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January 10, 2013

EU Competition Commissioner Warns About Stricter Data Restrictions on Internet Firms
By Shankar Pandiath
TMCnet Contributor

European Union lawmakers hope to revamp the regulations on Internet firms in order to protect consumer data.

The rise of the Internet in the recent years has transformed the global information ecosystem. There are estimated to be more than two billion Internet users, in addition to over five billion mobile phone users continent-wide.

Along with the ability to distribute messages or images to a potentially unlimited audience, the Internet has also created the possibility for people to organize themselves in collective networks, giving the Web an increasingly prominent place in social media, for arguments over political mobilization and debate around the world.

Current estimates suggest over 60 hours of YouTube (News - Alert) video are uploaded every minute, permitting click-through advertising firms to make billions in annual revenue. However, the EU is determined to keep privacy and data protection regulations strict.

EU competition commissioner Joaquin Almunia said in November that online service providers could find themselves in breach of antitrust law if they prevent customers from moving their personal data to rival services, and proposed last year fines of up to 2 percent of turnover for companies that breach Europe's data protection rules.

Internet companies such as social networking site Facebook and Google may have to get additional permission from their users, if EU lawmakers give users more control over their personal data. EU legislators want to limit companies' ability to use and sell data through consumer information related to things like online browsing habits, especially when people are unaware their data is being used in such a way.

The kinds of data online companies collect and store on a regular basis include browsing habits, messages and photos. Often this data is used to tailor third-party advertising to a user, or is sold for market research purposes.

"Users must be informed about what happens with their data," said Jan Philipp Albrecht, a German Member of the European Parliament keen on the reform told the publication. "And they must be able to consciously agree to data processing – or reject it."

Albrecht also added that national authorities should be allowed to levy fines ranging from 0.5-2.0 percent of annual turnover for compromising customer data, which could mean losing or divulging the data.

Erika Mann, head of EU policy for Facebook (News - Alert), said they were concerned that some aspects of the report do not support a flourishing European digital single market and the reality of innovation on the Internet.

A number of firms, including Google (News - Alert) and Facebook, are lobbying against the proposed reforms, arguing that such regulation could have a negative impact on business and innovation, especially considering the international nature of the digital platform.

Privacy lobbyists say companies do not take sufficient consideration of users' privacy concerns. "They may do so if they feel that their reasons for doing so are more compelling than the individual's right to privacy," said Joe McNamee, a privacy advocate in Brussels.

The 27-country strong European Commission will begin debating the regulations within the coming months. High-ranking politicians in the European parliament are lobbying for the maximum fine to be no more than 1 percent of turnover, saying anything higher could push big data offshore.

Albrecht's final report will voted on in April 2013.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO Miami 2013, Jan 29- Feb. 1 in Miami, Florida.  Stay in touch with everything happening at ITEXPO (News - Alert). Follow us on Twitter.


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