Ruling threatens Facebook data transfers

Owen Bowcott Legal affairs correspondent

US digital data storage systems do not provide sufficient privacy from state surveillance, the European court of justice has ruled.

The declaration by the EU court in Luxembourg will have far-reaching consequences for the online industry and could force many companies to relocate their operations.

Declaring the American so-called safe harbour scheme “invalid”, the ECJ, whose findings are binding on all EU members states, ruled that: “The United States ... scheme thus enables interference, by United States public authorities, with the fundamental rights of persons...”

The ruling, confirming an earlier opinion by the court’s advocate-general last month, is a victory for the Austrian campaigner Maximilian Schrems, who initially brought a claim against Facebook in Ireland in the wake of Edward Snowden’s revelations about the activities of the US National Security Agency (NSA).

Responding to the judgment, Mike Weston, CEO of data science consultancy Profusion, said: “This ECJ’s decision is not surprising but it will still have a profound impact on the global tech industry. 

“American companies are going to have to restructure how they manage, store and use data in Europe and this take a lot of time and money. The biggest casualties will not be companies like Google and Facebook because they already have significant data centre infrastructure in countries like the Republic of Ireland, it will be medium-sized, data-heavy tech companies that don’t have the resources to react to this decision.

“Many of these businesses will reconsider how and whether they operate in Europe, which is bad news for everyone.”/Guardian