Oct 06, 2015 - 4:30pm

Businesses Left Bracing After European Safe Harbor Ruling

Former Managing Editor, Digital Content


Servers stand in a computer room at Yahoo's data center in Lockport, New York.
Servers stand in a computer room at Yahoo's data center in Lockport, New York. Photo credit: Andrew Harrer/Bloomberg.

American businesses woke up to some troubling news Tuesday morning: The highest court in Europe declared the Safe Harbor Agreement – rules that have allowed the transfer of personal data to the United States since 2000 – invalid.

“Businesses on both sides of the Atlantic are seriously concerned about the implications of today’s ruling,” said Myron Brilliant, Chamber vice president and head of International Affairs. “More than 4,400 European and American companies of every size have relied on this agreement to be able to move data seamlessly across the transatlantic economy while providing a high standard of protection for consumers.”

The biggest question for the business community: What next?

“It is particularly alarming that this longstanding agreement has been invalidated with no discussion of a transition period or guidance regarding how companies should comply with the law while a new agreement is negotiated or as they transition to new mechanisms,” Brilliant said.

Concern rippled across Washington, D.C.

“There is concern about the economic consequences,” said White House press secretary Josh Earnest, adding, “We are disappointed that the court has struck down an agreement that since 2000 has proved to be critical in protecting both privacy and fostering economic growth in the United States and the European Union.”

Commerce Secretary Penny Pritzker said she was “deeply disappointed” with the news.

The decision “creates significant uncertainty for both U.S. and EU companies and consumers, and puts at risk the thriving transatlantic digital economy,” she said in a statement.

Brilliant noted that “too many politicians and pundits overlook the fact that the Safe Harbor Agreement is vital to the ability of European firms to conduct business across the Atlantic.”

“European consumers will also suffer diminished access to modern data-driven services in smaller EU markets,” he said. “For all these reasons, we urge the European authorities to act swiftly to address this issue.”

About the Author

About the Author

Former Managing Editor, Digital Content

Eric Nelson is the former managing editor of digital content at the U.S. Chamber of Commerce.