European data sharing pact with U.S. declared invalid

LUXEMBOURG (AP) – Facebook and thousands of other companies could find it vastly more complicated to do business in Europe after a court ruled that personal data sent to U.S. servers is potentially unsafe from government spying.

Some 4,500 companies have long been able to store users’ personal data – everything from status updates and photos to personal information like bank details and home addresses – where they see fit, often in the U.S.

That could change after Europe’s top court on Tuesday declared invalid a 15-year-old pact allowing the unfettered transfer of personal data outside the European Union’s 28 countries.

The case was brought by an Austrian law student in the wake of revelations by former U.S. National Security Agency contractor Edward Snowden of the extent of the NSA’s surveillance programs.

Max Schrems complained that U.S. law doesn’t offer sufficient protection against surveillance of data transferred by Facebook to servers in the United States.

The verdict could have far-reaching implications for companies operating in Europe.

It does not mean companies have to immediately stop transferring data to the U.S. Rather, it opens up the possibility that European regulators will be inundated by complaints by consumers who do not want their data stored in the U.S. That would make it hugely difficult for companies to do business.

“The message is clear – that mass surveillance is not possible and against fundamental rights in Europe,” said Schrems after the ruling.

Companies, he added, “cannot just aid foreign spies and get away with it because they fall under European jurisdiction.”

The so-called “safe harbor” agreement has allowed companies to send data on users from the EU to U.S. since 2000. That includes information on how users behave online, such as what pages they visit and where they spend money. But also email addresses, passwords, bank details and payroll figures. It does not include the content of emails, however.

Since its creation, the agreement has helped Internet businesses such as social media. Facebook and Google, for example, earn money from advertising that relies on data on how users behave on the Internet.

But the revelations of NSA spying have provoked a backlash from European consumers and governments.

In a separate case, for example, Google is being forced to consider Europeans’ requests to delete from its search results links to content that they find offensive or inappropriate.

The European Commission, the EU’s executive branch, has tried to revise the “safe harbor” agreement over the past two years and expects Tuesday’s ruling will support that effort.

“Today’s judgment is an important step toward upholding Europeans’ fundamental rights to data protection,” said European Commission Vice President Frans Timmermans. “In the light of the ruling we will continue this work toward a renewed and safe framework for the transfer of personal data across the Atlantic.”

In Washington, White House spokesman Josh Earnest said there are concerns about the economic consequences of the ruling, which is being reviewed.

“We are disappointed that the court has struck down an agreement that since 2000 has proved to be critical in protecting both privacy and fostering economic growth in the United States and the European Union,” Earnest said.