*European Parliament Votes Against Safe Harbor Agreement
The 626-member legislative body voted against the safe harbor deal because they believed it was too flimsy, given the relative lack of privacy protections in the United States, according to reports.
The safe harbor arrangement was the result of more than two years of discussions between the European Commission and the U.S. Department of Commerce. It was developed in response to a European Commission directive on privacy, a sweeping rule that went into effect in October 1998. The rule prohibited the transfer of personal data to non-EU countries that do not meet privacy protection standards.
Under the terms of the agreement, U.S. companies that want to continue transferring personal data from Europe must commit to respecting detailed standards of notice, user choice and data access and security.
The agreement was expected to be approved by the European Parliament. If it was, U.S. companies would have been able to sign on to the safe harbor deal this fall.
A European Commission spokesman said the "European Commission is going to assess the situation soon enough." But insiders said the decision could derail the deal, or could force U.S. and European negotiators back to the drawing board.