Top European court undercuts major U.S. tech companies over surveillance fears

by Peter Heck · Jul 16th, 2020 10:54 am

Last Updated Jul 17th, 2020 at 6:55 am

In a surprise ruling from the European Court of Justice, thousands of multinational corporations will now face increased restrictions on storing data about residents of the European Union on U.S.-based servers.

The decision handed down Thursday invalidates the "Privacy Shield" agreement between the United States and European Union, awarding a major victory to privacy advocates wary of U.S. surveillance practices.

The implications of the ruling could be vast, depending on its application. Massive international corporations like Amazon, Facebook, and Apple, for instance, may have to decide whether to invest massive amounts of money in developing European-based data storage centers or severing business ties with the EU.

"This decision creates legal uncertainty for the thousands of large and small companies on both sides of the Atlantic that rely on Privacy Shield for their daily commercial data transfers," said Alexandre Roure, senior manager of public policy at the Computer & Communications Industry Association.

Financially, billions of trade dollars accrued through cloud services, marketing, and advertising could all be lost as a result of the decision.

Representatives from major technology companies have appealed to both U.S. and European lawmakers to find a "sustainable solution" that will comply with the established privacy law but also maintain the crucial trans-Atlantic economy.


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