United States: EU-US Privacy Shield: Brace Yourself . . . Or Maybe Not

On February 29, 2016, the European Commission and United States released the terms of the much-anticipated renewed framework for the transfer, sharing, and processing of European individuals' data to the United States. The framework replaces the "Safe Harbour" mechanism, which enabled U.S. to transfer data from the EU to the United States by self-certifying that their practices ensured an adequate level of protection for personal data under the EU Data Protection Directive. In October, the "Safe Harbour" framework was declared invalid by the European Court of Justice in the Schrems decision covered earlier in this blog.

The agreement reached between the European Commission and several U.S. government agencies defines the obligations now placed on participating companies that transfer data to the United States. Two driving forces behind the renegotiation have created two distinct but related sections of the framework: 1) the mechanism, and 2) commitments from United States agencies to provide adequate protection to data related to individuals in the EU, including in the area of enforcement and surveillance.

Below we present an overview of the logistical steps the proposed framework must pass to be implemented in the EU and discuss in detail the measures businesses might take to prepare themselves to comply under the terms of the new Privacy Shield.

Final hurdles

The European Commission judged the Privacy Shield and commitments from the United States to be adequate measures to meet EU standards of data privacy in the United States and has drafted a proposal of what is called an 'adequacy decision'. Before its final adoption by the European Commission, the decision must be reviewed by a number of groups including the Data Protection Authorities (DPAs) of the EU Member States and the European Parliament. That vetting process may require a couple of months, but the DPAs' timeline indicate a decision could be reached by the end of April. We can expect much debating in Parliament, but ultimately the European Parliament would not be able to block the final decision.

The Privacy Shield – Companies, prepare yourselves

First, and most importantly for companies and end users of individual data, the European Commission has expressed concerns and dissatisfaction with the way U.S. companies upheld the principles and obligations of the Safe Harbour scheme. For that reason, the Privacy Shield goes further than the Safe Harbour framework in imposing stronger obligations on companies in the US to protect personal data of Europeans and in offering robust enforcement mechanisms.

In line with the Safe Harbour framework, the Privacy Shield is based on a 'self-certification' mechanism, whereby companies can voluntarily choose to register, "opt in." Once registered, the Privacy Shield obligations become binding and enforceable. So, what should companies do while waiting for the entry into force of the Privacy Shield? Well, they can start by reviewing some of the important obligations that will impact their organisations should they opt in:

  • Make clear information available to EU individuals through the company website regarding data processing and the company's obligations under the Privacy Shield. That declaration should include a link to the Department of Commerce's Privacy Shield website;
  • Provide clear information regarding the rights of individuals to access their personal data, the requirement to disclose that data in case of a lawful request by the authorities, and your liability in case of onward transfer of data to third parties;
  • Clearly state the purpose of your data collection and processing activities;
  • Establish a rapid response mechanism, responding within 45 days, to individuals who may complain or inquire about your practices;
  • Provide individuals, at no cost, an independent recourse mechanism which can investigate and resolve the individual's complaints or disputes;
  • Commit to binding arbitration at the request of the individual for any unresolved complaint or dispute;
  • Respond promptly to inquiries by the Department of Commerce who will have oversight of the Privacy Shield framework and the authority to bar and fine participants;
  • Ensure the company's commitments are kept as long as it holds the data;
  • Make public and be transparent about any enforcement action including FTC (Federal Trade Commission) and court actions for non-compliance in which the company is involved.

Participants will also need to ensure that data transferred to third parties is used only with a limited and specific purpose, and that the third party complies with the same principles and offers at least the same level of protection as the data transferor. Your company should examine all appropriate steps to mitigate and block unauthorized processing by third parties.

U.S. Agency Commitments

Secondly, the Schrems case struck down Safe Harbour because of the lack of safeguards and control mechanisms against "widespread" and "indiscriminate" surveillance activities by US authorities. That issue has been extensively addressed by a series of political and procedural commitments issued by several U.S. federal agencies including the Department of Commerce, Transportation, State, Justice and the office of the Director of National Intelligence. In a nutshell, those commitments revolve around clear limitations, safeguard, and oversight mechanisms. They range from annual review commitments, prompt enforcement, binding arbitration, and cooperation with DPAs, to the creation of a new "independent" Privacy Shield Ombudsman function at the State Department that will address concerns of EU individuals relating to US signals intelligence. The US has also offered further legal remedies that EU individuals will be able to exercise in the US.

Other noteworthy changes

The Department of Commerce has taken further important conciliatory steps to work with local DPAs across the European Union. For instance, Commerce is working to resolve EU individual complaints within 90 days through the establishment of the dedicated point of contact. The Federal Trade Commission will also work closely with the DPAs to provide enforcement assistance.

EU individuals will also be able to pursue legal remedies through private action in the U.S. state courts.

In the area of law enforcement, U.S. access to data under the Privacy Shield will be permitted within the limitations and with respect to 'proportionality' and 'necessity' and 'reasonableness' principles.

Clarity for the future?

We know that privacy advocates across the EU have already vowed to challenge the new framework. We should not discount the possibility of an escalation to the European Court of Justice of a Schrems (part 2) scenario. However, the slowness of the process means that we can expect for the EU-U.S. Privacy Shield to be in place for at least five to seven years. However, because the Privacy Shield comes with numerous obligations and potentially strong enforcement, we recommend that companies seeking its protection also seek knowledgeable advice on how best to comply with its requirements.

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
17 Oct 2017, Seminar, California, United States

Please join us for Sheppard Mullin's Labor & Employment Law Update & Happy Hour Seminar Series. 2017 presents significant developments in California labor and employment laws that will affect the way you run your day-to-day business operations. We will provide analysis and insight on these new laws, as well as offer practical advice and helpful tools for employers to protect their organizations from liability in the workplace.

17 Oct 2017, Seminar, California, United States

Covering topics such as promotions and sweepstakes, mobile advertising challenges, privacy considerations, claim substantiation and more, this expansive program will equip you with the tools you need to practice advertising law today.

18 Oct 2017, Seminar, Santa Clara, United States

The All Hands Meeting is a unique, multifaceted and affordable annual event tailored to the special needs of in-house professionals whose companies rely upon intellectual property. Scores of cutting-edge CLE presentations address the spectrum of legal, regulatory and ethical issues this community faces on a daily basis.

 
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.