EU–US Privacy Shield

The EU–US Privacy Shield was a framework for regulating transatlantic exchanges of personal data for commercial purposes between the European Union and the United States.[1] One of its purposes was to enable US companies to more easily receive personal data from EU entities under EU privacy laws meant to protect European Union citizens.[2] The EU–US Privacy Shield was a replacement for the International Safe Harbor Privacy Principles, which were declared invalid by the European Court of Justice in October 2015.[3] The ECJ declared the EU–US Privacy Shield invalid on 16 July 2020 (see Legal challenge below).[4]

History
Main article: International Safe Harbor Privacy Principles

In October 2015 the European Court of Justice declared the previous framework called the International Safe Harbor Privacy Principles invalid in a ruling that later became known as "Schrems I".[3] Soon after this decision the European Commission and the U.S. Government started talks about a new framework and on February 2, 2016 they reached a political agreement.[1] The European Commission published the "adequacy decision" draft, declaring principles to be equivalent to the protections offered by EU law.[5]

The Article 29 Data Protection Working Party delivered an opinion on April 13, 2016, stating that the Privacy Shield offers major improvements compared to the Safe Harbor decisions, but that three major points of concern still remain. They relate to deletion of data, collection of massive amounts of data, and clarification of the new Ombudsperson mechanism.[6] The European Data Protection Supervisor issued an opinion on 30 May 2016 in which he stated that "the Privacy Shield, as it stands, is not robust enough to withstand future legal scrutiny before the [European] Court".[7]

On 8 July 2016 EU member states' representatives (article 31 committee) approved the final version of the EU-U.S. Privacy Shield, paving the way for the adoption of the decision by the commission.[8] The European Commission adopted the framework on 12 July 2016 and it went into effect the same day.[9][10]

U.S. President Donald Trump signed an executive order entitled "Enhancing Public Safety" which states that U.S. privacy protections will not be extended beyond US citizens or residents:

Agencies shall, to the extent consistent with applicable law, ensure that their privacy policies exclude persons who are not United States citizens or lawful permanent residents from the protections of the Privacy Act regarding personally identifiable information.[11]

The European Commission has stated that:

The US Privacy Act has never offered data protection rights to Europeans. The Commission negotiated two additional instruments to ensure that EU citizens’ data is duly protected when transferred to the US:

  • The EU–U.S. Privacy Shield, which does not rely on the protections under the US Privacy Act.
  • The EU–US Umbrella Agreement, which enters into force on 1 February (2017). To finalize this agreement, the US Congress adopted a new law in 2017, the US Judicial Redress Act,[12] which extends the benefits of the US Privacy Act to Europeans and gives them access to US courts."[13]

The commission said it will "continue to monitor the implementation of both instruments".[13]

Response

German MEP Jan Philipp Albrecht and campaigner Max Schrems criticized the new ruling, with the latter predicting that the commission might be taking a "round-trip to Luxembourg" (where the European Court of Justice (CJEU) is located).[14] Many Europeans demanded a mechanism for individual European citizens to lodge complaints over the use of their data, as well as a transparency scheme to assure that European citizens' data does not fall into the hands of U.S intelligence agencies.[15]

The Privacy Shield has been challenged legally by privacy groups.[16][17] As of November 2016, it is not clear whether the cases will be considered admissible.[18][19]

As of February 2017 the future of the Privacy Shield was contested. One consultant, Matt Allison, predicted that "The EU's citizen-driven, regulated model will swiftly come into conflict with the market forces of the US and the UK."[20] Allison summarized a new paper in which the European Commission lays out its plans for adequacy decisions and global strategy.[21]

As of December 2019, an opinion had been published that might influence the CJEU decision. It outlined various scenarios that may result from the conflict in regimes. The author concluded that the opinion "should generate equal measures of relief and alarm for the U.S. government and for companies dependent on data transfers. A final judgment from the CJEU, which may or may not follow the advocate general’s recommendations, is expected in a few months."[22]

A final CJEU decision was published on 16 July 2020 in a ruling called "Schrems II".[23][24] The EU-US Privacy Shield for data sharing was struck down by the European Court of Justice on the grounds it did not provide adequate protections to EU citizens on government snooping.[4]

The ruling does not stop data transfers between the EU and US as the court upheld the use of "standard contractual clauses", allowing specific consent for such transfers.[25]

A decision regarding the impact of Brexit on Privacy Shield is expected by 31 December 2020 which may be moot due to the CJEU decision.[26]

Swiss-US Privacy Shield

Switzerland is not an EU member but follows many EU policies through treaty implementations. Accordingly, it has implemented its own version of the Privacy Shield framework through its own Swiss-US Privacy Shield. It is largely similar to the EU-US Privacy Shield framework, but implements its own DPA instead of various EU DPAs. It also has no grace period and several other meaningful differences to the definition of "sensitive data," binding arbitration, and changes to privacy policies.[27] The EU-US and Swiss-US programs are adequately similar that they are administered together by the United States.[28]

See also

References
  1. European Commission - Press release: political agreement on framework
  2. "The new transatlantic data "Privacy Shield"". The Economist. ISSN 0013-0613. Retrieved 2016-03-26.
  3. Vera Jourová, "Commissioner Jourová's remarks on Safe Harbour EU Court of Justice judgement before the Committee on Civil Liberties, Justice and Home Affairs (LIBE)", 26 October 2015
  4. "EU-US Privacy Shield for data struck down by court". BBC News. 16 July 2020. Retrieved 17 July 2020.
  5. "5 things you need to know about the EU-U.S. Privacy Shield agreement". PCWorld. 29 February 2016. Retrieved 2016-03-26.
  6. Chapter 5 of Opinion 01/2016 on the EU – U.S. Privacy Shield draft adequacy decision, the Article 29 Data Protection Working Party
  7. European Data Protection Supervisor, Privacy Shield: more robust and sustainable solution needed, 30 May 2016
  8. Statement by European Commission Vice-President Ansip and Commissioner Jourová, Adoption by Member States of the EU-U.S. Privacy Shield, 8 July 2016
  9. European Commission - Press release: launch privacy shield
  10. Privacy Shield adequacy decision
  11. Executive Order: Enhancing Public Safety in the Interior of the United States, Section 14, 25 January 2017, accessed 27 March 2017
  12. Public Law 114-126, 24 February 2016
  13. Muncaster, P., Trump Order Sparks Privacy Shield Fears, InfoSecurity Magazine, accessed 27 March 2017
  14. Max Schrems: "EU US Privacy Shield" (Safe Harbor 1.1) "European Commission may be issuing a round-trip to Luxembourg" 16:45 (2nd Feb. 2016), PDF retrieved 3rd Feb. 2016
  15. Lomas, Natasha. "EU-US Data Transfers Won't Be Blocked While Privacy Shield Details Are Hammered Out, Says WP29". TechCrunch. Retrieved 2016-02-03.
  16. Case T-670/16, Digital Rights Ireland v the commission, 16 Sep 2016
  17. Case T-738/16, La Quadrature du Net and Others v. the Commission, 25 Oct 2016
  18. Reuters article EU-U.S. personal data pact faces second legal challenge from privacy groups, 2 Nov 2016
  19. Case information on T-738/16 at Curia
  20. Allison, Matt. "A Template for Adequacy: EU Pitches for Data Protection Gold Standard, Feb 09, 2017". CircleID. Retrieved 2017-02-14.
  21. "Exchanging and Protecting Personal Data in a Globalised World", 10.1.2017, COM(2017) 7 final". European Commission. Retrieved 2017-02-14.
  22. Propp, Kenneth (24 December 2019). "European Court of Justice Opinion Clouds Future of Transatlantic Commercial Data Transfers, December 24, 2019". Lawfare. Retrieved December 27, 2019.
  23. "The Court of Justice invalidates Decision 2016/1250 on the adequacy of the protection provided by the EU-US Data Protection Shield" (PDF). Court of Justice of the European Union. 16 July 2020. Press Release No 91/20. Retrieved 17 July 2020.
  24. "Search - Case number C-311/18". InfoCuria. 16 July 2020. Retrieved 17 July 2020.
  25. Hern, Alex (16 July 2020). "Tech firms like Facebook must restrict data sent from EU to US, court rules". The Guardian. Retrieved 17 July 2020.
  26. https://www.adlawaccess.com/2020/02/articles/what-does-brexit-mean-for-privacy-shield/
  27. https://www.whitecase.com/publications/article/swiss-us-privacy-shield-key-similarities-key-distinctions-eu-us-approach
  28. https://www.privacyshield.gov/Program-Overview
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