The U.S. Could Use A Dose Of Europe's Privacy Medicine

The European Union has just enacted a new law for the protection of privacy that raises intriguing questions about the relationship between property, liberty, government, and the rules of global trade. It also portends more conflict between the U.S. and its European trading partners, as their economies become ever more tightly linked.

The EU's directive, which took effect on Oct. 25, drastically limits the ability of companies to market data on consumers, something taken for granted in the U.S. This is not a case of pointy-headed bureaucrats running amok. The EU's policy reflects what has long been a much tougher approach to consumer privacy throughout Europe. The directive requires member nations to enact conforming national laws. Six countries comply now.

Most of EurOpe already limits telemarketing. The new rules extend this to junk faxes and E-mails. The existing laws of individual EUropean nations have stricter rules on commercial data collection, as well as entire agencies making sure government and private data on citizens are used only for their original purposes. To some extent, these safeguards reflect a greater European anxiety about Big Brother, given the Continent's experience with totalitarianism. Yet they recognize--appropriately--that Big Brother can be a commercial data bank as well as a state agency. Americans have resisted government-issued identification cards as an invasion of liberty and privacy. Most European nations use such cards, with important benefits to law enforcement and public health, but balance them with comprehensive privacy protections.

COMMON LAW. France and Germany, among other nations, legally codify a right to privacy. The U.S., supposedly the more libertarian nation, has no such generic right. Rather, as Supreme Court Justice Louis Brandeis long argued, the fundamental right "to be let alone" can be inferred from the common law. If I publicly disseminate your personal letters, I may be sued for appropriating a literary work or for violating an implicit contract--but not necessarily for a more general breach of your privacy.

The new EU directive creates a general right for citizens to opt out of private databases. If a citizen requests it, data collected for one purpose--say, a credit-card purchase--cannot be bought and sold for other purposes. This provision is a deadly assault on the now-vast direct-marketing industry, and it affects anyone selling to a European conSumer, including an American company.

U.S. trade negotiaTors are fighting this directive, on the grounds that it violates free trade. This is a battle they are likely to lose. Indeed, the Europeans are not content simply to protect European consumers. The EU also wants the U.S. government to increase privacy safeguards for American shoppers. If this demand seems a little cheeky, please recall that the U.S. has long thrown around its weight on trade matters. We want the Japanese to change their distribution system; the Brazilians to accept our conception of intellectual-property protection; the French to modify their cultural policy; the Canadians to cut subsidies; and the Middle East to accept American norms of what constitutes bribery.

AMERICAN RULES. As different customs and systems of laws become interlinked by trade, common ground rules for commercial practices must be negotiated. But the laws of commerce slop over into cherished national customs and values. Notwithstanding post-cold war rhetoric about the "end of history" with its facile claim that there is one true model of capitalism and democracy (which just happens to be the American one), it is not realistic to expect that other nations will simply embrace American rules. It doesn't work to say that we are simply enforcing "free trade," because issues of property rights in databases and intellectual property are legal constructs that may reasonably differ from country to country.

It's more likely that the U.S., as well as Europe, will need to compromise if there are to be viable rules for global commerce. That's not such a bad thing. Although libertarian ideology holds that property rights are paramount--even that they anchor other rights--the reality is considerably more complex. A telemarketer's right to invade my dinner or an insurance company's view of my medical records as mere property must be balanced against my rights as a citizen. We Americans happily import sophisticated European products--French wines, Italian fashions, German autos. We should consider importing Europe's more evolved and balanced conception of privacy.

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