The recent "safe harbor” verdict poses new challenges to online companies. In the ruling, the European Court of Justice declared that a data-sharing deal between the EU and the US is invalid. Data from EU users will now enjoy additional protections.
European data protection standards are supposed to apply when data from European users is stored on US servers. According to the landmark European Court of Justice "Safe Harbor” ruling, this isn’t always ensured. The EU and U.S. now have until the end of January to agree on new guidelines. For smaller companies in particular, the cost of meeting any new guidelines may be steep, especially if they are forced to use more expensive data-storage solutions within the EU.