Last week the top court in the European Union found that Privacy Shield, the framework used to transfer data between the E.U. and the U.S., does not sufficiently protect the privacy of E.U. citizens. and is therefore invalid. The courts decision has left many businesses scrambling and throws the difference between E.U and U.S. privacy standards in stark relief.
Privacy Shield was a data sharing framework enacted by the E.U. courts in 2015. Since then, however, the E.U. established the General Data Protection Regulation (GDPR) three years later, which places stricter privacy requirements when processing the data of E.U. citizens. According to the Washington Post, over 5,300 companies — including Facebook, Google, Twitter, and Amazon — that signed up to use the Privacy Shield framework now need to find a new way to handle the data of E.U. citizens in the United States.
The court made their decision after privacy expert Max Schrems filed a complaint against Facebook for violating his privacy rights under the GDPR once Facebook moved his information to the U.S. for processing. While the GDPR does allow the data of E.U. citizens to be transferred to other countries, that data must continue to comply with the GDPR standards after it is transfer. The problem with Privacy Shield, according to the E.U. decision, is that the U.S. government has wide-reaching access to personal data stored in the United States. And while the E.U. acknowledges that government authorities may access personal information when necessary for public security, the courts ultimately found that the U.S. does not meet the requirements of the GDPR “in so far as the surveillance programmes…. are not limited to what is strictly necessary.”
This decision starkly highlights the differences not only in E.U. and U.S. privacy regulations but also the privacy standards used in surveillance activities. In a statement to the Washington Post, Schrems said, “The court clarified…that there is a clash of E.U. privacy law and U.S. surveillance law. As the E.U. will not change its fundamental rights to please the [National Security Agency], the only way to overcome this clash is for the U.S. to introduce solid privacy rights for all people — including foreigners….Surveillance reform thereby becomes crucial for the business interests of Silicon Valley.”
Moving forward, U.S. companies processing E.U. citizen data will either need to keep that data on servers within the E.U. or use standard contractual clauses (SCCs). SCCS are legally agreements created by individual organizations that cover how data is used. Of course, any SCCs will need to be compliant with the GDPR.