On July 7, the Court of Justice of the European Union (ECJ) invalidated the EU-US Privacy Shield framework in its ruling in Data Protection Commissioner v. Facebook Ireland and Maximillian Schrems (Case C-311/18). More than 5,000 organizations in the United States have certified their adherence to this framework, and have relied on it to receive personal data from organizations in the EU in compliance with the General Data Protection Regulation (GDPR) since 2016. The framework was a joint effort between the US Department of Commerce and the European Commission and Swiss Administration to provide companies on both sides of the Atlantic with a mechanism to comply with data protection requirements when transferring personal data from the European Union and Switzerland to the United States in support of transatlantic commerce. The Department of Commerce released the following statement:
The United States shares the values of rule of law and protection of our democracies with our partners in the European Union (EU). Therefore, we are deeply disappointed that the Court of Justice of the European Union (“ECJ”) has invalidated the EU-U.S. Privacy Shield framework. The United States is reviewing this outcome and the consequences and implications for more than 5,300 European and U.S. companies, representing millions of transatlantic jobs and over $7.1 trillion in commercial transactions.
The United States and the EU have a shared interest in protecting individual privacy and ensuring the continuity of commercial data transfers. Uninterrupted data flows are essential to economic growth and innovation, for companies of all sizes and in every sector, which is particularly crucial now as both our economies recover from the effects of the COVID-19 pandemic. This decision directly impacts both European companies doing business in the United States as well as American companies, of which over 70 percent are small and medium enterprises. The United States will continue to work closely with the EU to find a mechanism to enable the essential unimpeded commercial transfer of data from the EU to the United States.