Asia Pacific Economic Cooperation Group (APEC)

Report: The US Department of Commerce and International Privacy Activities: Indifference and Neglect

This report evaluates the US Department of Commerce’s international privacy programs, their efficacy, and their value to business and to consumers. The role of the Commerce Department has become more important in light of the Obama Administration's establishment of a Subcommittee on Privacy and Internet Policy in October 2010. The Subcommittee is chaired jointly by the Department of Commerce and the Department of Justice, and it is intended to promote “individual privacy,” among other things. [1] This report reviews, analyzes, and summarizes major international privacy activities of the Department of Commerce, with a focus on the Safe Harbor Framework established in 2000 with the European Union in response to the requirements of the EU Data Protection Directive. The report also considers briefly the Department’s work on the Asia Pacific Economic Cooperation (APEC) Privacy Framework.

Commerce and International Privacy Activities: Introduction and Summary of Findings

The rise of privacy as an issue of international attention has taken place during the past forty years. Various agencies of the US Government have played roles on international privacy matters, including the State Department, Federal Trade Commission, Department of Homeland Security, Office of Management and Budget, the Department of Commerce, and scattered other agencies. The privacy activities of these agencies have waxed and waned over the decades. Of the US agencies, the US Federal Trade Commission has played by far the most significant role in consumer privacy issues, for example, identity theft, financial privacy, and a host of issues related to privacy and fair business practices. Historically, the Department of Justice, primarily a law enforcement agency, has never played a significant role in consumer privacy. Indeed, in its law enforcement capacity, the Justice Department is often directly antagonistic to the protection of consumer privacy.

Commerce and International Privacy Activities: Findings

The Department of Commerce’s actions on international privacy matters have often been characterized by highly visible but ineffectively administered programs that lack rigor. As this report discusses, three separate studies show that many and perhaps most Safe Harbor participants are not in compliance with their obligations under the Safe Harbor Framework. The Department of Commerce has thus far carried out its functions regarding the Safe Harbor program without ensuring that organizations claiming to comply with the Safe Harbor requirements are actually doing so.

Commerce and International Privacy Activities: Early Years of Privacy at Commerce

The privacy responsibilities of the National Telecommunications and Information Administration of the Department of Commerce originated with the establishment of a privacy coordinating committee by President Jimmy Carter in 1977 as part of a presidential privacy initiative. [4] The staff that carried out the work was transferred to NTIA at the time of its establishment in 1978. [5]

Commerce and International Privacy Activities: The US-EU Safe Harbor Agreement

With the adoption of the European Union’s Data Protection Directive [21] in 1995 and its implementation in 1998, much of the concern about transborder data flows of personal information centered on the export restriction policies of the Directive. Article 25 generally provides that exports of personal data from EU Member States to third countries are only allowed if the third country ensures an adequate level of protection. While some countries have been found to provide an adequate level of protection according to EU standards, the United States has never been evaluated for adequacy or determined to be adequate.

Commerce and International Privacy Activities: Recent Safe Harbor Developments

The shortcomings of the Safe Harbor Framework have come to the attention of some data protection authorities in Europe. In April 2010, the Düsseldorfer Kreis, a working group comprised of the 16 German federal state data protection authorities with authority over the private sector, adopted a resolution applicable to those who export data from Germany to US organizations that self-certified compliance with the Safe Harbor Framework. The resolution tells German data exporters that they must verify whether a self-certified data importer in the US complies with the Safe Harbor requirements.

Commerce and International Privacy Activities: APEC

The Asia Pacific Economic Cooperation (APEC) is a grouping of 21 member economies in the Asia Pacific Region, including Russia, China, and the United States. APEC was established in 1989 to facilitate economic growth, cooperation, trade, and investment in the region. The Asia-Pacific Economic Cooperation (APEC) is a forum for 21 member economies in the Asia Pacific region. APEC includes Russia, China, and the United States as members. APEC adopted a Privacy Framework in 2004. The APEC Privacy Framework is largely viewed as an attempt to create a different international privacy regime as an alternative to the European Union’s Data Protection Directive. Whether APEC will succeed in influencing international privacy developments in a meaningful way remains to be seen.

Commerce and International Privacy Activities: Conclusion

The World Privacy Forum prepared this report in part because the role of the Department of Commerce in privacy may change in the near future. The Department of Commerce is co-chair with the Department of Justice on the Subcommittee on Privacy and Internet Policy established by the Obama Administration toward the end of 2010. It is not comforting to consumer privacy advocates that Department of Justice is a law enforcement agency that is often antagonistic to consumer privacy interests, that the Commerce Department has mostly represented business interests in international privacy matters, and that the Commerce Department does not have an admirable record in the areas of privacy that it currently oversees. This leaves the leadership of the Subcommittee on Privacy and Internet Policy without a strong voice for consumer privacy interests.

Public Comments: May 2006 - US Civil Society Organizations (CSO)

EPIC filed comments with the Department of Commerce, which the World Privacy Forum joined. The Office of Technology and Electronic Commerce solicited comments on the development and implementation on “cross-border privacy rules” in the Asia PacificEconomic Cooperation Group (APEC). Seven groups submitted the comments on behalf of civil society organizations (CSO) in the United States concerned about privacy in order to urge the strengthening of privacy rules in the Asia Pacific Economic Cooperation Group.