United States: Data Protected? Europe Adopts The EU-US Privacy Shield

Following the recent approval by the Article 31 Committee (which includes representatives of the European Union ("EU") Member States) of the final version of the EU-U.S. Privacy Shield ("Privacy Shield"), the European Commission ("Commission") adopted the Privacy Shield on 12 July 2016.

Following the launch of the Privacy Shield, Commissioner Vĕra Jourová commented: "The EU-U.S. Privacy Shield is a robust new system to protect the personal data of Europeans and ensure legal certainty for businesses. It brings strong data protection standards that are better enforced, safeguards on government access, and easier redress for individuals in case of complaints. The new framework will restore the trust of consumers when their data is transferred across the Atlantic. We have worked together with the European data protection authorities, the European Parliament, the Member States and our U.S. counterparts to put in place an arrangement with the highest standards to protect Europeans' personal data."

The Former Safe Harbor Framework

The forerunner to the Privacy Shield - the Safe Harbor framework - allowed EU-based data controllers to transfer personal data to Safe Harbor members in the USA while ensuring an adequate level of protection for such personal data.

Safe Harbor was invalidated in October 2015 by a European Court of Justice decision for two main reasons. First, U.S. intelligence services were able to gain access to personal data transferred to a greater extent than strictly necessary or appropriate for the protection of national security, and second, non-U.S. citizens were unable to obtain legal remedies in the USA for misuse of their data.

The Privacy Shield

The Privacy Shield, which is intended to replace Safe Harbor, comprises a data protection self-certification framework for companies transferring personal data of EU citizens to the USA. The Privacy Shield will ensure stronger protection for TransAtlantic data flows and will protect the fundamental rights of individuals whose personal data is transferred to the USA by data controllers to whom EU data protection legislation applies. It will also provide legal certainty for businesses involved in TransAtlantic data transfers.

The Privacy Shield will apply to both data controllers and data processors and is based on seven core privacy principles, including notice; choice; security; data integrity and purpose limitation; access; accountability for onward transfer; and recourse, enforcement and liability (the "Principles"). It is regarded as being fundamentally different from Safe Harbor, imposing clear and strong obligations on companies handling personal data and ensuring that the rules are adhered to and enforced in practice.

Following the political agreement of 2 February 2016 between the Commission and the U.S. Government on a new framework for TransAtlantic exchanges of personal data for commercial purposes, the Commission originally presented a draft decision on the Privacy Shield on 29 February 2016. The Article 29 Working Party, the European Parliament and the European Data Protection Supervisor all criticized the original draft and requested amendments.

The final version of the Privacy shield addresses the following matters:

  • Annual Joint Review Mechanism:

    • An annual joint review mechanism conducted by the Commission and the U.S. Department of Commerce, together with associate national intelligence experts from the U.S. and European Data Protection Authorities will oversee the functioning of the Privacy Shield. A public report will be issued by the Commission to the European Parliament and the Council.
  • U.S. Government Access:

    • U.S. government access will be subject to clear safeguards and transparency requirements. The U.S. has assured the EU that public authorities' access for national security and law enforcement purposes will be subject to clear limitations, safeguards and oversight mechanisms, preventing generalized access. There will also be redress mechanisms in this regard for the first time.
    • Indiscriminate mass surveillance of European citizens personal data transferred to the U.S. under the Privacy Shield will not be permitted.
    • Bulk data collection may only take place in accordance with specific pre-conditions and should be as focused as possible. The Privacy Shield includes safeguards for using data in these special circumstances.
    • The U.S. Secretary of State has implemented a redress process for individuals in respect of complaints or enquiries individuals may raise in a national intelligence context through an Ombudsperson mechanism that will be independent of the U.S. intelligence services.
  • Data Handling Obligations:

    • There are stringent requirements on companies handling data.
    • The U.S. Department of Commerce will carry out regular reviews of participating companies to make sure that they are complying with the rules (if not, sanctions will be applied and companies could be removed from the Privacy Shield list). There will be effective supervision mechanisms.
    • The rules on onward transfers of personal data to third parties should ensure the same level of protection for personal data that is transferred by companies participating in the Privacy Shield.
  • Protection of Individual Rights:

    • Individuals who believe that their data has been misused under the Privacy Shield framework will have access to a number of affordable and accessible dispute resolution mechanisms.
    • If complaints cannot be resolved by participating companies themselves, free alternative dispute resolution mechanisms will be available.Individuals can also approach their national data protection authorities, who will work with the Federal Trade Commission to ensure that EU citizens' complaints are reviewed and resolved.
    • An arbitration mechanism will be available as a final means of resolution if cases are not resolved through other methods.
    • As noted above, national intelligence-related issues will be resolved through the Ombudsperson mechanism.

Recent Updates

The final version of the Privacy Shield takes into account the views of the Article 29 Working Party, the European Parliament and the European Data Protection Supervisor in a number of areas. For example:

  • Regarding onward transfers of personal data to third parties by Privacy Shield companies, the requirement to provide the same level of protection has been clarified further and now obliges third parties to inform the Privacy Shield company if it is no longer able to ensure the appropriate level of data protection, following which the Privacy Shield company will have to take appropriate measures.
  • Existing limitations on data retention have been clarified. Privacy Shield companies may only keep personal data for as long as this serves the purpose that such data were collected for.
  • Regarding the bulk collection of data, the Office of the Director of National Intelligence in the USA clarified through a further document how bulk collection of personal data could only be used under specific pre-conditions and should be as targeted as possible (as noted above), especially through the use of filters and the requirement to minimize collection of non-pertinent information.
  • The functioning and independence of the Ombudsperson mechanism was clarified, especially regarding its independence and cooperation with other independent oversight bodies with investigatory powers.

What Next?

The adequacy decision entered into force on 12 July 2016 following notification of the EU Member States. In the USA, the Privacy Shield will be published in the Federal Register and the U.S. Department of Commerce will begin operating the Privacy Shield and will monitor the compliance of Privacy Shield companies' privacy policies. U.S. companies will be able to certify with the Commerce Department from 1 August 2016. Companies can apply to register on the Privacy Shield list maintained by the U.S. Department of Commerce and must self certify annually that they meet the data protection requirements of the Privacy Shield.

The Principles apply to Privacy Shield companies immediately on certification; however, acknowledging the fact that the Principles will impact third-party commercial relationships, organisations that certify to the Privacy Shield in the first two months following its effective date must ensure that existing third-party commercial relationships conform with the Accountability for Onward Transfer Principle within nine months from the date that they certify to the Privacy Shield at the latest. During the interim period, where organisations transfer personal data to third parties, they shall apply the Notice and Choice Principles, and, where personal data are transferred to third parties acting as agents, ascertain that the agent is obliged to provide at least the same level of protection as is required by the Principles.

The Commission will also publish guidance for citizens explaining the remedies available to individuals who feel that their personal data have been used in breach of the relevant data protection rules.

Comment

It is hoped that adoption of the Privacy Shield will resolve some of the recent uncertainty regarding TransAtlantic personal data flows, which would be a welcome development for many EU- and U.S.-based companies. Now that it is in force the issue for many companies will be whether or not to elect to self-certify. The most likely candidates to sign up over the coming weeks are large technology companies and other data controllers for whom alternative mechanisms are administratively, politically or technologically too challenging to implement. For others, especially smaller sized organizations with lower volumes of international data transfers, there will need to be serious consideration of the cost versus benefit of modifying working practices, policies and procedures, and having to renegotiate third party contracts, to ensure compliance with the enhanced Principles. These steps may require certifying U.S. companies to go well beyond what a typical EU company has to do or that it already has in place. Organizations should now consider and determine if the benefits of the Privacy Shield for their business outweigh its burdens when compared to other options for legitimization. In addition to this, and to ensure that this topic remains open for debate and discussion, the constant threat of a legal challenge as to whether the Privacy Shield goes actually far enough to protect the personal data of European citizens, remains.

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
 
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.