Privacy law may scupper e-trade

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THE FUTURE of electronic commerce between Europe and America could be threatened by a row over unified European laws about data privacy. From this summer, it will be an offence for European companies to pass data about customers - such as names, addresses, telephone numbers and credit information - to American organisations.

Though the laws are partly intended to stop unscrupulous companies in foreign countries bothering people in Europe with unwanted sales pitches, the prospect has many British and American marketing companies "very worried", according to industry sources, who fear that it could create the electronic equivalent of a trade war.

"It is an inhibitor to global electronic commerce," said Colin Lloyd, chief executive of the Direct Marketing Association (DMA). "We are wrestling with exactly what the solution is, because direct marketing is becoming an international phenomenon."

The Data Protection Registrar in Berkshire said that it is receiving hundreds of calls each month from firms worried about the effect that the dispute could have on their business.

The US and Europe had hoped to find a formula for agreement by the end of April, but a meeting last week broke up without a solution.

British companies with direct marketing arms in the US will face problems if no solution is found. "If you rang their European office, they could not pass your phone number to the US office for them to call you back," said Mr Lloyd. "It's a real barrier to trade."

David Banisar, policy director for the Electronic Privacy Information Centre in Washington, said: "Europeans are treating privacy as a fundamental human right and they want to protect their citizens as much as they can. The US position is based on American industry's position that privacy is a commodity that should be traded."

The Data Protection Act in Britain says that companies must register with an independent body if they process data about people. The US has no such registration process.