European data privacy agencies may be set to reject a treaty between the EU and the US on data privacy, a move that could cost Irish companies dearly.
According to leaked documents published by German data protection authorities, Europe’s most influential privacy regulators are to say that the so-called ‘Privacy Shield’ accord agreed by the EU and the US falls short of standards set by the European Court of Justice.
The group of data privacy regulators said that it is “not yet in a position to confirm that the current draft adequacy decision does, indeed, ensure a level of protection that is essentially equivalent to that in the EU”.
If data privacy authorities do not accept the new transatlantic agreement, it could mean that some data flows between EU and US companies would be classed as illegal under European law. Earlier this year, US multinational companies in Ireland warned that a failure to produce an agreement would threaten jobs in Ireland.
While the data authorities can not immediately block the agreement from coming into existence, legal experts say that a subsequent challenge in the European Court Of Justice is regarded as having a good chance of succeeding.
The objection to the agreement comes after Microsoft became the first multinational firm to endorse Privacy Shield.
Last year, the European Court Of Justice nullified the long-standing EU-US ‘Safe Harbour’ data transfer treaty because it found that indiscriminate surveillance by US authorities of EU citizens’ data contravened fundamental European rights.
The ruling was the result of a case brought by Austrian student Max Schrems against Facebook’s Irish office.
Mr Schrems argued that revelations by the whistleblower Edward Snowden about US security agencies routinely spying on Europeans’ emails and messages meant that the transfer of EU citizens’ personal data to the US jurisdiction must not be allowed under European law.
The ruling caused a political and legal stand-off that threatened transatlantic trade and resulted in a new agreement called Privacy Shield.
The European Commission has said that the new agreement provides for more transparency and oversight for Europeans and gives “certainty” to businesses here that transatlantic data flows would not fall foul of EU law. Under the new deal, an “independent” ombudsman would be set up to deal with cases of suspected abuse by US authorities.
“This protects the fundamental human rights of Europeans and… lives up to the [principles set by the] European Court of Justice,” said Vera Jourova, the European Union’s Commissioner for Justice, Consumers and Gender Equality.
“It will provide a strong and safe framework for the future of transatlantic data flows.”
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