The Safe Harbour legislation, established due to conflicting data protection laws between the EU and US was voided by the European Court of Justice at the start of this month. The decision was made after the court found that current US surveillance laws breach the fundamental rights of European citizens.
The court made the judgement to provide a very definite message to the business world on the importance of data privacy and insisted that non-compliance will result in serious consequences. “EU data protection authorities are committed to take all necessary and appropriate actions, which may include coordinated enforcement actions”, the court wrote in a statement.
It is implied that for companies to continue operating across the Atlantic, the EU will either have to bend to the US, or the US will have to draft stronger data protection laws. For now, American companies including Google, Facebook, Apple and Microsoft must seek to strike “model contract clauses”. These agreements authorise the transfer of data outside of Europe.
Does the suspension of Safe Harbour affect UK businesses?
Marketing could be a new challenge for US companies operating in the UK from the US. Without appropriate data, the quality of direct marketing to UK consumers is likely to fall below par, meaning more junk mail being sent to more people who don’t need it.
The suspension could however present a lucrative business opportunity for the UK. If US companies no longer have access to accurate and relevant UK data, marketing endeavours may have to be outsourced to the UK. This would mean employing locally-based companies, applying local standards, and utilising local knowledge to target the UK market. Over time, we would expect the standard of US marketing in the UK to improve. This opportunity is profitable for the UK economy in the immediate future, and constructive in the development of better international marketing strategies in the US.
Will I notice any changes?
In the short term, the impact is unlikely to be obvious. It’s improbable that social sites such as Facebook will be disrupted, but it may open the door to further complaints and lawsuits from users and data regulators.
When will the new Safe Harbour agreement come into effect?
The agreement is currently being negotiated between the EU and US. Both parties have until the 31st January 2016 to settle on a new deal and we can expect a revised legislation by the end of this year. For now, encryption may be the only option in maintaining data transfer while a new agreement is put in place.