EU-U.S. commercial data
transfer pact clears final hurdle
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[July 09, 2016]
By Julia Fioretti
BRUSSELS (Reuters) - A commercial data
transfer pact provisionally agreed by the EU executive and the United
States in February received the green light from EU governments on
Friday, the European Commission said, paving the way for it to come into
effect next week.
Its introduction should end months of legal limbo for companies such as
Google, Facebook and MasterCard after the EU's top court struck down the
previous data transfer framework, Safe Harbour, on concerns about
intrusive U.S. surveillance.
Representatives of European Union member states mostly voted in favor of
the EU-U.S. Privacy Shield, but there were abstentions from Austria,
Slovenia, Bulgaria and Croatia, sources said. Austria and Slovenia have
voiced concerns that the pact does not go far enough to secure their
The new framework will underpin over $250 billion dollars of
transatlantic trade in digital services annually by facilitating
cross-border data transfers that are crucial to international business.
"Today member states have given their strong support to the EU-U.S.
Privacy Shield, the renewed safe framework for transatlantic data
flows," Commission Vice-President Andrus Ansip and Justice Commissioner
Vera Jourova said in a statement.
The Commission, the EU executive, will formally adopt the Privacy Shield
The Privacy Shield seeks to strengthen the protection of Europeans whose
data is moved to U.S. servers by giving EU citizens greater means to
seek redress in case of disputes.
For 15 years Safe Harbour allowed both U.S. and European firms to get
around tough EU data transferral rules by stating they complied with
European privacy standards when storing information on U.S. servers.
Cross-border data transfers by businesses include payroll and human
resources information as well as lucrative data used for targeted online
advertising, which is of particular importance to technology companies.
Industry group DIGITALEUROPE which represents Apple, Google and IBM,
among others, expressed relief at Friday's vote, saying it would restore
trust in data transfers between the EU and United States.
"Our members are ready to implement the new framework and meet the
compliance challenge that the strengthened provisions demand from
companies,” said John Higgins, director general of the group.
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A woman hovers a mouse over the Google and European Union logos in
this April 15, 2015 photo illustration. REUTERS/Dado
Brussels and Washington intensified negotiations to hammer out a replacement for
Safe Harbour after the Court of Justice of the European Union in October
declared it invalid because it did not sufficiently protect Europeans' data from
Revelations three years ago from former U.S. intelligence contractor Edward
Snowden of mass U.S. surveillance practices caused political outrage in Europe
and stoked mistrust of big U.S. tech companies.
"It (the Privacy Shield) is fundamentally different from the old Safe Harbour:
It imposes clear and strong obligations on companies handling the data and makes
sure that these rules are followed and enforced in practice," Ansip and Jourova
The United States will create an ombudsman within the State Department to field
complaints from EU citizens about U.S. spying and has ruled out indiscriminate
mass surveillance of Europeans' data.
EU data protection authorities in April demanded that the framework be improved,
citing concerns with the leeway they said it left for the United States to
collect data in bulk.
(Reporting by Julia Fioretti; editing by Jason Neely and Susan Fenton)
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