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Change in attitudes towards data protection in Germany behind move to include privacy issues in EU-US trade talks, says expert

German businesses have changed their attitudes towards data protection since revelations emerged about US surveillance activities, an expert has said.05 Nov 2013

Munich-based data protection law specialist Christian Knorst of Pinsent Masons, the law firm behind Out-Law.com, said that the change in attitudes is a factor behind the German Government's push for new privacy standards to be agreed as part of ongoing EU-US trade talks.

The European Commission and officials in the US are currently trying to agree new trade rules which the Commission said are aimed at "removing trade barriers in a wide range of economic sectors to make it easier to buy and sell goods and services between the EU and the US". Talks between the EU and US representatives on the contents of the new Transatlantic Trade and Investment Partnership (TTIP) began in July.

Separately, there is a move within the EU to update existing data protection rules. Under current proposals, businesses based outside of the EU, including those in the US, would be subject to the new requirements if they were targeting services at EU citizens. Major technology companies and US diplomats have been involved in intense lobbying in a bid to convince law makers in the EU to relax some of the more stringent requirements of the draft proposals.

However, the move towards new EU data protection laws has also been influenced by the actions of a whistleblower from the US' National Security Agency (NSA). Edward Snowden leaked documents about the NSA's intelligence gathering activities to newspapers earlier this summer that detail alleged access the NSA has to data held by some major US technology companies, some of which act as major players in the European cloud computing market.

The revelations prompted the European Commission to launch a review of an existing data sharing arrangement that facilitates the transfer of personal data between the EU and US in accordance with EU data protection standards.

In a speech in Washington last month, EU Justice Commissioner Viviane Reding said that data protection was not open for negotiation as part of the TTIP talks. She warned that disagreements over the legal standards that should apply to the protection of personal data could "derail" the entire trade deal.

However, the Financial Times reported earlier this week that German Chancellor Angela Merkel is keen to negotiate privacy safeguards capable of protecting EU companies' confidential information within the context of the TTIP deal.

The news prompted Reding to reiterate her call to keep data protection out of the TTIP talks.

"Including data protection in the trade talks is like opening Pandora’s box," Reding said, according to a subsequent Financial Times report. "The EU is not ready to lower its own standards  . . that is why the free trade agreement negotiations are not going to include privacy standards."

Knorst said that the Snowden revelations had prompted a change of attitudes towards data protection in Germany which he said could be linked to Merkel's bid to agree on privacy safeguards through the TTIP deal. Merkel's mobile phone was also allegedly tapped by the NSA, according to reports.

Germany's biggest telecoms company, Deutsche Telekom, outlined plans to create a new a national internet service in the country that would allow data and communications to flow within German-controlled infrastructure, Knorst said.

German Interior Minister Hans-Peter Friedrich also told a newspaper in the country that he will push for new laws that would hinder "the interception of data exchanged [within Germany and Europe] by foreign intelligence [agenices]", according to a report by German broadcaster DW.

Knorst also pointed to comments made by a German data protection authority in July following the initial newspaper reports on the Snowden leaks. The comments by the regulator in the German state of Schleswig-Holstein "include an explicit recommendation that individuals should consider European, rather than US, internet services", Knorst said.

The Federal Association of the Digital Economy in Germany also recently criticised proposed reforms to the EU data protection law framework which have received the backing of a committee of MEPs. Its president, Matthias Ehrlich, said it would be wrong for businesses to be held liable for breaches of the rules stemming from the surveillance of data undertaken by foreign intelligence agencies. He said the plans reflect "political helplessness" on the issue and called for the EU to ensure there are no "loopholes" under the reformed regime.

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