The European Union’s (EU) highest court, the European Court of Justice, struck down the 15-year-old “Safe Harbor” pact used by companies to transfer Europeans’ personal data to the United States. The ruling affects approximately 4,500 companies that move and/or store personal data. The ruling was based on the Edward Snowden leaks, which the EU court cited as a clear demonstration of an inability to safeguard Europeans’ personal data. The EU court ruling ultimately found that the data-transfer pact with the US violates the privacy of its citizens.
This ruling throws into question the transfer of data that underpins the world’s largest trading relationship – the US and the EU. National regulators in the EU can override the 15-year-old “Safe Harbor” pact, used by companies like Apple and Google, because it violates the privacy rights of Europeans by exposing them to allegedly indiscriminate surveillance by the US government. Among those affected by the ruling are:
Now companies are scrambling to understand the ruling and to preserve their ability to transfer Europeans’ personal data to the US before regulators move in with fines or orders to suspend data flows.
While there is a need to find either an alternative to or reformed version of Safe Harbor, there is likely no unified regulation (like the invalidated Safe Harbor pact) that will be in place for some time. EU law provides for two additional ways to transfer personal data legally, but these methods are more time-consuming to implement because they often require prior approval from regulators.
The two methods for data transfers out of the European Economic Area (EEA) are:
The European Court of Justice’s decision does not mandate an immediate end to those personal-data transfers. But it does rule that national European data-protection regulators have the right to investigate the transfers and suspend them if sufficient protections are not provided. The burden now shifts to companies with a need to conduct a data transfer involving Europeans’ personal information.
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