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U.S. Must Tighten Privacy Laws to Boost Trust, EU’s Reding Says

Oct. 29 (Bloomberg) -- The U.S. must tighten its privacy rules or risk harming relations with the European Union, the EU’s justice chief said in the wake of a scandal over reports America hacked German Chancellor Angela Merkel’s mobile phone.

The U.S. “will have to show that they treat Europe as a real partner” and that they take the 28-nation EU’s concerns about privacy and data protection seriously, EU Justice Commissioner Viviane Reding said in prepared remarks for a Washington speech.

“The revelations about the activities of American intelligence agencies in Europe and the damage this has caused have brought renewed attention to this issue,” Reding said today. “The concept of national security does not mean that ‘anything goes’ -- states do not enjoy an unlimited right of secret surveillance.”

European leaders last week condemned the reported U.S. hacking of Merkel’s cellphone and said they will seek trans-Atlantic accords on espionage practices. Still, they rejected calls from some European politicians for a suspension of trans-Atlantic trade talks that have export-oriented Germany as a prime backer.

The EU is debating an overhaul of its data protection rules dating back to 1995. A proposal put forward last year by the European Commission, the EU’s regulator, would also hold U.S. companies such as Google Inc., Facebook Inc. and Apple Inc. liable for violations such as unauthorized transfers of data on EU citizens to non-EU countries. Fines could be as high as 100 million euros ($138 million), according to draft rules backed last week by a European Parliament committee.

Coherent Rules

“Once a single, coherent set of rules is in place in Europe, we will expect the same from the U.S.,” said Reding. “Control of every movement, every word or every e-mail made for private purposes is not compatible with Europe’s fundamental values or our common understanding of a free society.”

The EU and U.S. began negotiations earlier this year on a free-trade agreement, which would expand the world’s biggest economic relationship by removing tariffs, easing regulatory barriers and increasing access in investment, services and public procurement.

Reding warned the U.S. that the privacy concerns may derail the trade talks.

“Including a legal provision on judicial redress for EU citizens, regardless of their residence, in the forthcoming U.S. Privacy Act is an essential step towards restoring trust among partners,” said Reding. “Restoring such trust will be very much needed if we want to successfully conclude” the trade negotiations.

To contact the reporter on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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