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[FYI] ASPs warn: EU Data Protection Laws fail to keep pace with technology


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Calls for EC to review urgently the outmoded data laws to protect 
individuals' rights and encourage business compliance  

Rome, 6 March 2001 - The Application Service Provider (ASP) industry 
is leading a call for the European Commission to review urgently the 
data protection laws across Europe following a major new Europe-wide 
research study published today. The report from the ASP Industry 
Consortium (ASP IC) warns that laws driven by the EC's 1995 data 
directive are implemented inconsistently across countries, leaving 
businesses at risk from prosecution due to uncertainty over 
compliance procedures, as well as an erosion in individuals' 

"The Internet and web-based technology have fundamentally changed the 
way in which people work and how data is processed and transmitted," 
said Jeff Maynard, European Chairman, ASP Industry Consortium. 
"Online businesses such as ASPs want to be able to conduct operations 
effectively while protecting the rights of individuals. However, 
current data protection laws, which were written during an era when 
data was relatively static, need to be changed to catch up with the 
realities of an online, mobile world."  

ASPIC is calling on the EC to consider a variety of changes, 
including: - Uniform personal data protection laws throughout the EU, 
with an exclusion of corporate data - Establishment of a central 
European data protection authority to act in partnership with 
countries to implement a common registration and notification process 
and to monitor and adapt rules as technology changes - Redefinition 
of the roles performed by service providers such as data processor 
and data controller to reflect technological realities - Application 
of the EU risk assessment approach to determine the adequacy of the 
data protection laws in non-EEA countries  

"We were surprised by the results of our research," said Richard 
Wightman, the ASP IC's Research Committee European representative 
overseeing this study. "While we knew that technology could be used 
to subvert the intent of data protection laws, we did not expect to 
find such wide latitude in the interpretation of the 1995 directive, 
including the extension of the law to corporate data. Having 
undertaken this major research programme, we are now in a position to 
work with the EC on changes that will springboard the multi-billion 
dollar ASP market both in Europe and across the world."  

London-based law firm D.J. Freeman conducted the research on behalf 
of ASP IC in 15 European countries and found that almost every region 
was operating its own regime in terms of data laws.  

Alexander Carter-Silk, of DJ Freeman, commented: "While EC data 
legislation is not perfect, it does provide a solid foundation for a 
standardised compliancy framework for the future. In terms of ASPs, 
the situation in Europe is one where the economy has accelerated past 
the law and an update is required - not only for the growth of the 
business model in Europe, but also because the rest of the world is 
looking to the EU to set the example in achieving cross-border data 
compliance standards."  

ASPIC, an international advocacy group with more than 700 member 
companies, including 200 active company members in Europe, 
commissioned the research project to address international data 
protection laws and the impact they will have on the marketplace. It 
concludes that there is an urgent need for ASPs to operate a highest 
standard data protection compliance programme in order to comply with 
relevant legislation in countries where they operate. The report was 
one of more than a dozen custom research projects that have been 
commissioned in the last year by the ASP IC Research Committee, which 
is chaired by Sheila Lugenbuehl of Hewlett-Packard.  

In addition to his role as European Chairman of ASPIC, Jeff Maynard 
is Founder, Deputy Chairman and Chief Technologist of Netstore plc. 
Richard Wightman is Strategic Marketing Manager for the Unisys ASP 
Programme in Europe.  

Maynard concluded: "International outsourcing creates challenges not 
found in typical domestic outsourcing. They include cultural, 
political, financial, technological, managerial and legal 
considerations. Our research will help ASPs navigate this potential 
legal minefield and give them a clear understanding of the issues 
facing them - from diverse areas such as prohibited data content to 
various tax considerations - when conducting business on a global 

About the ASP Industry Consortium Founded in May of 1999, the 
Application Service Provider Industry Consortium is an international 
advocacy group of more than 700 companies formed to promote the 
application service provider industry by sponsoring research, 
promoting best practices, and articulating the measurable benefits of 
the ASP delivery model. Its goals include educating the marketplace, 
developing common definitions for the industry, as well as serving as 
a forum for discussion and sponsoring research. Among the technology 
sectors represented among the ASP Industry Consortium membership are 
Independent Software Vendors (ISVs), Network Service Providers 
(NSPs), Application Service Providers (ASPs), as well as emerging 
business models and other sectors supporting the industry.  

Information on the ASP Industry Consortium - including a full list of 
member companies - is available at www.allaboutasp.org or by 
contacting the Consortium's headquarters at: ASP Industry Consortium, 
Inc., 401 Edgewater Place, Suite 500, Wakefield, Mass. 01880; Tel: 
781-246-9321; Fax: 781-224-1239; e-mail info@aspindustry.org.  

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