Clock ticks on data privacy bill

Lawmakers are coming down to the wire on privacy legislation some say is critical to securing a data transfer deal between the U.S. and European Union before a month’s end deadline.

The tight timeline worries some supporters of the bill, who believe it will help Commerce Secretary Penny Pritzker and her European Commission counterparts hammer out a new Safe Harbor agreement.

“The clock is ticking on the Safe Harbor negotiations. And every day we delay is another day we’re closer to a potential catastrophe for U.S. tech companies,” Sen. Chris Murphy (D-Conn.) told The Hill Thursday.

{mosads}The Senate Judiciary Committee on Thursday delayed by a week discussion of the so-called Judicial Redress Act, which would grant European citizens a key Privacy Act right: the ability to sue in U.S. courts if their personal data is mishandled.

Co-sponsored by Murphy and Sen. Orrin Hatch (R-Utah), the bill passed unanimously in the House last year, but has languished in the Senate — despite being largely uncontroversial.

Supporters have linked the bill to Safe Harbor, arguing that Europe’s concerns about privacy protections in the U.S. have been a roadblock in the negotiations. Swift action on Judicial Redress, they say, would help assuage those concerns before the Jan. 31 deadline, when Europe’s privacy regulators have vowed to begin taking enforcement action against U.S. firms.

Businesses say the consequences for cross-Atlantic trade, should Pritzker and lead European negotiator Vera Jourova fail to reach an agreement, would be dire.

The original Safe Harbor agreement negotiated in 2000 allowed over 4,000 U.S. firms — from the hospitality industry to social media — to legally handle European citizens’ data by “self certifying” that they met Europe’s more stringent privacy requirements.

The deal helped make the U.S.-EU economic relationship unsurpassed in the world, with bilateral trade that topped $1 trillion in 2014.

But the EU high court struck down the pact last year, blaming endemic privacy failures in the U.S. One of the specific complaints was a lack of judicial redress for European citizens who feel their privacy has been violated.

The ruling has left firms scrambling for alternatives, many of which businesses say are cumbersome and cost-prohibitive.

Although some critics call the court decision overly political, others see it as an unfortunate result of systemic European distrust of the American approach to privacy in the wake of ex-government contractor Edward Snowden’s revelations about the extent of National Security Agency snooping.

Immediately following the ruling in October, a group of tech giants — Google, Microsoft and Yahoo as well as several technology and Internet industry groups — urged lawmakers to pass the Judicial Redress Act.

“The enactment of the Judicial Redress Act is a critical step in rebuilding the trust of citizens worldwide in both the U.S. government and our industry and in addressing the misperceptions underlying the decision,” they said in a letter to House leadership.

“Restoring that trust is essential to continued cross-border data flows, which is vital for the continued competitiveness across all American industries.”

The Software and Information Industry Association (SIIA), whose members include Google, Facebook and others, also called for action in light of the looming deadline.

“SIIA would like to see a quick enactment of the Judicial Redress Act, which appears to be a critical element for European approval of a revised Safe Harbor agreement,” David LeDuc, Senior Director of Public Policy, told The Hill in a statement on Friday.

Others are more skeptical about the bill’s importance to the final negotiations over Safe Harbor. While the bill is a prerequisite for a separate agreement pending between the U.S. and EU, on data sharing between law enforcement, it is not a red line in the Safe Harbor negotiations.

“It could certainly make things easier, but it’s not a necessary condition — it wouldn’t hurt negotiations to have it, but it’s not necessary,” Adam Schlosser, director of the U.S. Chamber of Commerce’s Center for Global Regulatory Cooperation, said Thursday.

They say the bill’s real impact is more broad than just Safe Harbor — its value is to the overall health of the relationship between the U.S. and the EU, tarnished by Snowden’s disclosures.

“It’s important to the big picture of the relationship,” said Cameron Kerry, senior counsel at Sidley Austin and formerly the chief international negotiator for privacy and data regulations at the U.S. Department of Commerce. “In that sense, it’s unfortunate that it got moved back, but it does not have a direct impact on Safe Harbor.”

But while a week’s delay might not have a huge impact on the resolution of the negotiations, Kerry noted that it is still a huge step towards securing the support of the European Parliament for a new agreement.

“In the long run I think it’s important to get this legislation done because it’s certainly going to have an impact on the environment in Parliament, the broader political environment, that are important to getting buy-in to any agreement on this Safe Harbor framework,” Kerry said.

Those familiar with the Senate Judiciary Committee say the decision to hold the bill for another week was normal. A committee aide said that although the bill was pushed back at Hatch’s behest, the panel generally does not discuss legislation until the second time it’s on the agenda, something that happens “a few times a year.”

“I don’t know of anything holding it up,” Hatch said Thursday. “It generally takes a put over for a week. It’s just a standard practice.”

He said the bill would likely be marked up the following week.

But supporters of the bill are still mystified that a relatively uncontroversial measure has so far failed to move forward.

“It’s hard for me to understand why a bill that passed unanimously in the House is running into so much trouble in the Republican caucus here,” Murphy said.

Meanwhile, although negotiators on both sides of the Atlantic have expressed confidence that they will meet their Jan. 31 deadline, a fight over national security measures continues to stymie agreement.

“It’s time for us all to acknowledge that we’ve gone as far as we can go,” Pritzker told The Wall Street Journal Thursday, after urging the European Commission to accept a “comprehensive deal” she proposed.

But the EU Commission fired back that further concessions were needed.

“There have been some movements on the U.S. side, which is welcome, but we need further clarification on transparency and effective oversight,” a spokesman told the publication.

“What we need to do is meet our deadlines now so commerce doesn’t stop,” Pritzker responded.

–Cory Bennett contributed.