EU, US privacy agreement a cause for alarm

At the end of last week we were told that the United States and the European Union had reached agreement in the hotly disputed area of data privacy. Cue sound of mirthless laughter.

This festering issue has been around since 1998 when the EU passed the current Data Protection Directive (which, incidentally, the Republic has not approved, and on which the EU is now threatening legal action).

The directive guarantees protective rights to computerised and print information on "data subjects" (i.e. you and me) which far surpass feeble "protections" in the US.

This has caused major ructions between the US and EU, since the EU wants US companies to handle European citizens' data in accordance with the directive. On the other hand, the US wants to avoid the administrative costs compliance could entail and fears the directive could effectively close off the European market to it.

And, US businesses love direct marketing. They are increasingly enamoured of the computer and Internet's power to harvest lots and lots of information; they would like to gain access to such information about you.

To try to resolve the issue, the US last year devised something called "safe-harbour" principles. These were basically a suggestion that the EU trusts American businesses to handle information the way the EU directive demands - without actually regulating anything. US businesses hate regulation.

The EU scoffed.

Or so it seemed. Now it has announced that it accepts safe harbour, more or less. At least, it will accept the principles and allow the exchange of data that takes place between companies that straddle the EU and US - say, insurance companies that process information in the US and send it back to a European parent company or division. They've decided to put off any consideration of whether the principles will be acceptable for financial institutions and - more worryingly - cyberspace.

But cyberspace is where the greatest abuses can be perpetrated, simply because of the range of ways in which precise information can be gleaned about you, without your knowledge. Such information can then be distributed in ways you never foresaw.

That might mean you get turned down for a mortgage, a job or a healthcare policy. Less sinisterly, but perhaps more annoyingly, uncontrolled access and usage of such information threatens to turn the Internet into a direct marketing nightmare.

US companies have consistently, and sometimes dramatically, demonstrated that they are poor guardians of private information. They insist they will self-regulate and then do little except make cosmetic gestures on their websites (and few enough even do that).

The Federal Trade Commission in the US is investigating several cases of misuse of information and is threatening to introduce regulation. US companies online still don't effectively self-regulate. This is despite a finding in one survey that three-quarters of Americans said they would buy rather than browse online if they knew their privacy was guaranteed.

Details about the agreement, which will be voted on by the EU on March 31st, are slim, and news coverage last week was often almost contradictory. Who knows what it has agreed - suffice to say that it is extremely worrying that the EU has accepted any promise by American companies to look after "the privacy thing" themselves.

It's also worrying that Net-related matters in this area are, for now, shelved and unresolved. This is a crucial issue all Europeans will want to watch very, very closely.

ALTHOUGH its Internet booking site has only been around for two months, Ryanair is now the Goliath of the online travel market in Europe, according to the Observer. The company claims to have reached its first-year goal of selling 25 per cent of all its tickets over the Web. That translates into 50,000 tickets a month and £7.3 million sterling in sales revenue last month up on an already-impressive £4 million in January, the site's first month of operation.

To give some perspective, the Observer compares Ryanair's take to that of the much-hyped British travel company, Lastminute.com, which had a bumpy initial public offering last week, despite having featured in endless gushing profiles in the British media. Lastminute.com's annual turnover is less than £2 million sterling and the firm is believed to be selling about 1,000 tickets, packaged holidays, hotel bookings and other travel items at its website per week.

The article also notes that BA and Lufthansa sell less than 2 per cent of all tickets on the Net. That's an embarrassing showing for the high-profile national airlines in Britain and Germany, the two European nations that lead in Internet penetration.

Aer Lingus, of course, doesn't even sell tickets online yet, despite the importance to it of the American market. Americans have quickly embraced buying airline tickets online - it was another of the first successful business-to-consumer uses of the Internet. A large number routinely use the Net to check schedules, track their frequent flyer miles, and comparison shop for tickets (often getting a discount from the airline for buying online).

Ryanair is the ideal company to have jumped on the Net, because most of its customers have price as a priority, and then want to check flight availability against price. The site makes such considerations the key elements of a ticket search - you can hunt for the cheapest tickets to a given destination over a range of dates.

If you're flying to London, where Ryanair serves several airports, you can hunt through all of them to mix and match arrival and departure times and price, and then buy one-way tickets in and out of different airports, if you wish. Sometimes this gives a cheaper overall fare.

This is the kind of dithery information people don't like having to ask an airline or travel agent, but are happy to research themselves if it's quick and easy. Ryanair gets everything right: a simple site that delivers information (and lots of it) fast; and lets you order fast. That's exactly why other airlines - and travel companies - ignore the Net at their peril.

klillington@irish-times.ie