Daily Management Review

Final Hurdle Cleared for EU-U.S. Commercial Data Transfer Pact


Final Hurdle Cleared for EU-U.S. Commercial Data Transfer Pact
EU governments gave the green light to a commercial data transfer pact provisionally agreed by the EU executive and the United States in February. This approval would pave the way for it to come into effect next week, said the European Commission.
On concerns about intrusive U.S. surveillance, the EU's top court had struck down the previous data transfer framework, Safe Harbour, and the introduction of the new agreement should end months of legal limbo for companies such as Google, Facebook and MasterCard.
Sources said that while there were abstentions from Austria, Slovenia, Bulgaria and Croatia, representatives of European Union member states mostly voted in favor of the EU-U.S. Privacy Shield. The pact does not go far enough to secure their citizens' privacy, says Austria and Slovenia voicing their concerns about the agreement.
By facilitating cross-border data transfers that are crucial to international business, the new framework will underpin over $250 billion dollars of transatlantic trade in digital services annually.
"Today member states have given their strong support to the EU-U.S. Privacy Shield, the renewed safe framework for transatlantic data flows," Commission Vice-President Andrus Ansip and Justice Commissioner Vera Jourova said in a statement.
The Privacy Shield would be formally adopted by the Commission, the EU executive, on Tuesday.
By way of giving EU citizens greater means to seek redress in case of disputes, the Privacy Shield seeks to strengthen the protection of Europeans whose data is moved to U.S. servers.
By stating they complied with European privacy standards when storing information on U.S. servers, both U.S. and European firms to get around tough EU data transferral rules using the Safe Harbour agreement for 15 years.
In addition to lucrative data used for targeted online advertising, which is of particular importance to technology companies, cross-border data transfers by businesses include payroll and human resources information.
Saying it would restore trust in data transfers between the EU and United States, industry group DIGITALEUROPE which represents Apple, Google and IBM, among others, expressed relief at Friday's vote.
"Our members are ready to implement the new framework and meet the compliance challenge that the strengthened provisions demand from companies,” said John Higgins, director general of the group.
After the Court of Justice of the European Union in October declared it invalid because it did not sufficiently protect Europeans' data from U.S. snooping, Brussels and Washington intensified negotiations to hammer out a replacement for Safe Harbour.
Political outrage in Europe was caused and mistrust of big U.S. tech companies was stocked by revelations three years ago from former U.S. intelligence contractor Edward Snowden of mass U.S. surveillance practices.
"It (the Privacy Shield) is fundamentally different from the old Safe Harbour: It imposes clear and strong obligations on companies handling the data and makes sure that these rules are followed and enforced in practice," Ansip and Jourova said.
While ruling out indiscriminate mass surveillance of Europeans' data, the United States will create an ombudsman within the State Department to field complaints from EU citizens about U.S. spying.
Citing concerns with the leeway they said it left for the United States to collect data in bulk, the EU data protection authorities in April demanded that the framework be improved.

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