European Parliament Suspends E.U.-U.S. Privacy Shield

Last week the European Parliament voted to suspend the Privacy Shield Framework unless it is fully compliant by September 1, 2018. The non-binding resolution was passed 303 to 223 votes, with 29 abstentions.

The Privacy Shield became effective in 2016 and replaced the less restrictive E.U.-U.S. Safe Harbor. It was designed by the U.S. Department of Commerce and the European Commission to provide for the transfer of personal data from the E.U. to U.S. companies that have promised to comply with European data protection standards and best practice requirements.

For the past two years, the Privacy Shield has been roundly criticized in the E.U. for providing an inadequate level of protection.

The chair of the E.U. Parliament’s Civil Liberties Committee stated, “[t]his resolution makes clear that the Privacy Shield in its current form does not provide the adequate level of protection required by E.U. data protection law and the E.U. Charter. Progress has been made to improve on the Safe Harbor agreement but this is insufficient to ensure the legal certainty required for the transfer of personal data. The law is clear and, as set out in the GDPR, if the agreement is not adequate, and if the U.S. authorities fail to comply with its terms, then it must be suspended until they do.”

The resolution is non-binding. The European Commission can choose to disregard it. However, there can be no doubt that the European Parliament does not believe that the Privacy Shield provides an adequate level of protection. Nor can there be any doubt that, despite recent state and federal efforts to step-up privacy and data security protections, the E.U. does not trust self-certification or the U.S. government.

A lot of businesses that thought they were all set with a legal transfer mechanism may be out of luck. The E.U. will not be satisfied until there exists a GDPR equivalent at the federal level.

Richard B. Newman is a regulatory litigation, investigations and compliance attorney at Hinch Newman LLP focusing on advertising and digital media matters. 

Informational purposes only. Not legal advice. Always seek the advice of an attorney. Previous case results do not guarantee similar future result. Hinch Newman LLP | 40 Wall St., 35th Floor, New York, NY 10005 | (212) 756-8777.

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