The privacy measure -- known within the EU as the "anti-FISA clause," for the U.S. Foreign Intelligence Surveillance Act that authorizes Washington to eavesdrop on international phone calls and emails -- would have invalidated any U.S. request for Google Inc., Facebook Inc., Verizon Communications Inc. or other high-tech Internet and telecommunications company to hand over computer and telephone data about EU citizens, the newspaper said, citing documents and three senior EU officials.
The EU's executive body, known as the European Commission, dropped the anti-FISA clause in January 2012, despite arguments from European Justice Commissioner Viviane Reding, who said the exemption would stop the very type of surveillance that was disclosed last week to be part of the U.S. National Security Agency's clandestine PRISM electronic-surveillance program.
Many EU commissioners -- after being lobbied by Homeland Security Secretary Janet Napolitano and top Commerce Department lawyer Cameron Kerry, brother of Secretary of State John Kerry -- argued the anti-FISA clause would be of little value because most data servers of high-tech giants with information about EU citizens were in the United States anyway, the Times said, and the commissioners said they didn't want to antagonize Europe's most important ally.
The EU dropped the clause in part out of fear it might complicate a proposed trade deal between Washington and Brussels, an EU official told the newspaper, referring to recently launched EU-U.S. trade talks.
Those talks have hit a snag over the threat to European culture some European countries see from U.S. mass-market entertainment.
U.S. diplomats declined to comment on the U.S. lobbying effort, other than to say their views were solicited and welcomed by Brussels officials.
"That's what diplomats do," U.S. Ambassador to the EU William Kennard told the newspaper.
"As we both modernize our data-privacy systems, we must make sure that we build interoperable systems that protect privacy and protect our citizens from transnational criminal threats," he said.