United States: EU-US Privacy Shield: Still Awaiting Certainty

The European Perspective

Privacy activists across Europe raised their data protection banner following the announcement by EU Commissioner for Justice, Consumers and Gender Equality Věra Jourová on Tuesday 2 February 2016 that a political agreement had been reached between the EU and the US on a new framework for handling transatlantic data flows. This does not bode well, especially because the exact content of the new agreement which will replace the "Safe Harbour" mechanism is still unknown. We will expand on the indications provided by the Commissioner on some of the negotiated protection mechanisms. More importantly, we will highlight the risks that over 4.000 companies, mainly US tech companies, still face and the measures they should put in place to ensure compliance with EU data protection rules.

Safe Harbour and the storm

In October 2015, the Court of Justice of the European Union (CJEU) in case C-362/14 Maximillian Schrems v Data Protection Commissioner (reported on here) declared the Safe Harbour scheme invalid. Thousands of companies that relied on this cost-effective and compliant way to transfer European personal data to companies, subsidiaries or suppliers in the US, were faced with uncertainty and were exposed to potential enforcement actions by national data protection authorities in the EU. This case, which followed a reference from the Irish High Court to the CJEU in which the High Court asked if national data protection authorities were bound by adequacy decisions of the European Commission or if, to the contrary, they may or must conduct their own investigations into the adequate protection of individual's privacy rights. Plaintiff Maximillian Schrems complained that by transferring his personal data to the US, a large American social media company, was unable to adequately ensure that US authorities would not have access to his data through mass and indiscriminate surveillance activities. The CJEU ruled that national data protection authorities must be able to investigate and suspend a transfer if it finds that the protection offered to European individuals were inadequate. At the same time, the CJEU invalidated the simplified mechanism offered by the Safe Harbour.

Following this ruling, US companies that relied on the Safe Harbour, were uncertain as to providing additional protective measures and whether or not they should wait for a Safe Harbour 2.0 version.

Just an announcement

The Commission responded, back in October, that it would take the CJEU ruling on board and work with the Article 29 Working Party – the 28 Member States representatives of the national data protection authorities – to further negotiate a new and improved agreement with the US.

The Commissioner's announcement on 2 February 2016 was received with mixed views and divided opinions. Companies want certainty and welcome the progress made by both sides. Data protection organisations and some members of the European Parliament (MEPs) were more negative, doubting the ability of the US to provide equivalent protection for personal data as at home. The most striking reaction came from the "Article 29 Working Party" who adopted a wait and see approach, urging the Commissioner to provide them with the agreement in order to assess whether it provides answers to the privacy concerns.

In her statement on the new EU-US Privacy Shield, the Commissioner announced that the US committed to providing additional assurances and protections to guarantee that the CJEU's concerns are met, including:

  1. ongoing monitoring by the US Department of Commerce of US companies importing personal data from Europe and more stringent obligations on the processing of data, the protection of individual rights and the further transfer of data;
  2. clear limitations, safeguards and oversight mechanisms on law enforcement and national security authorities ruling out indiscriminate mass surveillance;
  3. real protection and appeal mechanisms, offering EU citizens several accessible and affordable dispute resolution and arbitration mechanisms, as well as the establishment of an independent ombudsman.

Is the end in sight?

US companies have been grappling with transatlantic data flow issues since the CJEU case of last October. This announcement does not yet bring the much awaited certainty, and the reaction of some privacy activists even before the release of the agreement, indicates that new legal challenges cannot be ruled out. National data protection authorities will have the power to investigate and potentially suspend data transfers if they deem the protections to be inadequate.

What should business do?

The Safe Harbour is invalid and companies that were hoping that this new agreement would provide an answer should better review their position. It will take a couple of more months before the agreement is made public and binding. In the meantime, companies that have not taken alternative actions, are still at risk of facing enforcement actions by national data protection authorities. The alternatives for companies remain the adoption of EU model clauses and the establishment of binding corporate rules. These however, are more time consuming, challenging to put in place and under closer individual scrutiny by national data protection authorities. The "Article 29 Working Party" members have confirmed that those data transfer mechanisms can still be used – at least until the group can assess the validity and adequacy of the new agreement.

In short

  1. Investigate the measure your company and the data receiving counterpart in the US have put in place and if those were based on the Safe Harbour mechanism.
  2. Review the agreements you have with your data processor and ensure that you include the right contractual obligations.
  3. National data protection authorities will shortly come out with minimum standards and guidelines. Make sure you are monitoring this on a country by country basis.
  4. Evaluate the possibility to adopt alternative transfer mechanisms or alternative data processing options.

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
Events from this Firm
13 Sep 2018, Other, Los Angeles, United States

Liisa will be giving opening remarks and presenting, "Big Data and Online Behavioral Advertising (OBA): An Advertiser’s Perspective Origins of big data and how to legally acquire data."

20 Sep 2018, Seminar, Los Angeles, United States

The annual seminar addressing changes and developments in state and federal wage and hour laws is a unique one-day program and hundreds of California employers, personnel managers, controllers, attorneys, payroll managers, and supervisors attend each year.

26 Sep 2018, Seminar, San Francisco, United States

Please join us for Sheppard Mullin's Labor & Employment Law Update & Happy Hour Seminar Series.

Similar Articles
Relevancy Powered by MondaqAI
Lewis Brisbois Bisgaard & Smith LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Lewis Brisbois Bisgaard & Smith LLP
Related Articles
 
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
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