Europe, with a mere 15% of Web traffic, is setting out to protect privacy in cyberspace. On Oct. 25, the European Union Data Protection Directive goes into effect, and unless the U.S. and Europe quickly agree on how it is implemented, electronic commerce on the Net could grind to a halt and the first digital trade war ensue.
The European approach relies heavily on government intervention. Germany's data police, the Datenschutz, regularly travel from Berlin to Citibank's giant data-processing center in Sioux Falls, S.D., to check that the information on four million German credit-card holders is being handled according to European law. After Oct. 25, commissioners in Brussels will have the legal tools to prosecute companies and block Web sites that don't live up to strict standards on data privacy.
Washington is negotiating for a more voluntary system on the U.S. side. It calls for self-regulation and for new software to let customers decide if they're willing to share their personal data, to what end, and with whom.
It is essential for the U.S. and Europe to reach an agreement that guarantees privacy in cyberspace. Without it, people will never feel comfortable conducting business online.