Subcommittee on Commerce, Manufacturing, and Trade Examines Negative Impacts of EU Privacy Regulations on Businesses, Consumers

Press Release

The House Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade, chaired by Rep. Mary Bono Mack (R-CA), today held a hearing to discuss the European Union's privacy and data collection regulations and the impact they have had on the global Internet economy.

This was the second in a series of privacy hearings the subcommittee will conduct this fall. Members and witnesses focused their discussion today on the EU's Data Privacy Directive, which serves as a baseline privacy standard but directs EU member states to enact their own national privacy laws. The Directive has created a complex system of regulatory regimes which have proven difficult to navigate and presented a number of challenges for U.S. companies. Research has shown the Directive harms commerce, stifles innovation, and ultimately hurts consumers.

MIT professor Dr. Catherine Tucker testified regarding her research on the negative effects of Europe's privacy laws on advertisers. NetChoice analyzed Tucker's research and found that if the U.S. were to adopt an EU-style opt-in regime for Internet advertising, it would cost U.S businesses $33 billion over the next five years. Tucker stressed the need to strike a delicate balance with regulation, stating, "There are risks to consumers if companies have unfettered access to consumers' data, but there is also a risk that strict regulations could damage the ability of internet firms to support free services through advertising."

The EU Directive illustrates how harmful government regulations can be to businesses and consumers alike. They should be lessons lawmakers will continue to be mindful of as they continue to examine online privacy issues.

"My goal is to point to a better way to protect privacy online and promote e-commerce. In the end, this will benefit both American consumers and American businesses, and preserve a strongly-held belief all across America that the Internet should remain free," said Bono Mack.

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