Canada: Europe's Top Court Invalidates ‘Safe Habour' Data Transfer Framework

Last Updated: October 12 2015
Article by Kirsten Thompson, Daniel G. C. Glover, Barry B. Sookman, Charles S. Morgan and Breanna Needham

Most Read Contributor in Canada, September 2018

On October 6, 2015, the Court of Justice of the European Union ("CJEU") declared that the US-EU Safe Harbour framework is invalid, striking it down in the highly anticipated case of Schrems v. Data Protection Commissioner. The decision is effective immediately, with far-reaching and widespread implications for entities with multinational data flows.

Since EU data protection laws purport to apply to the processing of personal data regardless of whether the individuals affected are EU citizens or not, or are physically present in the EU or not, the potential impacts of this decision go beyond those organizations with an EU clientele. Any organization that makes use of equipment located in a Member State to process personal data is potentially at risk.


Max Schrems, a law student and privacy advocate from Austria, initiated a case against Facebook in Ireland asserting that American mass surveillance programs (such as the NSA activity divulged by Edward Snowden) violated his privacy. The Safe Harbour framework permits major U.S.-based organizations to self-certify that they are providing an "adequate level of protection for privacy and fundamental rights and freedoms" in compliance with EU privacy laws.

While the Irish Data Protection Commissioner originally rejected the case on the basis that the European Commission had already found the Safe Harbour framework to be compliant, the High Court of Ireland referred the question of the legality of the Safe Harbour framework to the CJEU for consideration. Notwithstanding prior blessing from the European Commission, the CJEU concluded that the framework was incompatible with EU privacy norms.

Despite assertions that U.S. intelligence gathering is of a targeted, rather than a general, nature, the CJEU fundamentally disagreed. It found the original Safe Harbour Decision invalid on the basis that self-certifying organizations "are bound to disregard" fundamental privacy rights when they conflict with the national security and public interest requirements or domestic legislation of the United States. This finding thus renders illegal any transfer of personal data from the EU to the United States that is based solely on Safe Harbour self-certification.

The CJEU's ruling is final, with no avenue for appeals.


The CJEU's decision, unlike many major decisions with far-reaching implications, has no transition period to allow for phased-in implementation; it is effective immediately. Since many Canadian businesses have relied on service providers self-certifying under the Safe Harbour framework for cloud-based data storage operations, their operations may be significantly impacted, particularly for national or multinational organizations or organizations that make use of a cloud network with EU and US servers. While negotiations between the US and EU on a new Safe Harbour framework have been underway for some time, there is no guarantee that the end result will be a new framework, or if it is, that such a framework would survive the scrutiny of the court.

Since Article 4 of the EU Data Protection gives EU data protection authorities jurisdiction when a "controller" is not established on EU territory if the controller "makes use of equipment, automated or otherwise, situated on the territory of [a] Member State", the Schrems decision could also apply to any organization using a cloud network with EU and US-based servers, even if the personal information connects to Canadian or U.S. residents.

In addition to the immediate ramifications related to finding and implementing alternative options to the Safe Harbour framework, the decision raises the question as to whether Canada's Personal Information Protection and Electronic Documents Act (PIPEDA) and EU-Canada data transfers may be in line for similar treatment given the similar ability of Canadian authorities to access networked information on a national security basis.

Next Steps

Since the Safe Harbour method has been struck down, organizations will need to swiftly assess alternative options for data transfers. These mechanisms include Model Clauses, Binding Corporate Rules, anonymization, and express consent. The Model Clauses approach uses a standard, pre-approved form language, approved by the European Commission, for data transfers, while the Binding Corporate Rules approach requires the crafting of a binding policy governing related internal entities making international data transfers. The Binding Corporate Rules approach is time-consuming, and is limited in application due to a failure to encompass the external entities often used in the regular course of business. Model Clauses are also time consuming, extremely rigid, and subject to audit. While these approaches present alternative mechanisms, albeit with some limitations, there exists speculation that they too could be subject to attack, especially given the basis upon which the Schrems decision was made. Other approaches include obtaining express consent, which must be prior, unambiguous, and voluntary. The problem with express consent arises in that, since consent must be both prior and informed, from a practical implementation perspective it will be almost impossible to obtain such consents in relation to personal information that has already been collected and potentially very difficult to manage on a going-forward basis. At this particular point in time, no alternative stands out as both viable and desirable for all circumstances. A careful assessment must be made of the alternative options taking into account the needs of the organization and its service providers.

What Canadian Business Needs to Know

The decision by the CJEU to strike down the Safe Harbour framework, effective immediately, requires that affected organizations swiftly assess alternative approaches to data transfers. Given that thousands of entities relied on Safe Harbour, the ramifications of the decision for Canadian businesses may be significant. While alternative approaches to data transfers do exist, each raises complex issues related to implementation.

To assist further assessment of the options for organizations, the Technology Group at McCarthy Tétrault will be holding a webinar discussing the implications of the decision and the hurdles associated with implementing alternative structures for data transfers on Friday, October 16, 2015. Join Barry Sookman, Charles Morgan, Dan Glover and Kirsten Thompson as they explore the impact of the decision on Canadian business and considerations for the future.

To view the original article please click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions