Unfortunately, I hadn’t had the time to address the ruling of the CJEU issue last October, by which the ‘Safe Harbour’ scheme, enabling transatlantic transfers of data from the EU to the US, was deemed invalid.
However, due to its importance, and because this blog is primarily intended to be about privacy and data protection, it would be shameful to finish the year without addressing the issue.
As you may be well aware, article 25(1) of Directive 95/46 establishes that the transfer of personal data from an EU Member State to a third country may occur provided that the latter ensures an adequate level of protection. According to article 25(6) of the abovementioned Directive, the EU Commission may find that a third country ensures an adequate level of protection (i.e., a level of protection of fundamental rights essentially equivalent to that guaranteed within the EU under the directive read in the light of the Charter of Fundamental Rights) by reason of its domestic law or of its international commitments.
Thus said, the EU Commission adopted its Decision 2000/520, by which it concluded that the “Safe Harbour Principles” issued by the US Department of Commerce ensure an adequate level of protection for personal data transferred from the EU to companies established in the US.
Accordingly, under this framework, Facebook has been transferring the data provided by its users residing in the EU from its subsidiary in Ireland to its servers located in the US, for further processing.
These transfers and, unavoidably, the Decision had been challenged by the reference to the CJEU (judgment in Case C-362/14) following the complaint filed by Max Schrems, a Facebook user, before the Irish DPA and subsequently before the Irish High Court. The main argument was that, considering the access electronic communications conducted by its public authorities, the US did not ensure adequate protection of the thus transferred personal data.
According to the AG’s opinion, “the access enjoyed by the United States intelligence services to the transferred data constitutes an interference with the right to respect for private life and the right to protection of personal data”.
Despite considering that a third country cannot be required to ensure a level of protection identical to that guaranteed in the EU, the CJEU considered that the decision fails to comply with the requirements established in Article 25(6) of Directive and that the Commission did not make a proper finding of adequacy but merely examined the safe harbour scheme.
The facts that the scheme’s ambit is restricted to adhering US companies, thus excluding public authorities, and that national security, public interest and law enforcement requirements, to which US companies are also bound, prevail over the safe harbour principles, were deemed particularly decisive in the assessment of the scheme’s validity.
In practice, this would amount to enable the US authorities to access the personal data transferred from the EU to the US and process it in a way incompatible with the purposes for which it was transferred, beyond what was strictly necessary and proportionate to the protection of national security.
As a result, the Court concluded that enabling public authorities to have access on a generalised basis to the content of electronic communications must be regarded as compromising the essence of the fundamental right to respect for private life.
The Court stated that the decision disregards the existence of such negative interference on fundamental rights, and that the lack of provision of limitations and effective legal protections violates the fundamental right to effective judicial protection.
Upon issuance of this ruling, the Art29WP met and concluded that data transfers from the EU to the US could no longer be legitimized by the ‘Safe Harbor’ decision and, if occurring, would be unlawful.
While its practical implications remain unclear, the ruling undoubtedly means that companies relying on the ‘Safe Harbor’ framework for the transfer of personal data from the EU to the US need to rely, instead, on another basis.
In this regard, considering that not all Member States accept the consent of the data subject or an adequacy self-assessment as a legitimizing legal ground for such cross-border transfers, Model Contractual Clauses incorporated into contracts and Binding Corporate Rules (BCR) for intragroup transfers seem to be the most reliable alternatives in certain cases.
Restrictions on data transfers are obviously also foreseen in the GDPR, which, besides BCRs, Standard Contracts and adequacy decisions, includes new data transfer mechanisms such as certification schemes.
You can find the complete version of the ruling here.