New EU corporate spying measures agreed

Trade secrets deal includes protections for journalists and whistle-blowers.

The EU institutions agreed Tuesday on new measures aimed at fighting industrial espionage and protecting confidential corporate information, but only after tough negotiations over whether to protect journalists and whistle-blowers who reveal trade secrets.

Business groups had long pushed for the so-called “trade secrets directive” in an effort set stricter rules protecting companies’ proprietary information. But the measure had been criticized by some members of the European Parliament as well as trade unions and journalist groups, who claimed that the initial proposal made by the European Commission had too broadly defined “trade secrets” in a way that exposed reporters and whistle-blowers to unfair prosecution.

The text of the directive agreed this week includes protections for journalists and whistle-blowers aimed at addressing that criticism, which were hammered out in the Parliament’s legal affairs committee.

“It is a step forward…to improve across the EU common rules to protect whistle-blowers which are today very fragmented,” said Constance Le Grip, a French center-right MEP in charge of the issue for the Parliament.

Negotiations between the Parliament and the EU Council of Ministers had been difficult, sources said, and some expected that an agreement would not be reached between MEPs and countries before early 2016. One of the main points of contention was to find common wording acknowledging that some secret corporate information was of public importance and therefore legitimate fodder for journalists and whistle-blowers.

The most striking example given by proponents of protections for journalists was the coordinated coverage by worldwide media outlets of revelations over corporate tax shelters, better known as the Luxleaks case, in November 2014.

A former employee of audit firm PricewaterhouseCoopers is currently being prosecuted for revealing business secrets after he passed along documents showing deals several major companies made with Luxembourg to pay their taxes in the country even if their main activities and revenues are based elsewhere in Europe or in the U.S.

MEPs ended up agreeing that the text would include exemptions on the protection “of public general interest,” and safeguards for whistle-blowers not to be prosecuted by national authorities for disclosing business information.

Many EU countries,  including the United Kingdom, Germany, Poland and Finland, fought against making too many exemptions, arguing that legal references to whistle-blowers should be kept to a bare minimum.

“Clearly at first those countries were in favor or protecting first and foremost business’ interests,” said one Parliamentary aide involved in the negotiations.

A official in the European Commission’s enterprise and industry directorate said the main legal issues with whistle-blowers were an “unforeseen downside” of the text.

NGOs offered mixed reactions to the agreement.

“This is a bittersweet deal,” said a statement from environmental group Client Earth. “The text is much better than the original proposal, with stronger protection for journalists, whistle-blowers and public authorities who reveal information in the public interest. Nevertheless, the definition of a trade secret is still too broad.” 

A special parliamentary committee established in the wake of the Luxleaks revelations also defended whistle-blower protections in a non-binding report adopted last month. It called on the Commission to propose by June 2016 a specific “framework for the effective protection of whistleblowers” who reveal business information.

Technical meetings will now finalize the legal side of the trade secrets agreement and EU ambassadors are expected to endorse the deal Thursday. Parliamentary sources said the text would most likely be tabled for a plenary vote in February.

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