, current laws being applied by the 27 member states would be amended by the data protection directive in order to protect the interest of Europe from third-country legislation.
The former head of the legal office of the data protection authority in the United Kingdom Rosemary Jay welcomed Reding’s speech but also made mention that the solution towards the issue of third-country laws could be more difficult to solve than what Reding suggests.
