Congressional Delegation Discusses Privacy and Taxes with EU

(February 24, 2000) Rep. Goodlatte, Rep. Boucher, and other members of a Congressional delegation are in Europe to meet with their counterparts during this week's recess of the House of Representatives. They have discussed Internet privacy and taxes.

On Tuesday, February 22, both Rep. Bob Goodlatte (R-VA) and Rep. Rick Boucher (D-VA) testified before the European Parliament regarding privacy on the Internet.

	Rep. Bob Goodlatte (R-VA)

"Now is the time to act and bring these protracted negotiations to a positive result," said Rep. Goodlatte. "Establishment of a safe harbor agreement is the most practical way to resolve the potential disruption of the transborder flow of data from the EU to the United States and the rest of the world."

"We commend Commerce Undersecretary David Aaron and European Negotiator John Mogg for their diligent work over the past few years, and we hope that the two sides will be able to reach a safe harbor agreement now that addresses concerns on both sides of the Atlantic."

The European Parliament enacted a privacy directive in 1995 that established a sweeping prohibition on the use of any personal data without the explicit consent of the person involved. It would allow transfers of data to or through a country only if it maintains standards deemed to be adequate by the European Union. It would have the effect of preventing many e-commerce companies from doing business with customers in Europe. It was to have gone into effect in October of 1998, but has been postponed as the U.S. and European Union have negotiated.

The Congressional delegation is made up of Goodlatte, Boucher, Chip Pickering (R-MS), Bart Gordon (D-TN), Charles Canady (R-FL), and Cliff Stearns (R-FL). Rep. Boucher and Rep. Goodlatte are both co-chairman of the Internet Caucus. In addition, both are members of the House Judiciary Committee, and its Courts and Intellectual Property Subcommittee, which have jurisdiction over much high tech legislation. Rep. Boucher is also a member of the House Commerce Committee, and its Telecom Subcommittee, which also have jurisdiction over many high tech bills.

Rep. Canady also sits on the Judiciary Committee. Reps. Pickering, Gordon, and Stearns are all members of the Commerce Committee.

	Rep. Rick Boucher (D-VA)

"As the Internet continues to play an increasingly important role in our lives, the protection of personal information will be crucial to ensuring that consumers feel secure in using the Internet for electronic commerce," Rep. Boucher said. "We hope that both the US and EU negotiators will reach an agreement soon that will avoid major disruptions in global e-commerce activity while protecting consumers online."

The European Parliament held hearing titled "The European Union and Data Protection" on Tuesday, February 22, and Wednesday, February 23. The hearing was conducted jointly by the Committee on Citizen's Freedoms and Rights, Justice and Home Affairs and the Committee on Legal Affairs and the Internal Market.

The committees heard from members of the two committees, European Commissioners, including John Mogg, Internet and privacy experts, and members of the U.S. Congressional delegation.

Marc Rotenberg, Executive Director of the Electronic Privacy Information Center (EPIC), a Washington DC based group which advocates privacy rights, was one of experts invited to speak.

Rotenberg argued vehemently against a "safe harbor" agreement. He stated:

"The Safe Harbor proposal now before the European Union threatens the interests of consumers around the globe. It is an assault on the rule of law and the right of privacy. It asks consumers to give up their legal claims and to turn away from institutions with the authority and the competence to protect privacy interests and to accept instead a deeply flawed regime that is intended to put basic rights up for sale to the highest bidder. Far from a safe harbor, the proposal is in fact a "pirates cove," a scheme to take from people what can only be taken where there is no law and no regard for law."

Internet Taxation

On Monday, February 21, the Congressional delegation attended an international conference called "The Information Edge." It was held at the Wilton Park Conference Center near London, England.

Members of the U.S. delegation expressed skepticism about proposal of various representatives of EU nations to apply the existing value-added-tax (VAT) to digital goods sold online. The VAT averages about 20 percent in most European nations.

"Whether in the United States or in Europe, existing tax schemes do not work in the digital world," said Rep. Goodlatte. "We must work with other nations to ensure that the current economic boom of electronic commerce is not hindered by reckless, restrictive taxation on the Internet."

"States that are reducing or eliminating sales taxes, whether on Internet transactions or on general goods and services, are booming from the influx of businesses moving into these areas, creating jobs and expanding the economic base. We must continue to encourage states in the U.S. and nations around the globe to keep the Internet free from burdensome regulations and taxation," said Rep. Goodlatte.

The U.S. delegation also met Monday with U.K. Financial Secretary Stephen Timms and Special E-Envoy Alex Allan.

Intellectual Property

The Congressional delegation is also scheduled to travel to Geneva, Switzerland, to meet with representatives of the World Trade Organization (WTO) and the World Intellectual Property Organization (WIPO).