Facebook Case Spells Trouble for Data Transfers with Europe
December 19 2019 - 7:25AM
Dow Jones News
By Sam Schechner and Valentina Pop
U.S. companies face potential disruptions in how they handle
European users' information, after an adviser to the European
Union's top court argued that privacy regulators should stop data
transfers to countries that force companies to break the bloc's
privacy laws.
In a nonbinding opinion, Henrik Saugmandsgaard Øe, an advocate
general for the EU's Court of Justice, said judges shouldn't strike
down EU-approved contractual clauses that companies use to comply
with EU privacy laws overseas, offering relief for businesses and
trade groups.
But Mr. Saugmandsgaard Øe then said data-protection authorities
should be obligated to block data transfers when companies can't
comply with those clauses. That could haunt U.S. tech companies
because the case stems from concerns over whether their obligations
under U.S. surveillance laws violate EU privacy protections.
The main plaintiff in the case, privacy activist Max Schrems,
has argued that Facebook Inc. shouldn't be allowed to transfer its
users' data to the U.S., because it could be turned over under
secret government requests.
The recommendation, if followed by the court in a decision
expected next year, could unleash a series of legal challenges for
multinational companies with significant operations in the U.S. and
Europe -- in particular, tech giants like Facebook, Alphabet Inc.'s
Google, Amazon.com Inc. and Apple Inc. In a worst-case scenario, EU
data-protection authorities could order those companies to stop
sending user data to the U.S., a potentially costly shift.
Facebook said it was grateful for the "opinion on these complex
questions" and looks forward to the final decision. The company
didn't specifically address the recommendation that data protection
regulators block certain transfers.
Amazon declined to comment, while Apple and Google didn't
immediately respond to a request for comment.
In a separate case, the Court of Justice decided Thursday that
Airbnb Inc. is an information-society service, rather than a
traditional real-estate broker. That distinction under EU law could
give Airbnb some ammunition in other legal fights it is waging
against what it calls disproportionate regulations, including a
pending case in Paris.
Write to Sam Schechner at sam.schechner@wsj.com and Valentina
Pop at valentina.pop@wsj.com
(END) Dow Jones Newswires
December 19, 2019 07:10 ET (12:10 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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