This agreement allows Europeans to have their personal information stored in the United States.
The deal was announced by President Joe Biden, and European Commission President Ursula von der Leyen during Biden’s visit to Brussels. This happened while Biden was on a European tour in the midst of Russia’s war against Ukraine.
The announcement was welcomed by business groups, who said it would provide relief for thousands of companies, including tech giants such as Google and Facebook that were facing uncertainty about their ability to transfer data between the U.S.A and Europe. Europe has stricter data privacy regulations. Companies use this data for everything online, including purchases, communications, advertising and purchase.
This agreement was reached hours after EU officials had agreed on new digital rules to limit the power of tech giants like Facebook and Google.
Biden stated that “Today, we have agreed to unprecedented data privacy and security protections for our citizens.” “This new arrangement will improve the Privacy Shield framework and promote growth and innovation both in Europe and the United States. It will also help small and large companies compete in the digital economy.
Von der Leyen stated that the agreement will “enable predictable and trusted data flows between the EU, the U.S., and safeguard privacy and civil liberties.”
Alexandre Roure, a CCIA official said that the data covers “any information we voluntarily give or generate when using products and services online.” This includes names, ID numbers, geolocation data, online identifications such as IP addresses, emails, and any other information tech companies use for targeting ads.
The agreement stems from a complaint that Max Schrems (an Austrian lawyer and privacy activist) filed a decade back. He was concerned over how Facebook handled his data after revelations about U.S. government hacking by Edward Snowden, a former U.S. National Security Agency contractor.
The EU’s top court ruled in favor of the Privacy Shield agreement that covered transatlantic data transfers. It was found to be inconsistent with stringent data privacy standards within the 27-nation bloc. Some companies were forced to use stock legal contracts to carry out the transfers while others tried to locate their data or suspend them.
The U.S., EU, and others stated that the agreement addressed concerns raised by the court. The U.S. introduced reforms to strengthen privacy and civil liberties protections for “signals intelligence activities.” This refers to the collection of email and text messages by intelligence agencies.
According to the statement, the U.S. will establish “new safeguards” in order to ensure that signals surveillance activities are proportionate and necessary in pursuit of national security objectives.
This dispute raised the possibility that Facebook might have to overhaulits data centres to ensure European data was not lost in the U.S.
Nick Clegg, head of global affairs at Facebook, tweeted that the new agreement “will keep people connected” and “will help services run.” It will give invaluable certainty to American and European companies of any size, including Meta, which rely on data being transferred quickly and safely.
Google stated that it appreciated the EU’s and U.S. efforts to “safeguard transatlantic information transfers.”
Schrems stated that the latest agreement could be tied up in court because his Vienna-based NOYB group would examine it thoroughly and challenge any violations of EU law.
Schrems stated that customers and businesses are facing more years of uncertainty.
