Skip to main content

News story

July 29, 2020

Data transfers: EU/US Privacy Shield shattered

On 16 July 2020, the Court of Justice of the European Union (CJEU) struck down the European Union (EU)/United States (US) Privacy Shield, which served as the mechanism for which EU citizens’ personal data could be shared with the US. Instead, companies must now use standard contractual clauses (SCCs).

This will have far-reaching impacts on companies on both sides of the pond. Those who relied on the Privacy Shield to transfer personal data must find an alternative method or stop. This will be extremely problematic for companies that work across both jurisdictions, who must transfer personal data for their company to function.

What was the Privacy Shield?

Companies can transfer personal data to other countries where there is at least an equal measure of data protection as directed by EU law. Companies can legally transfer data when the EU has determined that a third country has adequate measures in place. Due to substandard data protection and privacy laws, the US has not passed this test. So, the EU and the US produced the Privacy Shield Framework. This framework carved out a legal path by which the personal data of EU citizens could be transferred between the EU and the US, so long as those US companies enrolled in the Privacy Shield Framework complied with the data protection obligations imposed upon them.

Why did the CJEU invalidate the Privacy Shield?

The CJEU determined that US National Security law does not sufficiently protect EU citizens’ personal data. US surveillance laws allow the government to access more personal data than is strictly necessary. In short, the US government can snoop to a degree that does not align well with EU law. Hence, the Privacy Shield Framework does not sufficiently protect the personal data transferred under it.

Standard Contractual Clauses – what are they?

SCCs are standard clauses published by the European Commission or by a member state Supervisory Authority. They offer sufficient safeguards on data protection to allow personal data to be transferred outside of the EU. Although the CJEU endorsed the use of SCCs, moving forward, it made clear that parties have an obligation to ensure that the laws in the recipient country are sufficient to protect EU personal data. If the guarantees of the SCCs are not upheld, then personal data transfers with that company must be suspended.

What should companies do now?

Companies that transfer personal data to the US must ensure they continue to do so lawfully. Where a company has previously relied on Privacy Shield certification, it must implement a new transfer mechanism as an SCC. Still, where required, it must consider additional supplemental contractual safeguards that go above the standard SCCs.

To avoid falling foul of the Information Commissioners Office (ICO), companies must assess whether their data privacy safeguards are sufficient and ensure those of any company outside of the EU with whom they have or intend to continue sharing EU citizens’ personal data affords an equivalent protection guaranteed within the EU under GDPR legislation.

This is a complicated area of cross-border data protection law. Companies should seek advice from a lawyer to ensure compliance with EU law.

Speak to Karen Cole today, who can review your existing contracts and practices to ensure your company complies.

Note: This is not legal advice; it provides information of general interest on a current legal issue.

Stay in touch

Subscribe to our newsletter

Stay in touch

By completing your details and submitting this form you confirm you are happy for us to send you marketing communications and that you agree to our Website Privacy Policy and Legal Notice and to us using Mailchimp to process your data.


Sending

News/Insight

  • Pension and inheritance tax changes from April 2027: why now is the time to review your will and estate plan
    From 6 April 2027, most unused pension funds and pension death benefits are expected to be included in a person’s estate for inheritance tax purposes. This article explains what the changes could mean for families, pension nominations, wills, chari


    Read more
  • What happens when company owners disagree? The key to keeping private companies running smoothly
    Director and shareholder disagreements can quickly disrupt a business if they are not addressed early. This article explains what disputes can mean for a private company, how they can be avoided, and how legal advice can help protect stability and su


    Read more
  • SMEs urged to review risks as liability rules expand
    New criminal liability rules taking effect on 29 June 2026 will make it easier to prosecute businesses of any size where senior managers commit offences while acting on the organisation’s behalf.


    Read more
  • AI-written grievances add new pressure for employers
    AI is making it easier for employees to produce detailed, formal-looking grievances that refer to legal concepts and workplace rights. For employers, the key is to look beyond the language, identify the core concern and follow a fair, consistent grie


    Read more
  • What to check in a new build contract
    Buying a new build home can be exciting, but the legal process carries important risks. From long-stop dates and mortgage deadlines to specifications, deposits, service charges and warranties, early legal advice can help protect your position before


    Read more

What they say...

  • Client, July 2026
    Pragmatic, but commercially astute support “Genuinely, we valued your pragmatic, but commercially astute support. It has helped us get this tricky deal over the line in a manner that we both feel supports our needs in a balanced way and gives L

  • Chey, July 2026
    Professional and speedy “I’m extremely happy with the service provided by RIAA Barker Gillette. They were very professional, dealt with my matter at speed and were very accommodating with my disability. I wouldn’t hesitate to use th

  • Client, June 2026
    Thank you “I had a call with Pippa that was not only factual and to the point but also reassuring and very helpful. Would highly recommend.”

  • Client, June 2026
    Trusts services “Very helpful service which solved our problem.”

  • Client, June 2026
    Probate Services “We used Patrice Lawrence to deal with our parents’ probate, and she handled the case promptly, professionally and with the respect due for a matter of this nature.”

Read more
Send this to a friend