Consumer data protection with emerging economies

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Background

Worldwide, consumers are required to disclose personal data for transacting businesses online or joining social networks. Companies may utilise these data to earn high profits. However, the disclosure, usage and possible abuse of these data involve significant risks for consumers. The purpose of some free-charge-internet services oftentimes is to gain access to user data, which then afterwards are used for behavioural advertisement purposes by the respective service providers. A number of companies have specialised in trading user data for marketing purposes. Spam-mails are one possible detriment for consumers arising from these practices. Even more threatening is the fraudulent use of access data for online payment systems, potentially causing massive financial damage to consumers. Additionally, the use of popular social networking platforms entails a number of risks which especially young consumers often are unaware of. Standard settings on data usage in major networks grant a precariously low level of protection and are not easily customised.

Rationale

Against the background of globalisation and the increasing importance of a number of emerging economies, the German Government is looking for closer cooperation with upcoming major powers. Regarding personal data protection, partnering with emerging economies like Brazil and China is considered to be of particular strategic importance.

In this respect, the German government is looking to uphold the following basic principles:

  • processing of particularly sensitive data (e.g. ethnicity and religion) only under strict regulations
  • transparency of data collection and usage for the consumer, particularly in form of the right to information
  • opt-in’-based consumer consent to data usage with consent achieved on an informed basis and without any sort of external pressure
  • default settings with high levels of data protection
  • Processing of data for predefined purposes only
  • accessible law

Until recently, consumer data protection has been of relatively little importance in emerging economies. However, recent developments suggest an increasing political as well as societal awareness for the importance of this issue. To shape the economic relations between Europe and these important partners sustainably and in the interest of consumers, a coordinated consumer data protection strategy is of high importance. A coordinated data protection strategy will also help to gain influence on the market behaviour of dominating internet companies like Google or Facebook. In addition, this cooperation offers considerable advantages for coordinating national as well as international policy strategies with actors like the Organization for Economic Co-operation and Development (OECD) or the International Consumer Protection and Enforcement Network (ICPEN).

As of today, a number of international efforts to harmonise data protection can be identified. Within the European Economic Area consumer data protection is already largely harmonised. The amended Data Protection Directive of the European Union (EU) will most likely bring an increase in harmonization and protection levels inside the EU. Another initiative on the international level is the annual International Conference of Data Protection and Privacy Commissioners. This project aims at actively engaging emerging economies to play a stronger role in the global governance of consumer data protection.

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