The EU and the US are moving closer to concluding an agreement for data transfers between the two continents. If it comes to an agreement, there will be a replacement for the ruling overturned by Schrems II.
At the State of the Net conference in the U.S., official representatives of the EU and the U.S. told us they believe they are close to a new agreement on legally exchanging data between the continents. Before 2020, a legal framework existed to allow data transfers, the Privacy Shield. In the EU Court of Justice, Schrems II overturned the legal framework.
Max Schrems
The judgment was given the name of the plaintiff, Max Schrems. By the way, the legal framework was overturned for the second time in 2020, which explains the full name. The first legal framework was overturned in 2015 by Schrems I.
In both cases, Schrems denounced practices of social media site Facebook. Namely, Facebook derives huge profits from user data. Data of European residents is only shared with America for those practices.
Meta threat
After a year and a half, there is still no new legal framework. Meta recently reminded Europe of this by threatening to leave Europe if a decision is not made soon. Although Zuckerberg quickly backtracked on that statement by assuring that Meta does not want to say goodbye to Europe at all.
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Just before that came unfortunate news for Google Analytics as well. Indeed, according to the letter of the law, Google Analytics would not be legal to use within the European Union. The Austrian Data Protection Authority was the first to come to that conclusion. The investigation revealed that the data Google Analytics sends to the U.S. falls under the heading of personal data. Exchanging personal data with the U.S. is currently not allowed under European law, putting legitimate use of Analytics at risk.
Uncertain environment
At the conference, representatives from both continents now report that an agreement will come soon. “We absolutely recognize that there has been a lot of instability in data transfers and that companies are currently operating in an uncertain environment,” says Alex Greenstein, Director of the Privacy Shield program.
Regulators are feeling the pressure to speed up negotiations. Accordingly, the agreement will be finalized as soon as possible, Greenstein stressed, “We and our partners in Europe are trying to conclude these negotiations as quickly as possible. We recognize that this has implications for U.S. companies, but also for European companies.”
Sean Heater, senior VP of regulatory affairs for the U.S. Chamber of Commerce, stuck a time frame on the situation and estimates that the new legal framework will be in place by spring. In doing so, he does indicate that he is not participating in the negotiations. But he is convinced that the conflict in Ukraine is accelerating the negotiations, so he dares to say the time frame with certainty anyway.