The historic European Union Directive on Data Protection takes effect in October 1998. A key provision prohibits transfer of personal information from Europe to other countries if the European Commission decides that they lack "adequate" protection of privacy. If enforced as written, the Directive could significantly disrupt commerce between Europe and other countries, such as the United States, that do not have comprehensive privacy statutes. In this book, Peter Swire and Robert Litan analyze the tension between privacy laws, which restrict data flows, and modern information technologies, which encourage them. Based on study of actual data flows between Europe and the United States, the book provides the first detailed analysis of the potential sector-by-sector effects of the Directive. This analysis reveals significant problems under the Directive for financial services, human resources records, corporate intranets, and many other essential aspects of modern economies. The book offers policy recommendations for helping to avoid a possible trade war with Europe. This book will be of interest to the many individuals and organizations affected by the new European privacy laws and by proposed new privacy laws in the United States.