European Court Strikes Major Blow To Silicon Valley

CREDIT: AP PHOTO/PAUL SAKUMA
CREDIT: AP PHOTO/PAUL SAKUMA

The highest European court invalidated an international trade agreement between the European Union and the United States Tuesday, potentially making it more difficult for tech companies to swap digital data overseas.

In a long-awaited privacy decision, the European Court of Justice struck down the Safe Harbor data-transfer agreement, which allows American-based companies such as Facebook, Amazon, and Google, to collect and use information from users from the 28 countries in the European Union.

The ruling takes effect immediately with many of internationally-operated companies already taking precautions with ready-made exceptions with the EU to delay implementation.

As companies figure out their next move, the ruling gives privacy advocates space to create and enforce stricter rules on the tech companies many European regulators fault for funneling information to U.S. intelligence agencies.

Tech companies resist regulations, regulators try to rein in tech companies.

Privacy regulators across Europe have been looking for ways to rein in tech companies data roving. But tech companies have fervently opposed additional regulations, arguing they could hamper their ability to conduct business and ultimately hurt customers.

For example, Facebook’s European public policy director wrote a column stating that additional requirements would increase costs “and people in Europe would notice new features arriving more slowly, or not at all. The biggest victims would be smaller European companies.”

Also, Google is still fighting against the European Union’s “Right To Be Forgotten” law passed in 2014. The search engine giant said country’s should not be able to dictate what content is online, referencing France’s proposal to amend the law, and require Google to take down contested articles across all European countries’ platforms.

“While the right to be forgotten may now be the law in Europe, it is not the law globally,” said Google’s global privacy counsel Peter Fleischer in a July blog post. “In the end, the Internet would only be as free as the world’s least free place. We believe that no one country should have the authority to control what content someone in a second country can access.” European Union members have ramped up investigations in recent years, and imposed regulations for American tech companies and the U.S. government for potential privacy violations after the National Security Agency’s document leaks made headlines in 2013.

Since then, U.S.-European ties have been strained. French President François Hollande recently said the country would “not tolerate actions that threaten its security and the protection of its interests,” referencing documents that showed the NSA spying on at least three French presidents. Germany unsuccessfully investigated the NSA’s tapping German Chancellor Angela Merkel’s cellphone.

Snowden thinks this is a good thing.

Former NSA contractor and whistleblower Edward Snowden called Tuesday’s decision a privacy victory over government surveillance, saying “We are all safer as a result.”

Although Snowden and other privacy advocates may rejoice over the decision, the turf war over data continues on U.S. soil as lawmakers and law enforcement fight for the right to mine information on email servers located overseas.

What does that mean for U.S. law?

The United States Court of Appeals Second Circuit is poised to make a ruling in the government’s lawsuit against Microsoft for failing the FBI emails stored in Ireland — decision that could have widespread ramifications.

As Gregory T. Nojeim, senior counsel for the Center for Democracy and Technology, a Washington, D.C. advocacy group involved with the case, told the Washington Post earlier this month. “The case will set a precedent that will have a worldwide impact. If U.S. warrants compel U.S. providers to disclose communications stored outside the country, foreign governments will argue that their legal orders work in the United States, including countries that have lousy surveillance laws, or that don’t follow the laws they do have. Welcome to the Wild West.”