United States: EU-US Privacy Shield Released

Today, the U.S. Department of Commerce (DOC) released the full text of the new transatlantic data transfer agreement with the European Union (EU). The new framework, known as the EU-US Privacy Shield, was agreed to in early February following the EU Court of Justice ruling striking down the long-standing Safe Harbor Privacy Principles, which permitted U.S. companies to self-certify their adherence to seven EU privacy principles. The Privacy Shield provides greater protections for EU residents, detailed below. The same day, the European Commission released an adequacy decision, effectively giving its approval to the Privacy Shield, but, at the same, time calling for the United States to increase its domestic privacy protections.

Under the Privacy Shield, U.S. companies that transfer data to and from the EU will be required to implement a privacy policy that conforms to the privacy principles outlined in the Privacy Shield, to make such policies publicly available, and to annually recertify their compliance with the DOC. While a company's decision to self-certify its adherence to the Privacy Shield principles is initially voluntary, once it does so, its commitment is enforceable under U.S. law by either the Federal Trade Commission or the Department of Transportation, depending on which agency has jurisdiction over the company. The DOC will maintain and publish a listing of all companies that have self-certified their adherence to the Privacy Shield, as well as removing those that voluntarily withdraw, fail recertification or are found to be persistently noncompliant. In cases of persistent noncompliance, the DOC will maintain a list of those companies and the reasons for noncompliance.

In the interim period between the invalidation of the previous Safe Harbor agreement and the implementation of the new Privacy Shield, other means for data transfers between the United States and the EU have been permitted to continue. These include Standard Contractual Clauses and Binding Corporate Rules, which can still be used for personal data transfers to the United States. However, the working group of EU Data Protection Authorities charged with implementing the Privacy Shield have made clear that they intend to review whether these other means remain viable in light of the new protections provided by the Privacy Shield. This review is likely to take place in March.

Privacy Shield Principles

The Privacy Shield puts forward seven primary privacy principles, as well as 16 supplemental principles (collectively, the "Principles"). In order to rely on the Privacy Shield to effectuate transfers of personal data from the EU, a company must self-certify its adherence to the Principles to the DOC (or its designee). While decisions by companies to enter into the Privacy Shield are voluntary, compliance is compulsory: companies that self-certify to the DOC and publicly declare their commitment to adhere to the Principles must comply fully with the Principles.

The seven primary principles are:

  1. Notice: A company must provide individuals with information about its participation in the Privacy Shield, the types of data it collects and the purposes for which such data is used, the identity of any third parties to which such data may be transferred, the right of individuals to access any data collected about themselves, the ability of individuals to limit or tailor the types of data collected about themselves, and an independent dispute resolution mechanism designed to address complaints and provide recourse to individuals free of charge.
  2. Choice: Companies must provide individuals with the option to choose whether their personal information can be disclosed to a third party or be used for a purpose that is materially different from that for which it was originally collected ("opt-out"). For sensitive information, such as medical, racial/ethnic and religious beliefs, companies must obtain affirmative consent ("opt-in") before transmitting to a third party or for a materially different use.
  3. Accountability for Onward Transfer: Companies must comply with the notice and choice principles above in order to transfer data to a third party, and they must enter into a contract with the third party stating that such information may be used only for limited and specified purposes consistent with the consent provided by an individual and that the third party will provide the same level of privacy protection under the Principles.
  4. Security: Companies obtaining, processing and/or disseminating personal information must take reasonable steps to ensure that such information is protected from loss, misuse, unauthorized access, disclosure, alteration or destruction.
  5. Data Integrity and Purpose Limitation: Collection of personal information must be limited to such information that is relevant for the purposes of processing. A company may not process information in a way that is incompatible with the purpose for which it has been collected.
  6. Access: Individuals must be given the ability to access information collected about themselves and have the ability to edit or delete information where it is inaccurate.
  7. Recourse, Enforcement and Liability: Companies must provide a recourse mechanism to address individual complaints when adherence to the Principles is not followed. This includes, at a minimum, readily available independent recourse mechanisms for investigation of complaints at no cost to the individual, follow-up procedures for verification of attestations and assertions that companies make about their privacy practices, and obligations to remedy problems arising out of failure to comply with the Principles. Companies are obligated to arbitrate claims and follow the terms as of the Arbitral Model (described below), provided that an individual has invoked binding arbitration by delivering notice to the company.

The Supplemental Privacy Principles contain specific requirements relating to especially sensitive information, journalistic exceptions, liabilities for Internet Service Providers, due diligence and audits of adherence to the Principles, the role of EU Data Protection Authorities, and self-certification and compliance verification procedures, as well as greater detail on access, transfer and dispute resolution.

Arbitral Model

The Privacy Shield includes a model for binding arbitration of complaints to disputes raised by EU individuals under the Recourse Principle; however, it is designed as a last-resort option and requires individuals to pursue remedies through other means first. Individuals opting to invoke the arbitration option must have previously raised the complaint directly with the company in question and must have afforded the company the opportunity to resolve the issue within 45 days of the original complaint. The individual must also have made use of the dispute resolution mechanism provided by the company at no cost and must have raised the complaint with an EU Data Protection Authority or the DOC before invoking arbitration. Once these requirements are met, should the individual feel that a suitable remedy has not been made, he or she may invoke binding arbitration proceedings. Under the arbitration option, a Privacy Shield Panel (consisting of one or three arbitrators, as agreed by the parties involved) will have the authority to impose individual-specific, nonmonetary equitable relief (such as access, correction, deletion or return of the individual's data in question) necessary to remedy the violation of the Principles with respect to only the individual. These are the only powers of the arbitration panel with respect to remedies.

Next Steps

With the release of the final text of the Privacy Shield, and the adequacy decision issued by the European Commission, a committee composed of representatives of the EU Member States and the EU Data Protection Authorities will be formed and will give their opinion, before a final decision by the EU College of Commissioners. In the meantime, the United States will make the necessary preparations to put in place the Privacy Shield. The decision concluding the final agreement should be adopted by the EU Council after obtaining the consent of the European Parliament.

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.

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

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.


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