Antitrust Law Daily Wrap Up, PRIVACY NEWS: EU, U.S. agree on new protections for personal data; industry applauds, (Feb 3, 2016)

By Brian Hammond,TR Daily

Negotiators from the European Union and the United States have reached an agreement on a new framework for handling transatlantic data flows to replace the “Safe Harbor” agreement that was overturned by the European Court of Justice last year, adding further protections on the use of European consumers’ personal data by U.S. companies.

The so-called EU-US Privacy Shield agreement addresses the flaws the European court found in the Safe Harbor pact, the European Commission said. In addition to stronger obligations on U.S. companies to protect Europeans’ personal data, the new agreement also includes tougher monitoring and enforcement by the FTC and the U.S. Department of Commerce, it added.

EC Vice President Andrus Ansip called the agreement a “strong framework” on data flows. “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,” he said. “We have a duty to check and we will closely monitor the new arrangement to make sure it keeps delivering.”

Mr. Ansip added that the agreement would help move the European Digital Single Market forward and “further strengthens our close partnership with the U.S. We will work now to put it in place as soon as possible.”

Specifically, the new arrangement requires that U.S. companies wishing to import personal data from Europe will need to commit to “robust obligations on how personal data is processed and individual rights are guaranteed,” according to details released by the EC. The Commerce Department will monitor that companies publish their commitments, making them enforceable under U.S. law by the FTC, the EC added. In addition, any company handling human resources data from Europe will have to commit to complying with decisions by European data protection authorities.

The agreement also includes safeguards and transparency obligations on government access to data. “For the first time, the U.S. has given the EU written assurances that the access of public authorities for law enforcement and national security will be subject to clear limitations, safeguards and oversight mechanisms,” the EC said. “These exceptions must be used only to the extent necessary and proportionate.”

“The U.S. has ruled out indiscriminate mass surveillance on the personal data transferred to the U.S. under the new arrangement,” the commission added. The agreement also provides for an annual joint review by the EC and Commerce.

“We are pleased the U.S. and European Commission officials have reached an agreement in principle which, once finalized, will allow for the continuation of an important mechanism for transatlantic data transfers,” FTC Chairwoman Edith Ramirez remarked. “Under the new agreement, the EU-U.S Privacy Shield, the Federal Trade Commission will continue to prioritize enforcement of the framework as part of our broader commitment to protect consumers’ personal information and privacy. We will continue to work closely with our European partners to ensure consumer privacy is protected on both sides of the Atlantic.

The agreement was applauded by U.S. industry groups.

“We welcome the agreement, which will provide strong privacy safeguards for consumers and legal certainty for the thousands of companies that depend on transatlantic data flows,” stated Christian Borggreen, international policy director at the Computer & Communications Industry Association. “We call on European Data Protection Authorities to endorse this new and strengthened framework and give time for Safe Harbour companies to transition. We also urge that existing commercial data transfer mechanisms remain viable.”

Daniel Castro, vice president at the Information Technology and Innovation Foundation, commented, “We commend U.S. and European negotiators for completing an agreement that avoids disrupting the transatlantic digital economy in the near term by ensuring continuity for the thousands of U.S. and European companies providing services across the two markets.”

“In the wake of the Snowden disclosures, European citizens and policymakers are understandably concerned about privacy safeguards in U.S. law, but abruptly revoking the Safe Harbor agreement was the wrong way to address those concerns,” Mr. Castro added. “We are pleased that U.S. and European policymakers have resolved this issue and support the free flow of data between these two markets. We hope the new agreement signifies a line of thinking that will shape future EU policy decisions as well.”

News: Privacy FederalTradeCommissionNews