EU Surveillance Worries Don’t Undercut Privacy Shield Support

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By George R. Lynch and Daniel R. Stoller

Companies should be relieved that European Union officials affirmed the EU-U.S. Privacy Shield data transfer pact is adequate, despite their concerns about U.S. government surveillance practices, privacy attorneys told Bloomberg Law Oct. 18.

The U.S. government has implemented “the necessary structures and procedures” for continued success of the Privacy Shield data transfer framework, the European Commission, the EU’s executive arm, said in an Oct. 18 report. The commission, however, said the U.S. could do better in reviewing the compliance of U.S. companies that self-certify to the Department of Commerce that they will abide by EU-approved privacy principles. The commission also called for increased cooperation between U.S. and EU privacy regulators, stronger oversight of U.S. surveillance practices, and appointments to give the U.S. Privacy and Civil Liberties Oversight Board (PCLOB) a functioning quorum.

Privacy Shield-certified companies “should be pleased” with the report because it confirms that the “framework is functioning” and will “continue to be available for these companies” to transfer data from the EU, Kendall Burman, privacy counsel at Mayer Brown LLP in Washington and former deputy general counsel for Commerce, told Bloomberg Law.

The Privacy Shield replaced the U.S.-EU Safe Harbor program, which the EU’s top court invalidated in 2015, in part over concerns about the scope of U.S. government surveillance. Microsoft Corp., Alphabet Inc.'s Google, Facebook Inc., and more than 2,500 other U.S. companies rely on the program to send data from the EU to the U.S.

U.S.-EU Cooperation

The annual review involved European Commission representatives and U.S. officials from Commerce and other departments. This cooperation between the EU and U.S. wasn’t a part of the Safe Harbor program. The Privacy Shield includes specific requirements for cooperation, including the annual review process.

The work between the two government groups “is a complete sea change from the way Safe Harbor worked,” Cameron F. Kerry, privacy and cybersecurity senior counsel at Sidley Austin LLP in Washington and former general counsel and acting Commerce secretary, told Bloomberg Law.

The active EU-U.S. cooperation may bode well for the longevity of the Privacy Shield program.

Commerce and the commission took their responsibilities seriously in anticipation of the annual review, which is “how a framework like this becomes long-lasting,” Justin Antonipillai, CEO of data privacy management company WireWheel.io and former Commerce acting undersecretary who led the U.S. team that negotiated the Privacy Shield, told Bloomberg Law.

Commerce Secretary Wilbur Ross said the U.S. and EU have worked closely over the past year to implement the Privacy Shield. “We look forward to continuing to work together with our colleagues on the European Commission and across all of the EU Member States as we continually strive to ensure that the Privacy Shield program serves all stakeholders well,” Ross said.

U.S. Surveillance

The commission expressed some concerns about U.S. government surveillance practices.

Congress should limit the bulk collection of data and codify other privacy protections related to non-U.S. persons in President Barack Obama’s Presidential Policy Directive-28 in legislation to reauthorize Section 702 of the Foreign Intelligence Surveillance Act (FISA), the commission said in the report. The law gives U.S. intelligence agencies broad surveillance authority.

“Surveillance issues have predominated the conversations leading up to the review of the Privacy Shield,” Burman said. That will be a “pressure point” as Congress moves to reauthorize Section 702, she said.

Two bills are before Congress to reauthorize FISA Section 702. The Senate bill by Sen. Tom Cotton (R-Ark.), would reauthorize the law without any changes. The House bill by Judiciary Committee Chairman Robert Goodlatte (R-Va.), would increase the sort of privacy and civil liberties protections called for by the EU Commission.

The House bill “includes principles from Presidential Policy Directive 28,” a Judiciary committee aide told Bloomberg Law Oct. 18.

Privacy Board

The Privacy and Civil Liberties Oversight Board is an independent, bipartisan executive branch agency created after 9/11 to ensure U.S. government officials consider privacy and civil liberties implications of anti-terrorism and homeland security initiatives.

The board currently has a single member, Republican Elisebeth B. Collins. At full strength, the board would have five members nominated by the president and confirmed by the Senate, with no more than three members from the same political party. President Donald Trump has nominated Republican Adam I. Klein to lead the board, but the Senate hasn’t acted on the nomination.

EU officials are worried that the PCLOB is so short-handed. The commission recommended “the swift appointment of the missing members” of the board.

Goodlatte’s bill would allow the PCLOB to function without a full quorum of five members, the House committee aide said.

Referring to PCLOB appointments, a White House spokesperson told Bloomberg Law Oct. 18 that “the administration is working hard on all nominations and we look forward to speedy confirmations of our qualified nominees.”

To contact the reporter on this story: George R. Lynch in Washington at glynch@bna.com; Daniel R. Stoller in Washington at dstoller@bna.com

To contact the editor responsible for this story: Donald Aplin at daplin@bna.com

For More Information

The European Commission's Privacy Shield annual review report is available at http://src.bna.com/ttV.

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