Google risks huge fine under new EU data rules: top official

BRUSSELS Tue Feb 19, 2013 12:05pm EST

The Google signage is seen at the company's headquarters in New York January 8, 2013. REUTERS/Andrew Kelly

The Google signage is seen at the company's headquarters in New York January 8, 2013.

Credit: Reuters/Andrew Kelly

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BRUSSELS (Reuters) - Google's latest privacy policy could land it with a fine of upto $1 billion under a new law allowing Europe-wide challenges to U.S.-based Internet giants, Europe's top justice official said on Tuesday.

Viviane Reding, the European Union's commissioner for justice, said rules being finalized by the European parliament and EU countries would allow a single EU data regulator to fine companies on behalf of all national watchdogs.

"The one-stop-shop regulator could threaten a company which does not obey the rules with a fine of up to two percent of global turnover," Reding told journalists.

Asked what kind of offence would receive the full two percent fine Reding pointed to Google. "The test case (Google) is a clear one."

The overhaul of the existing EU data protection regime could come into effect next year and would allow for bigger single fines.

It would also require all countries to have fines. Some states do not now levy penalties.

Google's total revenue in 2012 amounted to $50 billion which would make a two percent fine $1 billion.

Under current European rules, only individual countries can levy fines against companies that violate data privacy laws. Fines range from 300,000 euros to 600,000 euros.

Reding said that the ongoing dispute between EU data protection regulators and search engine Google showed the weaknesses of the current system, which relies on each country identifying and punishing privacy breaches.

She added that Google's decision to ignore a warning by regulators in October to change its privacy policy was a clear-cut case for a fine.

Google said it had not ignored warnings and had since amended its privacy policy.

European data watchdogs have said they plan to take "repressive" action against Google by this summer for its privacy policy, which took effect last March and allows the search engine to pool user data from across all its services ranging from YouTube to Gmail.

While regulators say Google's policy infringes users' privacy, the company said it is not breaking any laws.

The new law now would place greater responsibility on companies such as Facebook to protect users' information and threaten those who breach the code with fines.

U.S. companies have been lobbying heavily against the regulation which forces them to seek water-tight permission from users for collecting their data and also gives users more rights to obtain and delete their own data from services like Facebook.

The European Parliament is currently reviewing the rules drafted by the European Commission. They will then need the consent of EU member nations before becoming law, a process that could take up to a year.

(Editing by David Cowell)

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Comments (4)
thorpy63 wrote:
The EU wants to wield its big stick over a US business it has no business in being aggressive towards. If it wants to build an EU search Engine platform that pays taxes in the EU as a competitor then good for the EU but this aggression is all about extracting money. Google should relocate their business lock stock & barrel to the US. It is a virtual business that doesn’t need a physical base to operate from. It can supply its physical goods via the internet just like Amazon or through its partners in the mobile phone world. The EU needs to stop telling businesses that supply a free product that its customers want how to run their business model a free trade agreement will lead to US corporations being dictated to by the EU & should be strongly resisted.

Feb 19, 2013 12:46pm EST  --  Report as abuse
Loothor wrote:
I completely disagree with you, thorpy. The US has done a terrible job of protecting citizens’ right to privacy against corporate commercialism, and I am glad that at least the EU is somewhat more immune to corporate lobbying and political kickbacks.

This has NOTHING to do with where Google’s services are located, by the way. If Google sells advertising in Europe, then Google is subject to EU law. If they don’t like it, they can stop making money in the EU.

Google does NOT supply a “free product,” the fact that you think it does shows how incredibly naive you are. Google’s product is primarily paid for by advertisers rather than consumers, but that is nowhere near the same thing as “free.”

Regardless, free or not, Google (or any other corporation) should not have the right to go around giving information you provided for one service to anybody else that they can profit from it with.

Feb 19, 2013 1:34pm EST  --  Report as abuse
stambo2001 wrote:
@thorpy63 Er, it’s not really a ‘free product’ as you imagine. They profit from selling your personal data and you get no return. In a lot of ways it is similar to someone using your photograph for marketing…which is what Facebook wants to do with your photos btw.

Feb 19, 2013 1:40pm EST  --  Report as abuse
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