EU Lawmakers Voice Skepticism Over Privacy Shield

Bloomberg Law: Privacy & Data Security brings you single-source access to the expertise of Bloomberg Law’s privacy and data security editorial team, contributing practitioners,...

By Stephen Gardner

March 17— European Union lawmakers and privacy officials expressed skepticism March 17 that the EU-U.S. Privacy Shield pact will prove a viable replacement for the invalidated U.S.-EU Safe Harbor framework.

At a hearing on Privacy Shield held by the European Parliament's Civil Liberties, Justice and Home Affairs Committee (LIBE), lawmakers said that there seemed to be inadequate safeguards against U.S. intelligence agency bulk collection of EU citizen's personal data transferred to the U.S. by companies.

Lawmakers also said that an U.S. State Department ombudsman—to be created within the Privacy Shield pact to hear EU citizens complaints about U.S. government surveillance of their data—has insufficient legal standing and independence.

(Click image to enlarge.)

US-EU flag image

At the hearing, Isabelle Falque-Pierrotin, the chair of the Article 29 Working Party of EU member state data protection commissioners, said that although an assessment of the Privacy Shield was ongoing and wouldn't be completed until mid-April, there were apparent data protection gaps.

The European Commission, the EU's executive arm, published Feb. 29 a draft decision finding the Privacy Shield adequate to protect the privacy of EU data subjects .

Continued Uncertainty

The Privacy Shield would be a self-certification scheme for companies that transfer personal data to the U.S. for commercial purposes. Its finalization is being waited on by thousands of companies on both sides of the Atlantic affected by the European Court of Justice's invalidation in October 2015 of the Safe Harbor data transfer scheme .

Those companies face at least several months of uncertainty while the procedures to approve the European Commission's Privacy Shield adequacy decision are completed. The Art. 29 Working Party will publish their opinion on the draft decision April 12-13.

“Early May seems like the earliest the Privacy Shield will actually be operational,” Peter A. Blenkinsop, a privacy and data security partner at Drinker Biddle & Reath LLP in Washington, explained. “We've been in limbo since October in terms of a new framework and by mid-2018 there might need to be further modifications, which creates uncertainties for companies.”

Under EU procedural rules, the European Parliament doesn't have the power to intervene in the procedure.

Tiina Astola, commission director-general for justice and consumers, speaking at the March 17 hearing, said that Privacy Shield was “radically different from the old Safe Harbor,” and should be “assessed as a whole,” including its seven annexes, which detail various commitments from U.S. government departments and agencies.

The Privacy Shield “offers a viable and comprehensive new system” including detailed suspension provisions in case the U.S. was seen to be backsliding on privacy protections, she said.

“We will keep a close eye on how U.S. companies and authorities act in practice,” she said.

Lawmakers Aren't Convinced

However, LIBE lawmakers weren't convinced.

Dutch liberal lawmaker Sophie in ’t Veld said “I have big doubts whether this is Schrems-proof,” referring to the landmark case that resulted in the invalidation of Safe Harbor.

Another Dutch LIBE member, Judith Sargentini, questioned if the ECJ would accept that the Privacy Shield ombudsman, who would look into complaints around national security access to personal data, was truly independent from the U.S. administration.

Jan Phillip Albrecht, the German Green lawmaker who was responsible for overseeing the passage through the European Parliament of the EU's forthcoming general data protection regulation , said that the ombudsman “has basically the function of just being a messenger.”

Sargentini added that Annex VI to the draft Privacy Shield decision, which contains assurances related to U.S. national security data access, notes that bulk collection of personal data by the U.S. government could take place in certain circumstances, which is an apparent infringement of the EU privacy principle that any government access to personal data should be targeted, necessary and proportionate.

Astola said that “it is true that according to these rules there can be bulk collection, but only if targeted collection is not possible for technical and operational reasons.”

Bruno Gencarelli, head of the data protection unit within the European Commission's Justice and Consumers directorate, said that in its ruling invalidating Safe Harbor, the ECJ had found only the combination of bulk collection of personal data and unlimited access to that data to be contracy to EU privacy rights.

“Even when bulk collection cannot be avoided,” access to that data would be “strictly limited,” Gencarelli said.

Article 29 Concerns

Falque-Pierrotin said the Art. 29 Working Party needs “to ensure that there is not massive or indiscriminate access” to personal data transferred to the U.S.

She questioned whether there were enough EU privacy principles included in the draft Privacy Shield decision. “We feel there is an absence of rules in the Privacy Shield on data retention,” she said.

In addition, any Privacy Shield decision would need to be revisited when the EU general data protection regulation takes effect to ensure that new rights are taken into account, she said.

The Privacy Shield would “set a standard” for other EU decisions on adequacy of privacy protections in other countries but they must be cautious, she added.

With assistance from Tera Brostoff in Washington

To contact the reporter on this story: Stephen Gardner in Brussels at correspondents@bna.com

To contact the editor responsible for this story: Daniel R. Stoller at dstoller@bna.com

For More Information

The European Commission's draft adequacy decision on the EU-U.S. Privacy Shield, and its annexes, are available at http://ec.europa.eu/justice/newsroom/data-protection/news/160229_en.htm.