Obstacles to Transatlantic Harmonization of Data Privacy Law in Context

Abstract

Globalization seems to call for the harmonization of laws, especially in sectors affecting global business, and this is all the truer with respect to laws affecting the technology industry, with the facility of its cross-border communications networks. Data privacy law on both sides of the Atlantic benefits from common origins but eventually divergence occurred, causing compliance challenges for companies and the potential halting of cross-border data flows from the European Union to the United States. Harmonization could possibly obviate such difficulties, and there is a window of opportunity to achieve this with discussion in the United States of a potential federal data privacy law.

After setting out the historical context, this study posits and details three major obstacles to full-scale transatlantic harmonization of data privacy law, from the perspective of what has become the predominant data privacy model—that of the European Union. These are: laissez-faire policy and neoliberalism in the United States (and resulting focus on self-regulation there), the lobbying power of the U.S. technology industry giants in a conducive U.S. legislative system and differing constitutional provisions on both sides of the Atlantic. Each of these elements makes attaining true harmonization more difficult, if not impossible. Nonetheless, corporate action in the United States might have given some hope of a de facto harmonization of practices, although hopes have not led to the equivalent of harmonization of laws. Political and other realities provide further context, leaving reason to be doubtful about the prospects of true transatlantic harmonization of data privacy law. Finally, certain areas for improvement in the context of U.S. legislative action are discussed.

Keywords: harmonization of laws, data privacy, GDPR, data protection, fundamental rights, freedom of speech, first amendment, neoliberalism, laissez-faire policy, lobbying, FTC

JEL Classification: K2, K19, K23, K33