Advertisement

EU ruling on consumer data is a huge blow to tech

The striking down of the 'safe-harbour agreement' with America by the EU's highest court could lead to the balkanisation of the web.

15-10-8-Schrems-634
Max Schrems's legal victory could threaten the internet's open borders

The European Court of Justice (ECJ), the EU's highest court, has struck down the "safe-harbour agreement" with America covering consumer data. EU rules say that citizens' data can only be transferred to countries that comply with EU privacy rules. For the past 15 years, American firms have self-certified that they do under safe harbour. Now the ECJ has decided that the law is invalid because it prevents European authorities from taking action if citizens say their right to privacy has been breached.

Advertisement - Article continues below

The case was triggered by an Austrian law student, Max Schrems, who asked the Irish Data Protection Commission what information about him Facebook's Irish subsidiary was passing on to US authorities. His move followed Edward Snowden's revelation that the US National Security Agency had accessed foreign citizens' data stored by tech firms.

What the commentators said

"Now that business model has been dealt a huge blow." The ruling "puts at risk the thriving transatlantic digital economy", the American commerce secretary, Penny Pritzker, told the FT. American firms may now have to set up infrastructure in Europe to house US data. "We're talking about millions of dollars of impact here," said Jan Rezab of Socialbakers in the FT. "This is not pocket change." The upshot may be the 'balkanisation' of the web, whereby companies tailor their services to each country closing down the relatively open borders of the internet.

Advertisement
Advertisement

Recommended

How long can the good times roll?
Economy

How long can the good times roll?

Despite all the doom and gloom that has dominated our headlines for most of 2019, Britain and most of the rest of the developing world is currently en…
19 Dec 2019
Are we back on the road to serfdom?
Economy

Are we back on the road to serfdom?

The coronavirus crisis has led to levels of state intervention unprecedented in peace time. The Austrian School reminds us of the challenges, say Dan …
11 Jun 2020
MoneyWeek's quiz of the week, 16-22 May
Economy

MoneyWeek's quiz of the week, 16-22 May

Test your recollection of the events of the last seven days with MoneyWeek's quiz of the week
22 May 2020
What are negative interest rates and could they happen here?
UK Economy

What are negative interest rates and could they happen here?

Negative interest rates – where banks pay you to borrow money – now exist in many parts of the world. John Stepek explains why they are a terrible ide…
18 May 2020

Most Popular

Can Rishi Sunak save the economy with stamp duty cuts and half-price meal deals?
UK Economy

Can Rishi Sunak save the economy with stamp duty cuts and half-price meal deals?

John Stepek runs his eye over the chancellor's £30bn stimulus package and asks if it's enough to get the economy back on its feet after months of lock…
9 Jul 2020
An economics lesson from my barber
Inflation

An economics lesson from my barber

On reopening his shop after lockdown, Dominic Frisby’s barber doubled his prices. It’s all part of the post-Covid inflation process – and we’re going …
8 Jul 2020
What gold, bonds and tech stocks have in common
Stockmarkets

What gold, bonds and tech stocks have in common

"Risk off" or "safe haven" assets such as gold and government bonds have been doing well lately. But so have riskier tech stocks. That seems to defy c…
10 Jul 2020