European Court Strikes Down Data Sharing Safe Harbour Between The United States And The EU: What's The Impact For Canada?

Author:Ms Paige Backman and Donald B. Johnston
Profession:Aird & Berlis LLP

In a strongly worded decision, Europe's highest court yesterday struck down the Safe Harbor accord enabling transatlantic data transfers between the United States and the European Union. The European Court of Justice ("ECJ") ruled that United States' Safe Harbour scheme fails in two fundamental ways: first, it fails to provide an adequate level of protection for EU citizens' data; and, second, it offers EU citizens no judicial means of redress in the United States and denies EU data protection authorities the power to review complaints challenging the va¬lidity of the data transfers to third-party countries. The impact of this decision has the potential to be far reaching.

Of great significance is the ECJ's ruling that, in determining whether another jurisdiction's scheme affords adequate protection under EU data protection laws (thereby permitting data transfers), one must look not simply at the proposed scheme, but also at the domestic laws and international commitments of the juris¬diction in question to determine whether in totality the jurisdiction in question affords a level of protection of fundamental rights equivalent to that guaranteed within the EU. The ECJ concluded that legislation per¬mitting public authorities to have access on a generalized basis to the content of electronic communica¬tions must be regarded as compromising the essence of the fundamental right to respect for private life.

"National security, public interest and law enforcement requirements of the United States prevail over the safe harbor scheme, so that United States undertakings are bound to disregard, without limitation, the protective rules laid down by that scheme where they conflict with such requirements," the ECJ said. "The United States safe harbor scheme thus enables interference, by United States public authorities, with the fundamental rights of persons, and the Commission decision does not refer either to the existence, in the United States, of rules intended to limit any such interference or to the existence of effective legal...

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