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Double Trouble for Data Transfers Post-Brexit and Post-Schrems II?

On 16 July 2020, Europe’s highest court, the CJEU, ruled in Data Protection Commissioner v. Facebook Ireland Limited, Maximillian Schrems that individuals in Europe had insufficient redress against US bulk interception rules when their personal data was transferred to the United States under the US Department of Commerce “Privacy Shield” mechanism. This ruling followed a long running campaign by the activist, Max Schrems, who’s prior case to the CJEU invalidated the predecessor to the Privacy Shield, the Safe Harbor.

It is a general tenet of European data protection law that, when personal data is exported from the European Union, any further processing must be to European standards unless the local data protection laws are considered “adequate” by the European Commission. Self-certification under the US Privacy Shield mechanism was a popular method for providing adequate data protection amongst US based service providers which had European customers and regularly needed to transfer personal data from Europe to the United States.

Schrems II impacts not only the over 5,300 US companies that enjoyed Privacy Shield self-certification, but also the many thousands of EU and US companies that rely upon US companies in their supply chain for data processing. This supply chain could include outsourcing, cloud services, data processing, data storage, telecommunications and the like.

Click here to read the full article, and many more in our latest International News: Focus on Global Privacy and Cybersecurity.




Safe Harbor Update: House Votes to Pass Judicial Redress Act

The Judicial Redress Act of 2015 (H.R. 1428) (Judicial Redress Act) is on its way to the U.S. Senate. On October 20th, the U.S. House of Representatives voted in favor of passage.

The Judicial Redress Act extends certain privacy rights under the Privacy Act of 1974 (Privacy Act) to citizens of the EU and other specified countries.

The preamble to the Judicial Redress Act states that:

The Judicial Redress Act provides citizens of covered foreign countries with the ability to bring suit in Federal district court for certain Privacy Act violations by the Federal Government related to the sharing of law enforcement information between the United States and a covered foreign government. Any such lawsuit is subject to the same terms and conditions that apply to U.S. citizens and lawful permanent residents who seek redress against the Federal Government under the Privacy Act. Under current law, only U.S. citizens and lawful permanent residents may bring claims against the Federal Government pursuant to the Privacy Act despite the fact that many countries provide U.S. citizens with the ability to seek redress in their courts when their privacy rights are violated. Enactment of this legislation is necessary in order to promote and maintain law enforcement cooperation and information sharing between foreign governments and the United States and to complete negotiations of the Data Protection and Privacy Agreement with the European Union.”

The House’s passage of the Judicial Redress Act is expected to help mitigate one of the key criticisms of U.S. privacy protection from EU regulators. As discussed in our blog posts from earlier this month, in the Court of Justice of the European Union (CJEU) decision invalidating the U.S.-EU Safe Harbor Program, the CJEU noted that EU residents lack an “administrative or judicial means of redress enabling, in particular, the data relating to them to be accessed and, as the case may be, rectified or erased.”  Once passed by the Senate (as is generally expected), the Judicial Redress Act will provide that means of redress.

Check back for updates on the Senate’s consideration of the Judicial Redress Act and the ongoing EU-US negotiations about a Safe Harbor Sequel.




Safe Harbor Update: Safe Harbor Sequel Coming Soon?

As we wrote on October 6, 2015, the Court of Justice of the European Union (CJEU) announced its invalidation of the U.S.-EU Safe Harbor program as a legally valid pathway for transferring personal data of European Union (EU) residents from the EU to the United States. An avalanche of reports, analyses and predictions followed the CJEU announcement because so many U.S. businesses operating in the EU relied on the validity of the Safe Harbor program.

As we expected, the CJEU decision was not the final chapter. On October 16, the Article 29 Working Party on the Protection of Individuals with Regard to the Processing of Personal Data (the Working Party, an independent advisory board to data protection authorities in EU members states) called on the EU member states to “open discussions with the US” to find a viable alternative to the Safe Harbor program.

Echoing the CJEU’s concern about “massive and indiscriminate surveillance” by the U.S. government, the Working Party challenged the United States and EU to produce by 31 January 2016, a new data transfer framework with “stronger guarantees” of EU residents’ “fundamental rights” to data privacy, as well as “redress mechanisms” for violations.

In the meantime, the Working Party affirmed that data transfers formerly validated by the Safe Harbor program are not legal. It also noted its intent to evaluate the validity of the two other key data EU-U.S. transfer pathways: Binding Corporate Rules (BCRs) and Standard Contractual Clauses.

What This Means for U.S. Businesses

While waiting for news of Safe Harbor: The Sequel, our Privacy and Data Protection Group continues to advise a business that relied on the Safe Harbor program to:

  1. Classify the data transferred from the EU to the United States (employee, consumer, business contacts, etc.).
  2. Determine which of the data transfers from the EU to the United States were formerly validated by Safe Harbor.
  3. Identify vendors that transfer EU personal data for the business and determine how those vendors validate their transfers (e.g., Did a vendor represent that it could make legitimate transfers via Safe Harbor, and, if so, what happens now?).
  4. Decide how best to address EU to U.S. personal data transfers under one of the other data transfer pathways based on data classification (e.g., Binding Corporate Rules for intra-company transfers; Standard Contractual Clauses for transfers to third parties that do not otherwise meet EU requirements; or consent of each EU data subject—an impractical option for high-volume transfers).

Stay tuned for more on Safe Harbor: The Sequel and guidance for businesses.




The Highest Court in the European Union Strikes Down the Data Retention Directive as Invalid

In a significant move, the Court of Justice of the European Union (CJEU) has ruled that the Data Retention Directive 2006/24/EC (Directive) is invalid. This decision is expected to have wide-reaching implications for privacy laws across the European Union.

On 8 April 2014, the CJEU held that the requirement imposed on internet service providers (ISP) and telecom companies to retain data for up to two years “entails a wide-ranging and particularly serious interference with [the] fundamental rights [to respect for private life and communications and to the protection of personal data] in the legal order of the EU, without such an interference being precisely circumscribed by provisions to ensure that it is actually limited to what is strictly necessary.”

The Directive

The Directive is a product of heightened security concerns in the aftermath of terrorist attacks around the world. It facilitated almost unqualified access by national authorities to the data collected by communications providers for the purpose of organised crime and terrorism prevention, investigation detection and prosecution. To enable this access, obligations were imposed on communications providers to retain certain data for between six months and two years.

The Ruling

Specifically, communications providers were required to retain traffic and location data as well as data necessary to identify users. It did not, however, permit the retention of communication content or of the information consulted by the user.

The CJEU found that the retained data revealed a phenomenal amount of information about individuals and their private lives. The data enabled the identification of persons with whom the user has communicated and by what means; the time and place of communication; and the frequency of communications with certain persons during a given period. From this data, a very clear picture could be formed of the private lives of users, including their daily habits, permanent or temporary places of residence, daily or other movement, activities carried out, social relationships and the social environments frequented.

The CJEU accepted the retention of data for use by national authorities for the legitimate objective of national security, however opined that the Directive went further than necessary to fulfil those objectives violating the proportionality principle.

It delineated five main concerns:

  1. Generality – The Directive applies to all individuals and electronic communications without exception.
  2. No Objective Criteria – The Directive did not stipulate any objective criteria and procedures with which national authorities should comply in order to access the data.
  3. No Proportionality of Retention Period – The minimum retention period of six months failed to provide for categories of data to be distinguished or for the possible utility of the data vis-à-vis the objectives pursued. Further, the Directive did not provide any objective criteria by which to determine the data retention period which would be strictly necessary according to the circumstances.
  4. Insufficient Safeguards – The Directive fails to provide sufficient safeguards against abuse and unlawful access and use of the data.
  5. Data may leave the EU – There is no requirement to retain the data in the EU [...]

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