EU proposes greater privacy protection to boost digital economy

The EU proposed Tuesday broadening privacy protections in electronic communications, including tracking by advertisers, in a bid to promote a digital single market worth tens of billions of euros.

The European Commission, the EU executive, announced a raft of proposals including a move to have new providers like WhatsApp, Facebook Messenger and Skype covered by the legislation that it wants enacted by May next year.

Under the existing EU rules, privacy protection is only applied to text messages and voice calls provided by traditional telecoms operators.

"Our proposals will deliver the trust in the Digital Single Market that people expect," said Andrus Ansip, the commission's vice-president for the Digital Single Market.

The proposals also aim to sharply reduce "cookie" consent requests for internet users, an idea that has drawn sharp rebuke from the advertising and media industry.

This new rule would compel websites and browsers to switch from the existing default of allowing users to opt out of cookies that benefit online advertising to asking them to sign on to do so.

"European companies will suffer competitive disadvantage by comparison to other markets and ultimately damage the potential of Europe's data-driven economy," said a wide array of European advertising and publishing associations in a letter to the commission on December 22.

The commission is seeking to create a digital single market for data for the world's biggest free-trade bloc of around 500 million people.

It said the EU data market was worth 54.5 billion euros ($57.6 billion) in 2015 and could hit 84 billion euros by 2020 while employing 7.4 million people.

The commission believes that under the proposed legislation, users and businesses across the EU will enjoy an equal level of protection for their electronic communications.

The proposals involve privacy for both content and metadata derived from all electronic communications.

Such data will be made anonymous or deleted without user consent, unless it is required for billing.
They also strengthen bans on unsolicited electronic communication like emails, SMS and by phone without user consent.

The commission proposals set out to update current rules and broaden privacy standards when sharing data with companies across borders. 

Under an EU-US Privacy Shield adopted last year, companies face penalties if they do not meet EU standards of protection. The EU and US last year also struck an "umbrella agreement" in December to protect data during law enforcement cooperation.