The European Union and the US have decided on a new transatlantic data sharing pact. In an announcement on mondayThe European Commission says the new framework should allow information to flow freely between the two places, alleviating risks for social media companies operating there.
The decision comes three years after the EU’s highest court struck down Privacy Shield, a protocol that allowed US-based companies to collect and process data from EU citizens. At the time, the court said that the Privacy Shield did not do enough to keep user data out of the hands of US intelligence agencies. This was a blow to companies like Meta and Amazon, as data collection is an essential part of their businesses.
When this policy was rescinded, companies were forced to comply with EU data transfer policies. Earlier this year, the Irish Data Protection Commission (DPC) hit Meta with a record $1.3 billion fine for its data transfers to the US. In 2021, Luxembourg’s National Data Protection Commission fined Amazon $887 million for its handling of data on EU residents.
The new EU-US data privacy framework. The US should protect companies from facing similar penalties whenever they commit to it. In addition to limiting the amount of data abroad that US intelligence can access, the new framework establishes a Data Protection Review Tribunal (DPRC) that can “independently investigate and resolve complaints,” as well as order the deletion of data.
US companies will also have to comply with a set of privacy obligations, including a requirement to delete personal data “when it is no longer necessary for the purpose for which it was collected.” They must also ensure that these safeguards are in place when this data is shared with third parties.
“The new EU-US data privacy framework. The US will guarantee secure data flows for Europeans and provide legal certainty for companies on both sides of the Atlantic,” says Ursula von der Leyen, President of the European Commission, in a statement. “Following the agreement in principle I reached with President Biden last year, the United States has made unprecedented commitments to establish the new framework.”
Going forward, it is unclear whether this policy will hold up to EU courts, as judges have rejected two previous attempts to establish a new framework. Nick Clegg, Meta’s president of global affairs, responded to the news on Twitter, indicating that the company welcomes the new framework, noting that it will “safeguard the goods and services that people and businesses trust on both sides of the Atlantic.”
