EU Data Privacy Reform Debate Sparks Heavy, Not Necessarily U.S.-Style, Lobbying in Brussels

Public interest groups have claimed that EU attempts to strengthen privacy rights were being watered down by European Parliament members (MEPs) under intense pressure from U.S. Internet companies (CD Feb 21 p10). Last month, the European Parliament Civil Liberties, Justice and Home Affairs (LIBE) Committee approved a compromise package for reform of data protection rules (CD Oct 22 p7). The new text isn’t likely to ease all of the U.S. or European companies’ concerns, said Lisa Peets, an attorney with Covington Burling, which actively lobbies for businesses in a range of sectors including technology. After the LIBE vote, European Justice Commissioner Viviane Reding applauded EU lawmakers for proving that “excessive lobbying can be counter-productive.”

Where is the pressure coming from? LobbyPlag.eu, a cooperative effort by OpenDataCity in Germany and europe-v-facebook.org in Austria that analyzes proposed legislative amendments to the data protection regulation, “registered very massive lobbying from the US industry and government,” spokesman Max Schrems said in an email. That’s reflected in LobbyPlag’s findings and “in line with what most MEPs in the European Parliament have said,” he told us. Some lawmakers have even talked about a “lobby war” they haven’t seen in Brussels before, he said. Some said the data protection regulation “brought a very aggressive form of ‘US style’ lobbying to Brussels that goes beyond pointing out problems but really dives into massive pressure on decision makers,” he said.

The data protection bill is a particularly complex piece of legislation, said Peets. The only other time she has seen as much, if not more, lobbying on an EU measure was during the attempt several years ago to codify the rules on patentability of software in Europe, she said. No one expected controversy, but many open source and Internet freedom groups came together, resulting in the European Parliament voting the proposal down because it couldn’t reach agreement, she said. The data protection regulation may or may not have been as heavily lobbied, she said. Extensive news reports about U.S. companies being particularly active in the privacy debate create a “misleading” impression that only U.S. companies care about the proposed reform, but European companies are also concerned about the rules, she said. U.S. providers are to some extent being “tarred by the same brush,” said Peets. They are all being accused of trying to weaken EU privacy rules, but many simply seek rules that are workable, she said.

The pressure comes from “onion lobbying,” consisting of layers of contact, said European Digital Rights Executive Director Joe McNamee. Some is done in the name of the companies, a lot is through sector-specific associations, some via general business associations and some through “Astroturf” organizations that appear to be grassroots but are actually fronts for corporate interests, he said. Other lobbying comes from related organizations that have been led to believe in the interpretations of the big lobbies, he said. It all creates “a cacophony of voices giving the impression of far greater levels of opposition than really exists,” he said.

Several provisions in the draft law raise concerns for industry, Peets said. The regulation is “incredibly broad and incredibly granular,” with very detailed rules on how to handle personal information, she said. From a compliance perspective, some provisions are burdensome and nearly impossible for some companies, especially in the tech sector, to deal with, she said. One big area of contention is data transfers out of Europe, she said. The EU also wants to extend the rules beyond its territory and apply them to non-EU-based companies even when those businesses have only nominal links with Europe, she said. This “gores everyone’s ox” because it would drag a wide range of organizations that handle personal data into the EU’s universe, she said. That the EC called for penalties for breaches of up to 2 percent of a company’s worldwide sales, and the parliamentary compromise is for 5 percent, also encourages companies to engage on the issues, she said.

The legislation would force Google, Facebook and others to provide proper privacy protection throughout the world, because it wouldn’t be feasible to separate their systems into EU and global networks, Schrems said. There is generally a stronger tendency to protect consumers, employees or “little guys” in Europe, he said. This is clashing with more-liberal approaches in the U.S. to the global cyberspace, he said. U.S. companies have been mostly able to ignore the differences, but as the EU grows more frustrated and proposes heavy fines and proper enforcement, “this seemed to have triggered the backlash from the U.S.,” he said.

The difference between lobbying in Brussels and Washington is “pretty dramatic,” said Peets. There are 28 EU countries in the Council to navigate around, as well as the Parliament and EC, she said. Lobbying has to take place at the national and EU levels, she said. To be effective, one must truly understand the political system, and Brussels has some complexities not found in Washington, said Hogan Lovells attorney Raymond Calamaro, who represented clients before the EU institutions for five years in the 1990s and whose firm has so far not lobbied on the EU privacy regulation. There are some 24 different languages, and EU members, through the Council, have a role in lawmaking that U.S. states don’t, he said. In general, however, “even as it has grown and become a part of life in Brussels, it’s probably accurate to say that lobbying is not as fully accepted in Europe as it is in Washington,” he said.

Another divergence is in the fact that in Brussels, civil society groups have “an incredible amount of influence” and tend to be better received than corporate lobbyists, said an industry official. The EU is also radically different from the U.S. in terms of the money aspect of lobbying, she said. Influencing policymakers in Brussels relies more on advocacy and the merits of the debate than on money, she said.

Lobbyists in Brussels are “every bit as sophisticated as those in Washington,” Calamaro said. The business of lobbying in the EU is changing, becoming more developed and pervasive as a profession and as an activity that affects the EU institutions, he said. The Organisation for Economic Co-operation and Development said (http://xrl.us/bp4j3v) the number of lobbyists and the amount of money spent on lobbying is on the rise, with around 5,000 registered lobbyists at the EC and Parliament and an estimated 15,000 lobbyists in Brussels, Calamaro noted.

As with Washington, when central authorities make laws and policies affecting hundreds of millions of people as well as many industries and other stakeholders, it’s difficult for policymakers always to get it right, or as right as possible, without “substantial and detailed input from those affected,” said Calamaro. The challenges facing lawmakers get more complex as societies do, resulting in a need for professionals who can “educate” and advocate to those officials, he said. Data protection is an excellent example, said Calamaro. The traditional ways for reaching consensus on the making of laws and policies -- by, for example, relying on guidance from labor groups, industry and employer associations and environmental organizations that were and in many cases are still typical of EU countries -- “are not sufficient for Brussels and the EU,” he said.

Is Brussels lobbying becoming more Americanized? “Not necessarily,” Calamaro said. There are obvious similarities between how lobbying is done in both places, but there are also many differences, including those of “style,” he said. One difference is that U.S. law requires public disclosures of paid lobbying, while the EU has a voluntary “register.” Another difference is that the relationship between political contributions and lobbying that exists in the U.S. isn’t present in Brussels, “at least not openly and not yet,” he said. McNamee said by email that “this is very much going the way of US lobbying.” The transparency register is “totally inadequate to cope with this,” he said.

Parliament “has overall made a very good proposal [for data protection reform], but it took massive pressure from the public in Europe to achieve this result,” said Schrems. “The bigger problem now is that reform is stuck in the Council because national administrations don’t want to give up their sovereignty or because industry lobbying has worked better there.” Peets said it’s hard to predict where the data protection legislation will go. Parliament’s action is the very beginning of what could be a two-year or longer process of adopting the measure, she said. The “whole thing could die” when the EC and Parliament membership change next year, she said.