The eCommerce Blog - by Allegro Group

The European Court of Justice has invalidated the Safe Harbor. I think there are good legal, economic, data protection, and political grounds to question the wisdom of this judgment.

Many people think that the judgment against the Safe Harbor can legitimately be questioned, both with regard to the powers of national data protection authorities (DPAs), and with regard to the substantive ‘adequacy’ of the United States compared to EU Member States. Despite the recent opinion of the CJEU’s Advocate General on the Safe Harbor, there were many who refused to believe that the full court would actually invalidate the agreement, given the fact that Articles 25 and 26 foresee a clear leadership role for the Commission in the conclusion of adequacy decisions, but a much less important role for Member States and their authorities. In a properly functioning Single Market, it cannot be the case that a binding central decision by the Commission can simply be ignored by Member States. Moreover, the level of protection for personal data provided by the United States is criticised primarily on the grounds that law enforcement and security agencies retain broad powers of access to data held by US companies. Some feel that this means that Europeans’ privacy is put at risk when US companies hold their data. But the reality is that the 1995 Directive explicitly excludes law enforcement and national security access to company data from its scope – meaning that the legal protections provided to Europeans in Europe, by European Union Member States, are no stronger than they are in the US. Indeed, several EU Member States either have controversial ‘big brother’ laws on the books, or are seeking to pass new ones.

Just as importantly, the substantive data protection case against the Safe Harbor is non-existent. In an earlier blog post, I argued that the suspension of Safe Harbor would not give Europeans an iota of greater protection for their personal data.

The economic case for the existence of a safe and predictable mechanism for the transfer of personal data to the US is overwhelmingly compelling. As argued by a large coalition of European companies, the invalidation of the Safe Harbor will damage European industry and the European economy. It will be very interesting to see the reactions of the Commission and the US Government, and I hope that some new Safe Harbor agreement can be reached that provides the framework necessary for continued data flows across the Atlantic.

But what is perhaps most interesting about the Safe Harbor saga is the political side of things. Here we are in Europe, with civil war in Ukraine and Syria. Here we are in Europe, with deep fears in the Baltic States about their own borders. Here we are in Europe, with massive instability in Libya, regimes in Tunisia and Egypt that are making progress towards stability but are still precarious. Here we are in Europe, with the ever-present problems with Lebanon, Israel, and Palestine close by as well. Here we are in Europe, with a major financial crisis and the real possibility of the end of the Euro. Here we are in Europe, with a refugee crisis of historical proportions, without a clear strategy for how to handle it and with childish bickering and haggling between governments over a few thousand middle class Syrians. Here we are in Europe, with the prospect of a British “No” vote in an EU referendum. Here we are in Europe, with politicians of the radical left and radical right making gains in local, national, and European elections. Here we are in Europe, in other words, in serious trouble. You would have thought that in times of trouble, we would turn towards our friends and allies, and strengthen the relationships that provide us with economic, political, and military security. And yet, inexplicably, a large number of European leaders, whether they are DPAs, MEPs, MPs, prime ministers, or any number of others, are hell-bent on attacking the United States of America – and especially its government and its industry.

Even optimistic Europeans will acknowledge that we are in a time of huge uncertainty for the European Union. Five years ago, the collapse of the EU was inconceivable. Today, a scenario in which it collapses within a decade is entirely plausible. We need big, bold ideas to change our course, and we need leaders of courage who see the big picture to point the way. And here we are in Europe, picking pointless fights with our best friends on this blue planet. In that context, the venom that has characterised the anti-Safe Harbor campaign strikes me as peculiarly inappropriate.

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