Page 318 - DMGT308_CUSTOMER_RELATIONSHIP_MANAGEMENT

Unit 12: Customer Privacy

In 1992, the European Commission adopted a directive establishing basic telecommunications Notes
privacy rights for its member states. The draft included restrictions on unsolicited calls, calling
number identification, and use and storage of data collected by telephone carriers for electronic
profiles. It mandates that holders of data pay for security measures in order to bar unauthorized
access. It also prohibits the creation of electronic profiles of individuals utilizing data concerning
their purchases or other actions, and it bars transfers of data to non-EC member countries unless
those countries have adequate data protection rules.
Among Third World countries, Brazil has been particularly active in data and telematics issues.
Instituted during the years of military dictatorship, the thrust of Brazil’s policy was evident in
the statement of its top information officer, who combined both the civilian and military
functions of that term.

The administration [i.e., the restriction] of TDF [transborder data flows] appears to be an effective
government instrument for the creation of an environment that makes the emergence of an
internationally viable national data-service industry possible. By itself, such an industry would
have had great difficulties in overcoming the obstacles of a completely “laissez-faire”
environment. The country’s TDF policy altered that situation.
A license had to be obtained before establishing international data links. Applications for foreign
processing, software import, and database access were rejected if domestic capability existed.
The policy was strongly embraced by the Brazilian military dictatorship and its business and
industry allies, and it was admired around the world as an assertion of national sovereignty by
many observers who would otherwise feel no kindness toward right-wing juntas.
In the United States a generally more pragmatic approach to legislation, and a case oriented
decision process administered through the judiciary and the regulatory agencies, have led to the
tackling of specific data abuses when they became apparent rather than to comprehensive laws.
This has led to a less systematic approach that in Europe, and to a variety of ad hoc federal and

state legislation. Typically, they addressed a narrow and specific issue of concern. Most such
statutes were either aimed at particular industries (for example, credit rating bureaus), or at the
conduct of governmental agencies, or they dealt with flagrant abuse such as computer break-ins.
Thus, contrary to often-held views in other countries, numerous laws protecting data and privacy
exist in the United States, and some of them are quite far-reaching, especially in terms of access
to state files, and limits on such files.

Nevertheless, U.S. privacy legislation remains considerably less strict than European law in the
regulation of private databases, and coverage of U.S. governmental organizations by privacy
law is not comprehensive. Although the Privacy Act of 1974 restricts collection and disclosure
by the federal government, and vests some responsibility in the Office of Management and
Budget, only a few states and local governments have passed similar fair information practices
laws for their agencies. The U.S. has no government agency specifically charged with data
protection similar to the centralized data protection commissions or authorities established in
European countries, though proposals have been advanced in Congress.
A synthesis of the comprehensive European and the ad-hoc American approaches is to formulate
a set of broad rules or principles applicable to a sector of the economy, or to a set of issues. This
was the direction taken by the New York Public Service Commission on the issue of
telecommunications privacy.
The New York Public Service Commission’s approach in 1991 went well beyond the problem-
specific approach. It issued, after a proceeding initiated by the author, a set of broad privacy
principles applicable to the whole range of telecommunications services under its jurisdiction.
A similar approach, that of privacy principles, was recently taken by the Federal Government’s
high visibility Information Infrastructure Task Force, in the report by its Privacy Working

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