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New data safeguard, say EU, USA

July 12, 2016

A new transatlantic deal on data sharing has been agreed, according to EU and US officials. Europe's top court had blocked the previous "Safe Harbor" pact, citing a lack of privacy safeguards for EU citizens.

Belgien Vera Jourova und Penny Pritzker in Brüssel
Image: Getty Images/AFP/T. Charlier

EU Justice Commissioner Vera Jourova said on Tuesday that the replacement pact "Privacy Shield" deal would bring "easier redress for individuals in case of complaint."

Data protection campaigners are expected to again go the European Court of Justice in Luxembourg to challenge the new pact on the grounds that it still fails to protect EU citizens.

Jourova and US Commerce Secretary Penny Pritzker announced at a joint press conference in Brussels that the new accord would take effect immediately. It would impose stricter rules to safeguard personal data and end months of legal limbo for American firms such as Apple, Facebook, Mastercard and Google, they said.

One planned measure is the creation of an ombudsman complaints mediation service in the United States.

Employers welcome deal

"The approval of the Privacy Shield is a milestone for privacy at a time when the sharing of data is driving growth in every sector, from advanced manufacturing to advertising," said Pritzker. "For businesses, the free flow of data makes it possible for a startup in Silicon Valley to hire programmers in the Czech Republic, or a manufacturer in Germany to collaborate with a research lab in Tennessee."

The new deal was welcomed by the European employers' federation BusinessEurope, which said that it created legal certainty.

Months of legal limbo

Last October, the EU's top court struck down "Safe Harbor" on the grounds that it did not fully safeguarded the rights of EU citizens. This followed multiple revelations of mass electronic spying by US intelligence agencies.

Until that invalidation ruling, more than 4,000 firms had conducted transatlantic business using "Safe Harbor" as a legal framework to share data.

Companies within the EU are only supposed to share personal data with recipients abroad whose privacy protections are comparable to those within the bloc.

Responding to Tuesday's announcement, the European consumer organization BEUC said the new redress mechanisms and "the overall value and structure of the whole system remain as messy and complex as ever."

"The shield is cracked beyond repair and is unlikely to stand scrutiny by the European Court of Justice," said BEUC spokeswoman Monique Goyens .

'Little more' than an upgrade

Max Schrems, the Austrian law student and activist who lodged last year's complaint, said the new arrangement was "miles away from what the Court of Justice had demanded."

"It is little more than a little upgrade to Safe Harbor," Schrems said. "It is very likely to fail again ... This deal is bad for users, which will not enjoy proper privacy protections and bad for businesses, which have to deal with a legally unstable solution," he said.

Prtzker and Jourova said they were confident the new deal would prevail if it encountered any court challenges.

ipj/msh (Reuters, AP, dpa)