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Idealistic musings about eDiscovery
Those few words were all it took for the European Union Court of Justice (ECJ) to shoot down the “Safe Harbor” data agreement between the US and EU on October 6. To paraphrase the prolix paragraph that preceded those four words, the ECJ ruled that the Safe Harbor agreement notwithstanding, each EU nation still retained its power to review claims of personal breaches of data privacy rights; thus, the agreement has no effect.
From Hogan Lovells:
Safe Harbor was jointly devised by the European Commission and the U.S. Department of Commerce as a framework that would allow US-based organisations [sic] to overcome the restrictions on transfers of personal data from the EU. Following a dispute between Austrian law student Max Schrems and the Irish Data Protection Commissioner, the [ECJ] was asked to consider whether a data protection supervisory authority was bound by the European Commission’s decision that Safe Harbor provided an adequate level of protection for European data.
Eric Levy summarized the fact situation nicely:
Schrems, an Austrian citizen and a Facebook user since 2008, alleged that Facebook should not be allowed to transfer the personal information of it subscribers from its Irish servers to servers in the US. In the light of revelations made in 2013 by Edward Snowden concerning the activities of United States intelligence services like the NSA, Schrems contended that the law and practices of the United States, including Safe Harbor, offered no real protection against surveillance by the United States of personal data transferred to that country. On October 6, 2015 the ECJ agreed with him.
The New York Times has also written a tight, more complete version of the back story.
According to Hogan Lovells, supra, the death of Safe Harbor means:
- Transfers of personal data from the EU to the US currently covered by Safe Harbor will be unlawful unless they are suitably authorized by data protection authorities or fit within one of the legal exemptions.
- Multinationals relying on Safe Harbor as an intra-group compliance tool to legitimize data transfers from EU subsidiaries to their US parent company or other US-based entities within their corporate group will need to implement an alternative mechanism.
- US-based service providers certified under Safe Harbor to receive data from European customers will need to provide alternative guarantees for those customers to be able to engage their services lawfully.
So, instead of a single EU-wide privacy benchmark to apply when companies send foreign citizens’ personal data back to the US, each EU country can now apply its own standards for data privacy. This is likely to mean that some EU countries will suspend transfer of their citizens’ data to the US altogether.
During discovery, US judges had already shown a rather dismissive attitude toward foreign data privacy rights, so long as that data might prove discoverable in the US court. “I don’t care how hard it might be for you to get that data,” some judges had said, “that’s not my problem. It’s your case, and your data, so do it or face sanctions.” Huron Consulting had summarized:
Thus, U.S. courts where a lawsuit is filed and where the parties have appeared are likely to enforce U.S. rules of procedure regarding requests for discovery of information housed overseas, yet the countries where the information is housed may sanction parties who produce information protected by the privacy rules or without complying with the Hague Convention.
That was the best-case scenario under Safe Harbor. Now, the 28 EU nations previously bound by the agreement are free to apply their own data privacy rules to information housed in computers within their borders.
There is no “effective date” specified in the ECJ’s ruling, implying that Safe Harbor is dead as of now. However, Norton Rose Fulbright suggested prior to the ruling that panic is unnecessary:
If the ECJ finds that [Member State Data Protection Authorities (DPAs)] have the authority to make their own determinations as to whether certain types of transfers under the Safe Harbor are valid, there would be no immediate legal effect on the legality of transfers relying on the Safe Harbor. The Irish proceedings that gave rise to Schrems would continue, and other complaints would likely be filed to seek review by the Irish and other DPAs. While these proceedings could ultimately lead to data transfers being found invalid, this process would take months or years. Meanwhile, the European Commission would have more time to reach a new Safe Harbor agreement with the US, offering the DPAs an opportunity to find that the enhanced framework addresses their concerns.
If you have pending litigation involving electronic data that you thought your clients produced in compliance with their Safe Harbor certification, do your own research and reconsider your collection and production strategies in light of the meager guidance provided by the ECJ and in the references quoted here.
This is gonna get interesting.