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Court to Decide If Privacy Is a Basic Business Requirement for Global Data Transfers


In one of the most highly anticipated international court cases on data protection, the Court of Justice of the European Union (CJEU) early Thursday morning (U.S. time) will decide whether the current means of transferring data between the U.S. and the EU adequately protect privacy and fundamental rights.

The court’s ruling is likely to impact the Privacy Shield deal with the U.S. government and standard contractual clauses on data transfers with U.S. companies. Privacy Shield was created in 2016, partially in response to revelations of widespread American snooping by whistleblower Edward Snowden, which showed that EU data was not safe in the U.S.

If the court invalidates current data transfer methods, Facebook and other major U.S. companies that operate overseas will have to find alternative mechanisms to rely on, but it’s not yet clear which alternatives will work or satisfy European standards. In the short term, hundreds of billions of dollars in digital trade could fall into legal limbo, and a long-running dispute between the EU and the U.S. over fears about intrusive American surveillance could balloon into a crisis. In the long term, such a ruling would force big tech companies to accept that privacy is a basic business requirement for transatlantic trade.

If, however, the CJEU decides that current data transfer methods are adequate, big tech companies will take that as a signal that they can continue business as usual. It also could undermine real progress on privacy being made around the U.S. at the state level – and will not bring any improvements whatsoever to the privacy protections for American consumers.

In either event, big tech companies will continue to seek control over our personal data, including by pushing into “trade” agreements binding rules that undermine existing digital privacy standards and undercut government efforts to enact new ones. A recent example of this is the “digital trade” chapter in the new North American Free Trade Agreement, which took effect on July 1.

Burcu Kilic, digital rights program director for Public Citizen, will be available to comment on the court’s decision. She can discuss how privacy and data protections are essential for building consumer trust online and how protections in one country are rendered ineffective if data is transmitted across borders without them.

Please contact Public Citizen’s press office to speak with her.