Friday

16th Nov 2018

Opinion

Safe Harbour invalidation puts EU data in quarantine

The decision by the European Court of Justice (ECJ) on 6 October to invalidate the US-EU Safe Harbour Framework is the Smoot-Hawley tariff bill of the digital age.

Smoot-Hawley was the infamous American law in 1930 that hiked US tariffs and precipitated an international tariff war that contributed to the Great Depression.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

  • On 6 October the European Court of Justice declared the 15-year-old Safe Harbour data-sharing pact invalid (Photo: *n3wjack's world in pixels)

This is not to suggest that the ECJ itself was motivated by protectionism. The court has a history of strict application of the European Charter of Fundamental Rights and previously invalidated European legislation requiring telecommunications providers to retain data for three years so it can be available for government investigations.

In the Safe Harbour case, the court faulted the European Commission for failing to address US government surveillance even though the 1995 Data Protection Directive and other EU instruments themselves have exceptions for national security.

The impact of the decision, though, amounts to a quarantine of European data, and means the companies that depend on transatlantic data flows might as well be paying tariffs on transfers of data.

This effect is a stark contrast to the announcement on 5 October of a Trans-Pacific Partnership trade agreement among Asian nations and the US.

The nearly 5,000 companies that subscribe to the Safe Harbour framework now need new data transfer mechanisms.  This is not an easy overnight transition.

Separate evaluations of data flows

Unless the EU and US agree on a new framework rapidly, companies will have to evaluate separately the legality of each kind of data flow and choose from a menu that includes new contract provisions, revised privacy policies and business practices, reconfiguring networks, and applying to data protection authorities for approval of organisational rules for data protection and for approval of certain transfers.

They will need to do all of this without impairing service to customers – and with the prospect that many of these solutions will be challenged.

In the days after the decision, literally thousands of lawyers and privacy officers rushed to take part in webinars, seminars, and conference calls, producing hundreds of questions about what to do in response to the court’s decision.

Answering all these questions will take time and money, introducing new friction and costs into transatlantic data flows.

In turn, the data protection authorities that the ECJ has empowered to exercise authority over international transfers will be inundated with new proceedings and requests to approve alternative data transfer mechanisms.

The court has opened the floodgates.

In the meantime, transatlantic data flows have not ceased, putting thousands of companies into a position where they might be accused of non-compliance with European data protection law for doing what until 6 October was lawful.

The Article 29 Working Party, a committee of all EU data protection authorities, have a contentious two-day meeting along with the commission in an effort to prevent 28 or more different ways of treating international transfers of data.

These regulators gave an end-of-January deadline to iron out new mechanisms for transatlantic data transfers, whether these involve various provisions of the existing data protection directive or a new, strengthened Safe Harbour agreement with the United States.

Seize the initiative

This means the Commission cannot temporise over this new framework. The elements of an agreement are in place, and it needs urgently to seize the initiative so that the rules for data transfers are clear and do not lurch back and forth.

In the wake of the ECJ decision, Commission vice-president Timmermans and justice commissioner Jourová acknowledged the importance of maintaining transatlantic data flows, with the latter saying “they are the backbone of our economy.”

Fifty percent of the world’s GDP and about one-third of its trade flows between the United States and Europe.

These trade flows are supported by increasing flows of digital information in many sectors, for transactions, supply chain management, logistics, customer relations and workforce management.

At a time when the US and EU are seeking to reduce impediments to trade, the backbone of the European economy is far too important to be the object of quarantine and virtual tariffs.

Cameron F. Kerry was General Counsel and Acting Secretary of the US Department of Commerce from 2009-2013, and was the chief US interlocutor with the EU on data protection and the Safe Harbour agreement. He is currently Senior Counsel at Sidley Austin LLP

The EU-US data deal that isn't

The lack of any legal documents and content on the new transatlantic data transfer agreement is raising doubts about the deal struck on Tuesday.

EU gives thumbs up to US data pact

Commission gives 'thumbs-up' to controversial Privacy Shield deal with US on data sharing after a year's operation - but notes room for improvement.

EU imposes deadline for new US data pact

The European Commission is using the European Court of Justice ruling on Safe Harbour as a leverage to get a new deal with American authorities.

EU and US agree data 'Privacy Shield'

A new transatlantic agreement replaces the Safe Harbour deal with what the Commission says are increased guarantees for the protection of Europeans' personal data.

News in Brief

  1. US warns EU banks and firms against trading with Iran
  2. Merkel urged Romania not to move embassy to Jerusalem
  3. Protesters call for Czech leader to step down
  4. Former German chancellor labelled 'enemy' of Ukraine
  5. French lead opposition to Brexit deal on fisheries
  6. Private accounts of Danske Bank employees investigated
  7. UK's May defends Brexit deal to MPs, after ministers resign
  8. Brexit MP calls for 'no confidence' vote on May

Why 'Spitzenkandidat' is probably here to stay

The power of the parliament to 'appoint' the president of the EU Commission is new, highly-contested - and not universally understood. In fact, even some of the lead candidates to replace Jean-Claude Juncker are against it.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSTheresa May: “We will not be turning our backs on the Nordic region”
  2. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  3. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  4. NORDIC COUNCIL OF MINISTERSState of the Nordic Region presented in Brussels
  5. NORDIC COUNCIL OF MINISTERSThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  6. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  7. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  8. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  9. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  10. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  11. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  12. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs

Latest News

  1. Brexit dominates EU affairs This WEEK
  2. How the EU commission got tunnel vision on self-driving cars
  3. No-confidence calls against May put Brexit deal in doubt
  4. Key points of the Brexit deal (if it ever comes into effect)
  5. Romania heaps scorn on 'revolting' EU criticism
  6. US steps in to clean up Cyprus
  7. 'Decisive progress' on Brexit as British cabinet backs deal
  8. Asylum for Macedonia's ex-PM puts Orban on spot

Stakeholders' Highlights

  1. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  2. International Partnership for Human RightsCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  3. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  4. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  5. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  6. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  7. Mission of China to the EUChina: Work Together for a Better Globalisation
  8. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  9. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  10. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  11. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network
  12. Mission of China to the EUChina-EU Economic and Trade Relations Enjoy a Bright Future

Join EUobserver

Support quality EU news

Join us