Future of the “safe harbor” arrangement for personal data transfers to the U.S.

On Wednesday, 15th January 2014, the European Parliament will have a debate the the ‘Future of the Safe Harbour Agreement in the light of the NSA affair’. The agreement in question is an arrangement between Europe and the U.S. which dates back to the year 2000.

In 1995, the then European Community adopted a Directive “on the protection of individuals with regard to the processing of personal data and on the free movement of such data”. The Directive prohibits the transfer of personal data to non-European Union countries that do not meet the European Union (EU) “adequacy” standard for privacy protection. As the U.S. takes a different approach to privacy from that taken by the EU, there would be a genuine risk that U.S. organisations, while respecting U.S. rules and regulations, might not comply with the EU “adequacy” standard.

In order to bridge these differences in approach and provide a streamlined means for U.S. organizations to comply with the Directive, the U.S. Department of Commerce in consultation with the European Commission developed a “Safe Harbor” framework. The arrangement was codified into European law by a Commission Decision of 26 July 2000.

Under the “safe harbor” arrangement, U.S. organisations respecting the U.S. standards for privacy protection are deemed to meet the EU “adequacy” standard and consequently nothing stands in the way of personal data transfers between the EU and the U.S. However, the revelations on the activities of the NSA have triggered a debate on whether the EU ädequacy” standard can be met by U.S. organisations as, under the Patriot Act, these organisations are required to collaborate with the NSA and they are not allowed to reveal to anyone if and to what extent they are forced to collaborate with the NSA. Besides, the U.S. privacy protetction standards are much lower for non-citizens then they are for U.S. citizens.

The value of monetization of company data in 2012 was estimated at € 50 billion, while  the monetization of personal data of consumers had reached the level of € 250 billion. The total amount of € 300 billion is expected to triple by the year 2020. See also the study by the Boston Consulting Group commissioned by Liberty Global.

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Home copying levies revisited

Under the current system of private copying levies an estimated € 600 million is collected annually by collective rights management organisations. The European Parliament is about to strengthen and expand the system. The levy should in the near future apply to “all material, media and services whose value resides in their private recording and storage capacity”. Moreover, the idea is to extend the levy system to content stored in the cloud. At the same time, at least 25% of the levies collected will have to be earmarked “to promote the creative and performance arts”. The idea that the private copying levy system could be replaced by a licensing system (as in the case of online music sales) is rejected.

In part, the rules proposed in the Draft Report seem to go against the opinions expressed and the recommendations made by António Vitorino in his Report of 31st January 2013 following the mediation on private copying and reprography levies.

On Monday, 13th January 2014, Rapporteur Françoise Castex will deliver a short presentation of the Draft Report on private copying levies which she has been preparing for the Committee on Legal Affairs . The presentation will take the form of a one-minute speech under a procedure which is reserved for matters of political importance.

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Review of the EU copyright rules

On 5th December 2013, the European Commission launched a Public Consultation on the review of the EU copyright rules. The deadline for submissions was set at 5th February 2014.

Although the consultation is said to focus on the EU copyright regulatory framework in general, all questions seem to relate to the internet.

This Public Consultation provides a unique opportunity for the parties in the vertical value chain of production and distribution of audiovidual media services (producers, broadcasters, aggregators, operators of distribution platforms) to promote an entirely new system. The current system is inefficient for reason that it requires an ever increasing number of transactions (with an increasing number of collective rights managment organisations, all representing only parts of the rights required and/or only parts of the right holders in a certain category of rights). The current system also leads to continuous litigation  and hampers or delays the development of new and innovative services. It would be much better to find commercial solutions.

X-Media Strategies knows how to achieve this goal and has been deeply involved in the ongoing process in The Netherlands to replace the system of collective rights management by commercial agreements between all parties in the value chain.

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