20201019 ML Brief
Surprise EU-US data privacy deal announced [@SmartInsights Alert]
Unexpected announcement of new ‘Privacy Shield’ means transatlantic data transfers won’t be stopped
Importance: (For International Marketers)
Recommended source: EU Press release on new Privacy Shield
In a surprise move, which few predicted, the EU and US have hammered out a replacement to the safe harbour agreement, to facilitate transatlantic data transfers. The announcement came late yesterday at an unscheduled press conference. Few expected it. Even fewer thought it would come so soon.
The Safe Harbour data agreement used to facilitate data transfers between the US and Europe for 15 years. It basically was an agreement by the two powers that the other had good enough data privacy laws so it was acceptable to transfer data relating to their citizens.
Safe Harbour was effectively sunk when revelations of mass surveillance by the US government caused the EU to declare that the US protections weren’t strict enough and so ruled the agreement invalid.
This suddenly meant US companies couldn’t take data on EU customers outside of the EU’s borders. There was a grace period as stopping data transfers instantly would mean the sudden shut down of lots of online services. Imagine if Facebook, Twitter, Microsoft and hundreds more services from US-based companies could no longer be accessed from within the EU. However, it meant US companies would have to build data centres within the EU and comply with all EU regulations in order to be able to collect user data. Stopping EU-Data transfers would have meant huge costs for a large number of online businesses and would have been a disadvantage for both businesses as consumers.
Why is the announcement a surprise?
If banning EU-US data transfers was going to be such a bad thing, why has it come as a surprise that an agreement has been reached?
Expectations for the negotiations were low. Negotiators missed the deadline of the 31st of Jan for coming to an arrangement, and when they announced their failure to reach an agreement on the 1st of Feb, most commentators wrote off the deal, thinking it had failed.
Apparently the delegates worked day and night to reach the surprise deal, which essentially brings back a renewed version of safe harbour, although it has been rebranded as the ‘EU-US privacy shield’.
To reach the agreement the US had to agree to ‘binding assurances’ that national security measures would be subject to clear limitations and oversight mechanisms. Indiscriminate mass surveillance of European’s data has been ruled out by these guarantees. The ‘privacy shield’ will come into effect in 3 months, provided it receives the needed approvals. This is great news for marketers using transatlantic data transfers, as these are no longer under threat (provided the agreement receives all the necessary approvals). Businesses will have to abide by the terms of the privacy shield regarding the safe keeping of data, and if they don’t comply they will face sanctions and fines.
Stay tuned to the Smart Insights blog for more insights on what this new law and related law changes associated with the GDPR will mean for marketers.
From our sponsors: Surprise EU-US data privacy deal announced [@SmartInsights Alert]
