In essence, the ECJ found that the Safe Harbour Principles were incompatible with EU data laws given that the framework lacked any operational oversight from US or EU agencies. The reason for this ruling was mainly because the act of giving public authorities access to EU individuals' data through the adherence of general principles was in direct conflict with the right to privacy as enshrined in Article 8 of the European Convention on Human Rights (ECHR). US companies operated under the provisions of the Safe Harbor Decision for over 15 years but in October 2015, the European Court of Justice ruled that the process of the Safe Harbour Decision was invalid. However, by July 2000, it was decided that any US company that was able to demonstrate its commitment to these Safe Harbor Principles would be permitted to send and receive data from the EU – known as the "Safe Harbor Decision". These principles incorporated some of the requirements set out by the Data Protection Directive, including the need for better security, relevant data collection, and the restrictions on third-country transfers, only these were voluntary for US companies.
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This would replace the need for any mechanisms such as formal adequacy agreements, standard contractual clauses (SCCs) or binding corporate rules.ĭeveloped between 19, the Safe Harbour Privacy Principles were initially designed to prevent organisations in the US and the EU from accidentally disclosing personal information by providing clear guidelines on how to collect and manage data. However, because it was vital to ensure that data continued to flow undisrupted between EU territories and the US, the two entities came together to build a specific architecture to ensure that businesses could seamlessly move data while data subjects would rest easy knowing their rights would continue to apply. The EU’s appetite for raising the level of data protection for its citizens wasn’t matched by legislators in the US, especially considering how security agencies such as the NSA were known to operate. Although it covered a variety of issues, one of its main functions was to ensure companies sending data belonging to EU data subjects to non-EEA countries couldn’t process the data by weaker standards.
The EU eventually signed the Data Protection Directive in 1995, which was the first set of meaningful data protection regulations, and the legislation that would eventually evolve into what we know as GDPR today. To guarantee these protections were universal, the EU needed to ensure that citizens were safeguarded by the same protections not only in the EU but when their data was sent to other countries, such as the US. The history of both frameworks actually stretches back to the 1980s when the EU started to pursue policies to raise the level of data protection offered to citizens throughout its member states. Privacy Shield, which suffered the same fate, replaced Safe Harbour, and once again tried to ease data flows between the US and the EU. The ‘International Safe Harbour Privacy Principles’, referred to commonly as Safe Harbour, were in force between 20, eventually being deemed insufficient following a challenge by Max Schrems. It was also ruled that the mechanism did not provide data subjects with an adequate point of redress or cause of action when issuing complaints.
The ECJ argued that the creation of Privacy Shield gave primacy to US surveillance laws, with its current form being unable to provide adequate protections for EU resident data. Privacy Shield was ruled invalid by the European Court of Justice on 16 July 2020 as part of the Facebook Ireland vs Max Schrems case.
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