ZNGA Zynga Inc

BRUSSELS—The advocate general at Europe's highest court on Wednesday said a data-transfer pact between the European Union and the U.S., known as Safe Harbor, was invalid and that a national authority has the power to suspend data transfers to the U.S. if it found EU citizens' data wasn't adequately protected there.

While nonbinding on the court, the opinion given by Yves Bot, the European Court of Justice's advocate general, deals a blow to thousands of companies operating on both sides of the Atlantic abiding by the framework.

"Because the surveillance carried out by the United States is mass, indiscriminate surveillance…in those circumstances, a third country cannot in any event be regarded as ensuring an adequate level of protection," which is a right under EU law, Mr. Bot said.

"Given such findings… the European Commission ought to have suspended the application of the (Safe Harbor) decision, even though it is currently conducting negotiations with the United States in order to put an end to the shortcomings found," Mr. Bot said.

The advocate general's opinion in the highly publicized case comes as Washington and Brussels work to update the 15-year-old agreement used by a vast majority of American tech firms, from Apple Inc. to Zynga Inc. The pact allows U.S. companies to handle European personal data—such as payroll information and employee contact information—as long as the firms annually self-certify that they abide by Europe's stricter privacy laws.

Some EU lawmakers and privacy activists have called for the pact in its current form to be thrown out following revelations of widespread U.S. spying by National Security Agency contractor Edward Snowden. In the wake of the revelations, the commission—the EU's executive arm—demanded changes to the framework and has for nearly two years been negotiating an update.

Mr. Bot also said that if national supervisory authority finds that a transfer of data undermines the protection of EU citizens' data, it has the power to suspend that transfer, regardless of any assessment made by the commission when agreeing to a data-transfer pact.

Write to Natalia Drozdiak at natalia.drozdiak@wsj.com and Sam Schechner at sam.schechner@wsj.com

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(END) Dow Jones Newswires

September 23, 2015 05:55 ET (09:55 GMT)

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