EU Bolsters Data Privacy—Strikes Down Privacy Shield Agreement between the European Union and the United States

In an interesting turn of events, Europe's highest court struck down the Privacy Shield Agreement between the European Union and the United States as reported by CNN Business on July 16, 2020. About 5,000 companies, including Facebook that relied on the Privacy Shield pact for transferring information across borders, are now left in the lurch with this decision.

In other words, thousands of companies would now have to figure out alternate methods to transfer data from Europe to the United States following the court’s ruling that has rendered the existing transatlantic agreement insufficient for the protection of European citizens' data from US surveillance.

What does this mean for India?

For the time being, the court has kept other agreements that can be used between Europe and the rest of the world intact. However, it would bode well for India to note that the standard clauses found in international contracts are only valid if the country receiving the data has protections in force that are on par with those under EU law—something security experts say even the US does not have.

The Backdrop of the Decision

The stringent ruling emanates from a seven-year legal battle brought initially against Facebook (FB) and the Irish Data Protection Commission by privacy advocate Max Schrems. According to Schrems, the Privacy Shield did not properly protect EU citizens' data from US surveillance practices.

Comment from Facebook 

As reported by CNN Business, Facebook associate general counsel Eva Nagle has welcomed the ruling to keep the standard contractual clauses in effect for certain countries. She mentioned that the company is carefully considering the findings and implications of the decision of the Court of Justice concerning the use of Privacy Shield and is looking forward to regulatory guidance in this regard. Nagle also said the company is making efforts to ensure their customers, advertisers, and partners can continue to make use of Facebook services while keeping their data safe and secure.