Major Court Ruling Could Immediately Stop Data Transfers Between US And Europe

The European Court of Justice is set to decide whether or not the Safe Harbor agreement will be revoked. The agreement allows companies in Europe to easily transfer personal data to United States without having to seek approval each time.

The agreement was signed into force in the year 2000, and it is essential for companies like Facebook, Google, and Microsoft to function successfully. The European court will decide if the agreement was able to protect the private data of European citizens once the data reached the United States.

Companies from the United States that conduct business in Europe promise to protect personal data when they agree to Safe Harbor. They act as though the data is still located in Europe, where laws regarding data protection and privacy are stronger.

However, with widespread leaks about government spying, critics have stated that the agreement is basically meaningless. Many people allege that the United States government obtained personal data from European citizens through the Safe Harbor program and companies like Facebook.

The CEO of Facebook Mark Zuckerberg has denied giving any information about European citizens to the government of the United States.

However, many people believe that the protections offered by Safe Harbor are not adequate.

EU advocate general Yves Bot stated in his opinion, “The Safe Harbor scheme… does not contain any appropriate guarantees for preventing mass and generalized access to the transferred data.”

Officials from the United States claim that Bot’s statement is inaccurate.

Regardless of the outcome of Tuesday’s court decision, major companies in the United States will most certainly be affected, but it won’t be anything catastrophic.

Major companies of the United States that are operating in Europe are not going to suddenly shut down or stop working in Europe, as they generally have separate legal contracts regarding data protection laws that would enable them to continuing operating even if Safe Harbor falls apart.

However, the long term futures of these companies in Europe might become somewhat unclear.

Representatives from Facebook, Microsoft, and Google have not commented on the issue.

Many experts are stating that a breakdown of Safe Harbor would lead to “uncharted territory”.

Dutch member of the European Parliament Sophie in ‘t Veld stated, “If indeed Safe Harbor is declared invalid, companies will be in breach of EU law when they are in transferring data. Some sort of arrangement will have to put in place very quickly, and it really makes you wonder as we have done over the years why the Commission hasn’t acted sooner.”

In’t Veld says that she believes the European Commission would immediately react on a ruling if Safe Harbor were to be abolished. In such an event, data transfers between the United States and Europe would immediately cease.

Brussels-based lawyer at Covington & Burling Monika Kuschewsky says that the situation is a “headache” for companies in both the United States and Europe.

She stated, “If (the court) realized what consequences it would have and in other cases where it has declared Commission instruments invalid, it’s always taken into account the effect this would have on the stakeholders.”

While the immediate effect on businesses in unclear, it could be awhile before everything settles down.

The United States Federal Trade Commission is particularly concerned about the potential suspension of the Safe Harbor program.

FTC Commissioner Julie Brill stated, “(Suspending the program) will be taking away a privacy-protecting solution, and not addressing the underlying issue of government surveillance.”

The European Court of Justice will announce its ruling early on Tuesday.

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