INT'L PRIVACY DISPUTE NEARLY SOLVED: U.S. AND EUROPEAN UNION APPROACH AGREEMENT ON MARKETING ISSUES

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The U.S. and the European Union are getting closer to resolving a privacy dispute that threatens to cause major woes for marketers.

At issue is a European Union directive that bars transfer of personal information gathered in Europe to countries without equal privacy restrictions. It also gives consumers the right to access and review information that companies collect.

U.S. Undersecretary of Commerce David Aaron and European Union Director General John Mogg met last week and reported major progress in talks.

"We made progress on virtually all areas," said Mr. Aaron. Mr. Mogg said the two "narrowed the gap."

Both said they hoped to have an agreement in the next two months that could be presented at a scheduled June 21 E.U.-U.S. summit.

U.S. SEEKS SAFE HARBOR

The U.S., with the support of major companies, has argued that legislation isn't needed in order to comply with the directive. Self-regulation through membership in a industry group that can demonstrate effective enforcement of privacy standards should be considered to be an adequate "safe harbor," according to the U.S.

Mr. Mogg called the "safe harbor" concept "good and constructive. It offers a way to deal with a complicated area in a pragmatic way."

Both he and Mr. Aaron said the negotiations are now concentrating on what constitutes an adequate safe harbor, as well as the issue of how much access consumers will get to information and at what point.

Some marketers are concerned that too easy access would open the floodgates to repetitive and expensive requests.

"We are very supportive of the process but concerned about the safe-harbor provision," said a spokesman for America Online. "We are supportive of the idea, but want to make sure that language continues to promote the growth of the medium."

NEW PRIVACY PROGRAM

The Council of Better Business Bureaus, which two years ago began offering an online reliability seal to its members, unveiled a new BBB Online Privacy Program it will offer to all Web sites. The new privacy program's seals require specific steps to assure the privacy of information gathered and ensure that consumers will be given a choice before information can go to a third party.

BBB officials said they hope membership in the program would be sufficient to qualify as a "safe harbor."

Privacy advocates last week questioned whether the programs offered by BBB Online or rival TRUSTe were sufficient to protect privacy.

The BBB program "seems to be along the lines of earlier proposals that view the privacy problem as a lack of a posted policy," said David Sobel, general council for the Electronic Privacy Information Council. "Anybody who sees it that way

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