EU, U.S. agree on data sharing pact

The U.S. and European Union have agreed on new privacy rules protecting data shared across the Atlantic.

The EU-U.S. Privacy Shield, which ensures the protection of personal data shared by companies doing transatlantic business, needed approval after the previous Safe Harbor agreement was ruled invalid by the European Court of Justice in October 2015.

That pact, used by some 4,500 companies, had smoothed transatlantic business with the requirement U.S. companies provide privacy protections equal to those of EU companies. Such data transfer agreements are the lifeblood of large firms. Without them, they cannot share information with European partners or their own European offices.

The market is enormous. In 2014, U.S. digital service exports to Europe were worth $187 billion and imports were worth $110 billion, according to a 2016 report by Daniel Hamilton on the transatlantic economy.

New provisions include improvements in the privacy violation resolution process and the appointment of a new State Department official, an EU-U.S. Privacy Shield Ombudsman to handle any European complaints.

“For businesses, the Framework will facilitate more trade across our borders, more collaboration across the Atlantic and more job-creating investments in our communities,” Commerce Secretary Penny Pritzker said.

Privacy Shield will mean more privacy for consumers, said Dana Simberkoff, compliance and risk officer at software vendor AvePoint. For consumers it means that in many cases they can limit what data they provide, and companies are obligated to use that data only for the purpose for which it was collected, she said.

The European court had ruled previous provisions protecting data stored in the U.S. were inadequate, compared with EU protections.

Those concerns arose in the wake of the revelations from national security documents leaked in 2013 by former National Security Agency contractor Edward Snowden. U.S. businesses have supported the new pact.

Critics argue the Privacy Shield’s improvements do not go far enough.

And the European Court could still decide that the extent of U.S. government surveillance makes the new Privacy Shield inadequate.

“For consumers, the framework will ensure you have access to your favorite online services and the latest technologies while strongly protecting your privacy.” Commerce Secretary Penny Pritzker