The Broken Shield: Top EU Court Restricts EU-US Data Transfers

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In a landmark decision on 16th July, the European Court of Justice (“ECJ”), the EU’s highest court, has ruled that transfers of personal data from the EU to the US using the Privacy Shield mechanism are invalid. The ECJ also confirmed that while in principle the use of the EU’s standard contractual clauses (“SCCs”), also known as the ‘Model Clauses’, remains valid, supervisory authorities have an obligation to suspend or prohibit transfers of personal data to third countries (such as the US) where the laws of that country make it impossible to provide the privacy protections that the mechanism is supposed to ensure.

What are the facts of the case?

Max Schrems is an Austrian lawyer and privacy activist who won a case in 2015 (“Schrems I”) which overturned the EU’s decision to approve the use of the Safe Harbour regime to transfer personal data from the EU to the US. Mr Schrems brought the complaint in light of the allegations by Edward Snowden concerning the alleged use of mass surveillance techniques which, Mr Schrems argued, compromised the privacy of EU individuals.

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