Trans-Atlantic Data Pact Struck Down by EU’s Highest Court

Servers inside Facebook’s Prineville Data Center in Oregon.  Photographer: Meg Roussos/Bloomberg

http://www.bloomberg.com/news/articles/2015-10-06/eu-u-s-data-sharing-pact-is-invalid-eu-s-top-court-rules-iff2hpgy

Trans-Atlantic Data Pact Struck Down by EU’s Highest Court
 Stephanie Bodoni
October 6, 2015 — 9:51 AM CEST Updated on October 6, 2015 — 6:48 PM CEST

• Judges say U.S. spies may get access to EU citizens' data
• EU citizens' right to privacy not guaranteed by U.S. rules

A trans-Atlantic pact that potentially allows U.S. spies to get their hands on European citizens’ private data was declared invalid by the EU’s highest court, a ruling that threatens to plunge Internet companies into a legal limbo.

Judges at the European Union’s top court struck down the so-called safe-harbor accord after an Austrian law student complained about how U.S. security services can gain unfettered access to Facebook Inc. customer information sent to the U.S. The ruling affects more than 4,000 companies, ranging from tech giant Google Inc. to cereal maker Kellogg Co.

Austrian privacy activist Max Schrems  Photographer: Christian Bruna/AFP via Getty Images

The 15-year-old agreement, which allows American companies to move commercial data back to the U.S., compromises the privacy of EU citizens and their right to challenge the use of their information, the EU Court of Justice in Luxembourg said Tuesday.

“This judgment is a bombshell,” said Monika Kuschewsky, special counsel at Covington & Burling LLP in Brussels. “The EU’s highest court has pulled the rug under the feet of thousands of companies that have been relying on safe harbor. All these companies are now forced to find an alternative mechanism for their data transfers to the U.S. And, this, basically overnight.”
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