US-EU Agreement on Data Transfer Pact

The United States and the European Union have announced that they have an “in principle” agreement in place to create a new framework for the purpose of cross-border data transfers.

Overview:

  • This announcement has come as a much-needed relief for various tech giants like Google and Meta.
  • For more than a year, officials have been planning out a deal with the aim to replace the invalidated Privacy Shield, an arrangement that allows firms to share Europeans’ data with the U.S.

Invalidation of Privacy Shield

In July 2020, the Privacy Shield was invalidated. This struck a blow to the tech companies that were relying on this mechanism for the US-EU data flow. The top court of the EU sided with privacy activist Max Schrems who had argued that the existing framework did not protect the people living in Europe from surveillance of the United States.

About the new agreement

This newly announced framework highlights the commitment towards data protection, privacy, and its related rules. A smooth flow of data between the EU and the US will help in facilitating economic relationships amounting to USD 7.1 trillion. This agreement will also help in enabling the trustworthiness and predictability of data flows across the Atlantic, thus safeguarding the privacy of all individuals.

Respite to the tech companies

This newly announced agreement will offer some respite for the tech companies that were facing legal uncertainty on moving data across the borders after the decision to do away with Privacy Shield was announced. Meta had announced that it might even have to shut down Instagram and Facebook in Europe over the issue of Privacy Shield.

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