European and US legislators have hammered out a last-minute deal to allow data flows across the Atlantic to continue without breaking the law.
"For the first time ever, the United States has given the EU binding assurances that the access of public authorities for national security purposes will be subject to clear limitations, safeguards and oversight mechanisms," said Europe's justice commissioner Věra Jourová.
"Also for the first time, EU citizens will benefit from redress mechanisms in this area. In the context of the negotiations for this agreement, the US has assured that it does not conduct mass or indiscriminate surveillance of Europeans. We have established an annual joint review in order to closely monitor the implementation of these commitments."
Under the terms of the new deal, which has yet to be ratified by EU members, the US will give an annual written commitment that it won't indulge in mass surveillance of EU citizens, and this will be audited by both sides once a year.
US companies wishing to import EU citizens' data must give "robust obligations on how personal data is processed," and comply to the same standards as European data protection laws. If EU citizens want to complain about how their data is being used, companies must respond within a deadline and at no cost to the complainant.
Commissioner Jourová and her colleague Andrus Ansip, VP for the Digital Single Market on the European Commission, will now put together an "adequacy decision" containing the new rules for member states to ratify. The US will also continue to get its regulatory framework fixed to accommodate the new agreement.
"Our people can be sure that their personal data is fully protected. Our businesses, especially the smallest ones, have the legal certainty they need to develop their activities across the Atlantic," said Ansip.
"We have a duty to check and we will closely monitor the new arrangement to make sure it keeps delivering. Today's decision helps us build a Digital Single Market in the EU, a trusted and dynamic online environment; it further strengthens our close partnership with the US. We will work now to put it in place as soon as possible."
Three months of frantic rewriting
The so-called Privacy Shield deal replaces the Safe Harbor agreement that stood for more than 15 years before being struck down by a court in October. It's the result of three months of frantic and sometimes fraught negotiations between the two trade blocks, with tech firms in both zones pushing hard for a deal.
National data protection authorities (DPAs) will now spend the next few days hammering out the details. There may still be some individual sticking points, but the need for action is moving Europe's usually ponderous regulators more quickly than usual, thanks to industry pressure.
"We ask Europe's DPAs to view this signal from the European Commission as a sign of good faith and to hold off with any potential enforcement action until the new agreement has been fully implemented," said John Higgins, director general of industry pressure group DigitalEurope.
"While they are assessing the replacement for Safe Harbour, we urge Europe's DPAs to continue to honour the use of other transfer mechanisms, such as binding corporate rules (BCRs) and model contract clauses (MCCs), so that data transfers to the US can continue unimpeded."
But there are already questions being raised about the new deal. The language used in the official announcement is woolly at best and there are fears that the deal struck may be too broad for some to swallow.
"The results of months' worth of negotiation appears weak, and if adopted we are likely to see further legal challenge in the European courts," said Ashley Winton, UK head of data protection and privacy at lawyers Paul Hastings LLP.
"The European Commission still needs to make the case that the US system of privacy laws are essentially equivalent, that data subjects have real rights against disproportionate processing in the US, and that if there is disproportionate or illegal processing then citizens can have their personal data deleted and ultimately redress in an appropriate court."
Certainly the language seems rather open. The US commitments not to indulge in mass surveillance need to be clarified, since in the NSA's dictionary it's not surveillance if they collect masses of information online and store it, but only if an analyst actually looks at it.
"With all due respect, but a couple of letters by the outgoing Obama administration is by no means a legal basis to guarantee the fundamental rights of 500 million European users in the long run, when there is explicit US law allowing mass surveillance," said Max Schrems, the Austrian student who brought down the Safe Harbor agreement in a case against Facebook.
"We don't know the exact legal structure yet, but this could amount to obviously disregarding the Court's judgement. The Court has clearly stated that the US has to 'ensure' proper protection by means of 'domestic law or international commitments.' I doubt that a European can walk to a US court and claim his fundamental rights based on a letter by someone."
He pointed out that the agreement could also come unstuck thanks to the NSA's PRISM scheme, which allows the intelligence agencies to tap into the data flows for partners like Google, Microsoft, Facebook or Apple. This would appear to break the agreement, he opined, and the courts are certain to get involved.
There's also the issue of legal workarounds. Microsoft is currently fighting the US Department of Justice over the agency's claims that it can subpoena data on European servers without a warrant. Last month, Microsoft president Brad Smith warned that 90 per cent of European data would be up for grabs if it loses its case against the authorities. ®