CAPITAL ROUNDUP

by Kerry GildeaThe European Commission July 27 agreed to the "safe harbor" provision pushed by the U.S. Commerce Department to protect personal data transferred between European Union countries and the United States.The agreement "provides a framework within which personal data transferred to the U.S. will be better protected, while at the same time making transfers simpler for both EU and U.S. businesses," Frits Bolkestein, a market commissioner for the EU, said in a statement. The safe harbor provision should be in full effect by the end of the year.In a separate move, the Commerce Department applauded network advertising companies for signing onto a new set of self-regulatory principles for online marketing. The principles are designed to provide consumers notice and choice regarding the use of their personal information, as well as an effective oversight and enforcement mechanism, according to department officials."Once fully implemented, these principles will constitute an effective and meaningful self-regulatory approach to privacy protection," Commerce Secretary Norman Mineta said in a statement. "They will provide appropriate protection for the privacy of individual information."XXXSPLITXXX-The American Civil Liberties Union told House lawmakers recently that the FBI's new Carnivore wiretapping system threatens the privacy of all Americans."Never before has the FBI insisted that it has the authority to capture all of the communications passing through a network," ACLU Associate Director Barry Steinhardt said at a July 24 hearing of the House Judiciary subcommittee on the Constitution. "Never before has a law enforcement agency asked for this kind of power based on an unsupervised promise that it will not stray beyond the confines of its authority."The FBI, however, claims it will use Carnivore to find criminals, not invade citizens' privacy. Under the Carnivore system, its specialized software would be attached to an Internet service provider's network to search messages of a person suspected of a crime."Congress must send a clear message to the FBI," Steinhardt said. "Under no circumstances must it be allowed to engage in such a mass invasion of the privacy of law-abiding Americans."XXXSPLITXXX-A bipartisan group of senators, led by Senate Commerce Committee Chairman John McCain, R-Ariz., introduced July 26 a new online privacy bill that requires all Web sites to post notices explaining their privacy policies or face stiff penalty fees.A Web site could be penalized up to $500,000 for not complying with the legislation, which has engendered support from Democrats and Republicans. The bill also contains provisions restricting how much personal data a Web site operator can disclose to a third party, and it calls for more study of online security issues.Because of a growing call for online legislation in the Congress, senators believe they can gather support for pushing the bill through when lawmakers return from the month-long August recess.