EU Court Strikes Down Transatlantic Data-Transfer Pact
October 06 2015 - 5:50AM
Dow Jones News
LUXEMBOURG—The European Union's highest court on Tuesday struck
down a trans-Atlantic data pact used by thousands of companies to
transfer Europeans' personal data to the U.S.
The decision by the European Court of Justice will affect around
4,500 companies that use the mechanism known as "safe harbor,"
which allows firms to transfer data on everything from payroll
information to company phone books as long as they comply with
Europe's stricter privacy rules.
On Tuesday the ECJ ruled that the EU's data-transfer agreements
with a third country, such as the U.S., can't override national
regulators' powers to suspend it.
"The [European] Commission did not have the competence to
restrict the national supervisory authorities' powers…for those
reasons the court declares the Safe Harbor decision invalid," the
court said in its ruling.
The EU and U.S. have been working for about two years to reform
the data agreement to address Europeans' concerns that their data
isn't safe amid claims of U.S. spying, aggravated by allegations by
former National Security Agency contractor Edward Snowden.
Companies such as Apple Inc. and Facebook Inc., as well as
European companies operating in the U.S. such as German media giant
Bertelsmann SE & Co, have been using the 15-year old framework
to transfer data to the U.S.
Companies have been bracing for such a decision, following a top
court adviser's recent nonbinding recommendation to invalidate the
pact.
Yves Bot, an advocate general at the court, had said the
agreement should be ditched because "mass, indiscriminate
surveillance" by the U.S. suggests that, when Europeans' data flows
there, it isn't sufficiently protected. Europeans' rights to
privacy and protection of personal data are written into EU
law.
The court also adopted Mr. Bot's line in ruling that national
regulators have the power to suspend a transfer of data if they
deem that the transfer violates EU citizens' privacy rights,
regardless of any assessment made by the European Commission when
agreeing to a data-transfer pact with that country.
The court said the Irish supervisory authority is therefore
required to investigate the claims brought by the plaintiff Max
Schrems, an Austrian privacy activist, over the transfer of data by
Facebook.
The European Commission is slated to hold a news conference in
the afternoon in response to the court ruling.
Write to Natalia Drozdiak at natalia.drozdiak@wsj.com
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(END) Dow Jones Newswires
October 06, 2015 05:35 ET (09:35 GMT)
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