EU Fails to Speed Up Privacy Rule in Spite of Merkel Spy Tension

European Union leaders dropped a 2014 deadline to complete an overhaul of the bloc’s data privacy laws even as they condemned allegations that the U.S. eavesdropped on German Chancellor Angela Merkel.

Leaders called for a strengthened data-protection law to be introduced in a “timely” fashion. A draft version of their summit statement had language seeking its adoption next year. A U.K.-led group urged a slowdown to consider the effect of the legislation on businesses.

“We stressed that we have to speed up the work, but it is a complex task. It’s not only related to the already difficult issues of protecting privacy, but it is also an impact on business,” EU President Herman Van Rompuy said after the first day of a two-day summit. “We have to study this carefully.”

The overhaul of the privacy law, which could result in U.S.-based companies including Google Inc., Facebook Inc., and Apple Inc. facing fines as high as 100 million euros ($138 million) for data-protection violations, was endorsed by a panel of EU lawmakers this week. National governments have to agree to the proposals before they can become law. At the summit, leaders called for adoption of the law as part of the introduction of new telecom rules in 2015.

“We think there’s too much red tape in the proposal,” Markus Beyrer, director general of European business federation BusinessEurope, told reporters before the summit. “We think there are too many things which might hurt data flow, which might hinder growth.”

Under the draft rules backed by the EU lawmakers’ panel Oct. 21, social networks or search-engine operators that get requests to transfer or disclose data processed in the EU would need the permission of national regulators. They would also have to inform the person concerned.

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