The transatlantic Safe Harbour agreement lets US companies use a single standard for consumer privacy and data storage in both the US and Europe. The European Court of Justice has declared that the mass transfer of EU user data to the US contradicts EU data protection laws and represents a breach of the fundamental right to privacy. The EU law requires that companies exporting citizens personal data do so only to countries providing a similar level of legal protection for that particular data.
The ruling against the 15-year-old Safe Harbour law threatens the business models of more than 3000 companies that use it to ship data to the US, including Google, Apple, Microsoft and Facebook. Thus, such companies may now face scrutiny from individual European countries data regulators and could be forced to host European user data in Europe, rather than hosting it in the US and transferring it over, according to uk.businessinsider.com. For example, Apple’s new privacy policy explicitly states that personal data collected for its iCloud service in the European Economic Area is shipped to Apple Inc in the US for processing via Cork in Ireland.
The development is said to stretch US-EU relations, which are already misaligned over the right to be forgotten and net neutrality. “The gap between American and European legislation on privacy is at breaking point,” says Mark Skilton of the Warwick Business School in Coventry, UK, cited by newscientist.com.
The ruling comes after privacy advocate Max Schrems brought a case against Facebook in Ireland. He said his privacy had been violated by the NSAs mass-surveillance programs, first revealed by Edward Snowden. Schrems is Austrian, but he brought the case against Facebook in Ireland, as Facebooks European headquarters are in Dublin.
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