In its ruling, the European Court of Justice has overturned the EU-US Privacy Shield. The transfer of personal data to the USA will now present European companies with extreme challenges. In interview, eco Managing Director Alexander Rabe talks about how the ruling affects international business models, the Internet industry, and European data sovereignty.
What implications does the ruling have for the Internet industry?
On both sides of the Atlantic, there really are dire implications for the Internet industry and all international business models that rely on the exchange of personal data. The abolition of the Privacy Shield not only means a severe loss of confidence in legal certainty, but will also massively decelerate digitalisation within Europe – especially for small and medium-sized enterprises and for user industries. For Europe to remain internationally competitive, the course for digital transformation processes simply should be set now – but the opposite is now the reality. The EU must rapidly take remedial action and present a reliable and practicable solution for data transfer to the USA as quickly as possible.
What will now make the transfer of personal data to the USA so complex?
Without the Privacy Shield, there are now practically no alternatives for transferring data from the EU to the USA in a manner which is uncomplicated and legally secure. The only option currently available to companies is to exchange data with third countries on the basis of what are known as standard contractual clauses. And even these are now to be assessed by the data protection authorities on a case-by-case basis. This naturally signifies a substantial additional burden for the companies concerned.
And what about European data sovereignty? Could the end of the Privacy Shield possibly even boost projects like GAIA-X?
The Internet isn’t an island and doesn’t stop at national borders. If we want to make the EU attractive as a “data” location and not lose our equal footing with international competitors, we need reliable regulations for transatlantic data exchange.
With its ruling, the ECJ has now more or less taken the second step before the first. Without question, data infrastructure projects such as GAIA-X – which we as an association support at many levels – must be further promoted at European level in order to further strengthen the Digital Single Market and the free movement of data within the EU and with third countries. However, it will undoubtedly be some time before Europe can fully achieve its goals with this project. For even if GAIA-X is acquiring contours which are more and more concrete, it is still a very complex project.