Ireland: Behind The Headlines: DPC v Facebook And Its Potential Impact On International Trade

Earlier this year, the Irish Data Protection Commissioner commenced proceedings in the High Court against Facebook Ireland Limited and Maxmillian Schrems. These proceedings have attracted unprecedented global interest. We provide an insight into the status of this litigation and its potential implications.

In May 2016, the Irish Data Protection Commissioner ("DPC") started proceedings in the High Court, seeking a reference to the Court of Justice of the European Union ("CJEU") for a preliminary ruling on the validity of the EU Commission decisions which permit data transfers from the EU to third countries on foot of standard contractual clauses ("SCCs").

This litigation, which stems from a complaint by Maxmillian Schrems ("Schrems") to the DPC in respect of Facebook Ireland Limited ("Facebook"), is a follow-on from related litigation (Schrems v Data Protection Commissioner) which resulted in the 2014 CJEU ruling that the EU Commission decision underpinning Safe Harbor was invalid.

The underlying issues

Article 25(1) of the Directive 95/46/EC (the "Directive") prohibits the transfer of personal data outside the EU unless the country to which the data is transferred "ensures an adequate level of protection" for the data protection rights of those individuals whose data is transferred.

However, the Directive provides an exception whereby a Member State may authorise transfers of personal data to a third country which does not ensure an adequate level of protection if "appropriate contractual clauses" are used. These "appropriate contract clauses" are the SCCs, which are heavily relied upon in international commerce to move data from Europe to other jurisdictions.

There are currently three sets of SCCs which have been approved by the Commission ("the SCC Decisions").

In October 2015, in its judgment in Schrems v DPC,  the CJEU laid down the process which national data protection authorities – like the DPC – are expected to take when they have doubts about the validity of a tool that is used to transfer personal data out of Europe: "It is incumbent upon the national legislature to provide for legal remedies enabling the national supervisory authority concerned to put forward the objections which it considers well founded before the national court in order for them, if they share its doubt as to the validity of the Commission decision, to make a reference for a preliminary ruling for the purpose of examination of the decision's validity."

On review of Schrems' reformulated complaint following the judgment in Schrems v DPC, the DPC formed the preliminary opinion that there are well-founded objections to the SCC Decisions and doubts as to their compatibility with Article 47 of the Charter of Fundamental Rights (the right to an effective remedy). She then commenced the present case against Facebook and Schrems seeking a reference to the CJEU for a preliminary ruling on the validity of the SCC Decisions. A finding that the SCC Decisions are invalid would likely have a profound impact on international business, which increasingly relies on the free flow of personal data across borders.

Global interest

In an unprecedented development, eleven separate applicants including the USA, various industry bodies and human rights advocates sought leave from the Court to be joined as amici curiae (friends of the Court). Four parties, namely the USA, the Electronic Privacy Information Centre, Digital Europe and BSA Business Software Alliance were successful in their applications.

The widespread interest in this case arises, in part, from the potential economic and commercial consequences that could flow from a ruling that the SCC Decisions are invalid. In a 2013 trade impact assessment completed by the European Centre for International Political Economy for the US Chamber of Commerce, it was estimated that if services and cross-border data flows were to be disrupted, the negative impact on EU GDP could reach -0.8% to -1.3% and EU services exports to the US could drop by -6.7% due to loss of competitiveness.

Current Status

A timetable has been set down by the Court for exchanges of pleadings, submissions and affidavits of evidence culminating in a three week trial commencing on 7 February 2017.

Interplay with the EU-US Privacy Shield

On 12 July 2016, the European Commission adopted the replacement for the EU-US Safe Harbor scheme which was invalidated in Schrems v DPC – the so-called 'Privacy Shield', which addresses the wider concerns raised by the Schrems judgment. The Shield imposes greater obligations on US companies who self-certify under the scheme and provides for stronger oversight and enforcement against participating companies by US authorities. In addition, EU concerns over US surveillance have been addressed through commitments given by US authorities and by reforms in US surveillance laws.

Privacy Shield is separate and distinct from the SCC Decisions, and, to date, its validity has not been challenged in the current litigation. However, it is possible that a judgment in the current case could have a knock-on effect on the Privacy Shield and lead to doubts about its validity.

Conclusion

An adverse ruling on SCCs will likely have major ramifications for the transfer of data between the EU and other jurisdictions.

Businesses that rely on international data transfers should follow this case closely. However,  it is important to note that, unless and until the CJEU finds that the SCC Decision are invalid, SCCs remain a valid ground to transfer personal data from Europe. If a reference is made, a judgment from the CJEU is unlikely to come down before 2017.

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 Mondaq.com.

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

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
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

Mondaq.com (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 www.mondaq.com

To Use Mondaq.com 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.

Disclaimer

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.

General

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