United States: Electronic Discovery & Information Governance - Tip of the Month: Managing International Data Transfers After EU-US Safe Harbor Framework Invalidated

Scenario

A large international corporation is involved in litigation in the United States. It has received discovery requests that necessitate the review and potential disclosure of extensive records located within the European Union (EU). The company has learned that the European Court of Justice (ECJ) has recently declared the EU-US Safe Harbor framework invalid. It wishes to understand whether this ruling has any implications for its proposed approach to review and disclosure.

Background and Decision

Under the EU Data Protection Directive (the Directive), transfers of personal data from the European Union to territories outside the European Union are only permitted if adequate protection is ensured for that data in the territory to which it is transferred. The Directive provides that the European Commission (EC) may find that a third country ensures an adequate level of data protection through its domestic law or international agreement. EC Decision 2000/520 stated that adequate protection is provided by US businesses that sign up to the Safe Harbor principles.

In 2013, Max Schrems, a Facebook subscriber from Austria, filed a complaint with the Data Protection Commissioner (DPC) of Ireland requesting that the DPC prevent Facebook in Ireland from transferring his personal data to the United States under the Safe Harbor framework on the basis that US law and practice did not ensure adequate protection of that data. Schrems challenged the Irish DPC's conclusion that it was bound to permit the transfer of the data by EC Decision 2000/520. In support of his complaint, Schrems cited the revelations published by Edward Snowden concerning the US National Security Agency's surveillance of data held by Safe Harbor participants.

The case was referred to the ECJ, which determined that the current Safe Harbor framework did not ensure an adequate level of protection under the Directive and that Decision 2000/520 was invalid. In particular, the ECJ found that because US national security, public interest and law enforcement requirements overrode Safe Harbor principles, this gave rise to potential interference by US public authorities with the fundamental rights of the data subjects. Notably, the ECJ found that EU data subjects had no administrative or judicial means of redress in relation to such interference.

Consequences of the Schrems Decision

The ECJ decision affects companies that rely solely upon the Safe Harbor framework to transfer personal data from the European Union into the United States.

Recognizing the potential for panic created by this decision, various EU-national DPCs have announced that they will work on guidance for those affected by the decision, rather than rushing to enforce its effect. While this should give organizations some breathing space in which to consider whether practical alternatives are available, any potentially affected organization should commence an urgent review of its position.

Next Steps

In the scenario above, it will be important for the company to identify the data that might be transferred, ascertain whether it includes personal data and identify the basis upon which it will be transferred.

If, for instance, the collection and review will be conducted or supported by a third-party Legal Process Outsourcing (LPO) provider and involve the transfer of data into the United States, then confirmation should be sought on the specific regime under which this will take place. If the LPO provider is relying solely on having signed up to the Safe Harbor framework, then alternative avenues should be explored.

Transfers Under Article 26(1)(d)

Article 26(1)(d) of the Directive provides that transfers of personal data may take place where they are necessary for (among other matters) the purposes of establishing, exercising or defending legal rights. The Article 29 Working Party, an independent European advisory body on data protection established under the Directive, acknowledged in its Working Paper 114 that transfers of data for pre-trial discovery or disclosure in US proceedings may fall within this provision. However, they emphasize that, because it is a derogation from the Directive's prohibition against transfers to territories that do not provide adequate protection for personal data, the provision must be construed strictly. So, for instance, the bulk transfer of broad categories of data not yet reviewed for potential relevance would not be protected.

It is also important to note that the collation and review of data for potential disclosure constitutes "processing" of data under the Directive. Article 7 of the Directive, which permits processing of data for the purposes of the legitimate interests of the data controller, can potentially apply to such collation and review. However, the Article 29 Working Party noted (in the same working paper) that:

  • A strict interpretation must be applied to the derogation;
  • The interests of the data subject must be balanced against the legitimate interests of the controller; and
  • That will involve considering such procedures as anonymizing or pseudonymizing data and pre-filtering irrelevant data.

Consent

Processing and transfer of personal data may be done with the data subject's consent. However, any such consent must be clear and unambiguous, freely given, specific and informed. Further, national DPCs have regularly expressed caution regarding exclusive reliance upon consent (which can be withdrawn). Further, as a matter of practicality, there may be several data subjects in relation to a single record.

Alternative Regimes Under Which Data Is Transferred

Alternative arrangements exist under which data is transferred internationally by organizations, although the establishment of such arrangements is typically time consuming and costly. These arrangements include:

  • Binding Corporate Rules: this option is available (only) to multinational organizations regarding transfers within their group. These rules create rights for individual data subjects and obligations for the group companies. However, implementation is potentially complex and expensive (requiring the approval of each affected national DPC).
  • EC model clauses: the EC has approved certain sets of standard contractual clauses as providing adequate levels of protection. The clauses cannot be altered in any way or they will be ineffective. Some EU member states require notification to, or approval by, the relevant national DPC.

An anticipated consequence of the reasoning behind the Schrems decision (that is, the inadequacy of the framework to protect personal data from unrestricted access by US authorities) is the further scrutiny of the adequacy of the protection provided under these other methods of data transfer.

Conclusion

Negotiations regarding the Safe Harbor regime have been proceeding between the EC and the US Department of Commerce since 2013. These discussions have not yet resulted in a concluded agreement and Schrems will increase the pressure to reach a mutually satisfactory position. Whatever the outcome, in the meantime, organizations affected by Schrems need to act promptly.

Learn more about Mayer Brown's Electronic Discovery & Information Governance practice.

Visit us at mayerbrown.com

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2015. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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
 
In association with
Related Video
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
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.