Henry Farrell's Response to President Obama's Take on European Privacy Rules and Competition

Andrew Young — February 16, 2015

For the Monkey Cage blog at the Washington Post, Network member Henry Farrell responds to President Obama’s suggestion that Europeans are using privacy rules to protect their firms against U.S. competition. Is he right?

“Not really. European businesses are no less willing to use politics to disadvantage their competitors than businesses in other parts of the world. But the new rules have less to do with discrimination against U.S. firms than European discomfort at the e-commerce model that has taken root in the United States. Businesses like Google and Facebook offer their services for free and make money by observing what you do in enormous detail, and then using that information to sell carefully targeted ads. This is inevitably a privacy intrusive service. Furthermore, these firms face the persistent temptation to push the boundaries ever further, weakening their customers’ privacy to make more money. It’s inevitable that there are going to be big clashes between businesses operating under this model and regulators who worry about privacy. The European Union also has to deal with a European Court of Justice which has started getting actively involved in privacy questions (and is going to rule on a case taken by a European citizen that could stop Facebook and other U.S. firms from taking advantage of the ‘Safe Harbor Arrangement,’ a special mechanism that allows them to avoid the full extent of E.U. privacy law).”

Read the full post here.