Privacy activists mount court challenge to EU-US data pact

The group refused to comment on the case, and court documents revealed little of the substance, but unnamed sources told Reuters news agency that it concerned the new EU-US Privacy Shield agreement.

The deal replaces a 15-year-old agreement that had been invalidated by the same Luxembourg-based court only last year. Some 4,000 US firms had signed up to the old pact, known as Safe Harbour.

A European Commission spokesperson told Reuters that it was "convinced that the Privacy Shield will live up to the requirements set out by the European Court of Justice (ECJ) which has been the basis for the negotiations".

Privacy Shield underpins some €230 billion in cross-border trade in digital services. It is also designed to ensure rights of EU citizens are respected whenever their data is transferred to firms based in the United States.

The commission says the latest agreement is more transparent, better monitored, and allows EU nationals to file complaints with greater ease. US companies that sign up to the self-certifying agreement promise not to abuse the data.

US national security access

But outstanding issues over US national security access and bulk collection of data remain in Privacy Shield despite "written commitments and assurances" by US authorities.

Earlier this month Reuters revealed that Yahoo had received US government orders under a foreign spy law in 2015 to secretly scan emails belonging to hundreds of millions of users.

Those scans were being conducted when the EU commission and US authorities were still in talks on US national security access for the new data transfer pact.

Yahoo described the Reuters report as "misleading". The commission said Yahoo had not signed up to Privacy Shield.

Social media giant Facebook signed up to Privacy Shield earlier this month.

It was the initial legal challenge by Austrian privacy campaigner Max Schrems against Facebook's Dublin-based headquarters tha helped trigger the demise of Privacy Shield's predecessor Safe Harbour.

Earlier this year he told reporters Privacy Shield wouldn't survive a legal challenge at the ECJ.

“The European Commission is jumping from one ice-floe to another. It knows it will sink sooner or later, but keeps jumping in the meantime," he said.