EU approves data transfer pact with the US despite privacy row

Brussels — The European Commission announced on Monday a data transfer agreement with the US after Europe’s top court annulled two previous pacts that underpinned how thousands of companies transfer Europeans’ personal data across the Atlantic.

The move was immediately criticised by Austrian privacy activist Max Schrems’ European Centre for Digital Rights (NOYB) group, which said it will challenge the agreement.

The commission and the US had been struggling to reach a new agreement after Europe's top court annulled two previous pacts that underpinned the transfer of personal data across the Atlantic for services ranging from cloud infrastructure to payroll and banking.

The EU executive said measures taken by the US ensured an adequate level of protection for Europeans’ personal data transferred across the Atlantic for commercial use.

It said new binding safeguards, such as that limiting US intelligence services’ access to EU data to what is “necessary and proportionate” and the setting up of a Data Protection Review Court for Europeans, address all concerns raised by Europe’s top court.

US President Joe Biden welcomed the data transfer pact and said it reflected a “joint commitment to strong data privacy protections”.

“The new EU-US data privacy framework will ensure safe data flows for Europeans and bring legal certainty to companies on both sides of the Atlantic,” commission president Ursula von der Leyen said in a statement.

EU justice chief Didier Reynders said he was confident of fending off any legal challenge.

“The principles of the data privacy framework are solid, and I am convinced that we have made significant progress which meets the requirements of the European Court of Justice case law,” he told a news conference. “I am very confident of fighting, defending the new data agreement.”

But Schrems said the latest revision was inadequate.

“Just announcing that something is ‘new’, ‘robust’ or ‘effective’ does not cut it before the Court of Justice. We would need changes in US surveillance law to make this work — and we simply don't have it,” he said in a statement.

“We have various options for a challenge already in the drawer, though we are sick and tired of this legal ping-pong. We currently expect this to be back at the Court of Justice by the beginning of next year,” Schrems said.

Lobbying group DigitalEurope, whose members include Airbus, Amazon, Apple, Ericsson, Nokia, Philips and Samsung, welcomed the deal.

“Data flows underpin the EU’s annual €1-trillion of service exports to the US, and this decision will give companies more confidence to conduct business and help our economies to grow,” said its director-general, Cecilia Bonefeld-Dahl.

Earlier this year, EU privacy watchdog the European Data Protection Board’s said the latest data agreement still falls short and urged the commission to do more to protect Europeans’ privacy rights.

Europe’s top court scuppered the previous two deals after challenges by Schrems because of concerns about US intelligence agencies accessing Europeans’ private data. 

Update: July 10 2023
This story has been updated with Biden’s comment and new information.

Reuters