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The Validity of EU-U.S. Personal Data Export Tools: A Pending Issue

Posted in EU Data Protection, Legislation

Between the cancellation of the Safe Harbor by the Court of Justice of the European Union (CJEU) and the adoption of the Privacy Shield, a number of data exporters have relied on the Standard Contractual Clauses (SCC) as the safest export tool to transfer personal data from the EU to the U.S. But as announced in our previous blog posts, the validity of the SCC and the Privacy Shield had to pass the EU legal test as regard to the fundamental right to data protection.

Indeed, while the Privacy Shield is facing an action for annulment brought by Digital Right Ireland to the CJEU, it is now the turn of the SCC to be examined in the context of a request filed by Maximilian Schrems against Facebook Ireland Limited to the Irish data protection authority (DPA). This last case has been submitted by the DPA to the Irish High Court, which is now assessing the opportunity to refer the question to the CJEU.

On May 24, 2016, the Irish DPA issued a draft decision summarizing its concerns about the validity of the SCC. It is worth noting that this was a turning point for the Irish DPA: the former Irish Commissioner, Billy Hawkes, defended the Safe Harbor against Maximilian Schrems and some other DPAs, whereas the new Irish Commissioner Helen Dixon basically defends the opposite, despite some improvements in U.S. laws and the SCC that occurred after the cancellation of the Safe Harbor. This might be the sign of an evolution due to the entry into force of the EU General Data Protection Regulation, the new strong and unified piece of data protection legislation that will apply from May 2018.

The main concern of the Irish DPA about the use of the SCC is the absence of an effective court’s remedy in the U.S. legislation for EU citizens to enforce their right to data protection where it might be a risk that personal data is processed by U.S. State agencies for national security purposes. Indeed, even if an EU citizen meets the criteria for a remedy against surveillance under the U.S. Foreign Intelligence Security Act, it appears on foot of the U.S. court’s decisions they cannot sue the U.S. government.

Concerning the Privacy Shield, it is too soon to know if it will survive the new U.S. political era. As observed with the dead Safe Harbor, strong voices start to express themselves opposing the industry and the EU and U.S. Privacy Shield negotiators (pro) to the EU civil society and some members of the EU Parliament and DPAs (contra).

The key issue finally lies in the ability for the U.S. legislation to grant data subjects with enforceable data protection rights that EU authorities and courts would find at least equivalent to those granted by the EU. The two above-mentioned legal cases, as well as the economic stakes of EU-U.S. data flows should put a strong pressure on U.S. government to provide additional guarantees.

For more information on the future of the Privacy Shield and SCC, please refer to the following prior Password Protected blog posts:

Expected Soon: Modifications of the Standard Contractual Clauses

Is the Privacy Shield Viable? Article 29 Working Party Proposes to Wait for Its Final Verdict

New Threat to Transatlantic Personal Data Transfers: Possible Invalidation of Standard Contractual Clauses

WP 29 Expresses Concerns About EU-U.S. Privacy Shield