Social networks can store EU user data in the US under new deal

The European Union and the US have reached agreement on a new transatlantic data-sharing agreement. In an announcement on mondayThe European Commission says the new framework should allow information to flow freely between the two locations, reducing risks for social media companies operating in those two locations.

The decision comes three years after the EU’s top court struck down the Privacy Shield, a protocol that allows companies based in the US to collect and process data from EU citizens. At the time, the court said Privacy Shield didn’t do enough to keep users’ data out of the hands of US intelligence agencies. This was a blow to companies like Meta and Amazon, as data collection is an essential part of their business.

When this policy was repealed, it forced companies to comply with EU data-transferring policies. Earlier this year, Ireland’s Data Protection Commission (DPC) fined Meta a record $1.3 billion over data transfers to the US, saying the company risks “fundamental rights and freedoms” of citizens in the EU. failed to address”. In 2021, the National Data Protection Commission of Luxembourg fined Amazon $887 million for its handling of EU residents’ data.

The new EU-US data privacy framework should protect companies from facing similar penalties, as long as they commit to it. In addition to limiting the amount of foreign data to which US intelligence can access, the new framework establishes a Data Protection Review Court (DPRC) that can “independently investigate and resolve complaints” as well as may also order its removal.

US companies also must comply with a set of privacy obligations, including a requirement to delete personal data “when it is no longer necessary for the purpose for which it was collected.” They must also ensure that these safeguards are in place when this data is shared with third parties.

“The new EU-US data privacy framework will ensure safe data flows for Europeans and bring legal certainty to companies on both sides of the Atlantic,” European Commission President Ursula von der Leyen said in a statement. “Following the agreement in principle I made with President Biden last year, the United States has made unprecedented commitments to establish a new framework.”

Going forward, it is unclear whether this policy will hold up in an EU court, as two previous attempts to set up a new framework were rejected by judges. Nick Clegg, Meta’s President of Global Affairs, responded to the news on Twitter, stating that the company welcomes the new framework and notes that it will “protect the goods and services trusted by people and businesses on both sides of the Atlantic.”