EU/US settle data protection differences

The long-running battle between the European Union and the US on data protection appears to have ended, removing a barrier to transatlantic ecommerce.

Based on the so-called safe-harbour principle, European laws on privacy will be extended so that US companies can do business in Europe. The companies must agree to abide by European privacy laws when dealing with European customers.

The formal agreement on rules to protect consumer privacy in ecommerce breaks a two-year deadlock on how personal data can be protected when it is sent from the EU to the US.

The US self-regulatory approach on privacy issues is not as robust as EU laws which prevent companies from sharing data without consumer permission - but the agreement is yet to be approved by national governments.

US companies can sign up to the safe-harbour principles on a voluntary basis with sanctions applicable if they fail to comply.