International Safe Harbor Privacy Principles

{{Short description|European Union data protection law}} {{use mdy dates|date=August 2020}} {{about|the first framework, invalidated in 2015|the superseding framework, also found invalid|EU–US Privacy Shield|the current framework|EU–US Data Privacy Framework}} The '''International Safe Harbor Privacy Principles''' or '''Safe Harbour Privacy Principles''' were principles developed between 1998 and 2000 in order to prevent private organizations within the European Union or United States which store customer data from accidentally disclosing or losing personal information. They were overturned on October 6, 2015, by the European Court of Justice (ECJ), which enabled some US companies to comply with privacy laws protecting European Union and Swiss citizens.<ref name="inval" /> US companies storing customer data could self-certify that they adhered to 7 principles, to comply with the EU Data Protection Directive and with Swiss requirements. The US Department of Commerce developed privacy frameworks in conjunction with both the European Union and the Federal Data Protection and Information Commissioner of Switzerland.<ref>[http://export.gov/safeharbor/swiss/index.asp Welcome to the U.S.-Swiss Safe Harbor] accessed 1 November 2015</ref>

Within the context of a series of decisions on the adequacy of the protection of personal data transferred to other countries,<ref>[http://ec.europa.eu/justice/data-protection/international-transfers/adequacy/index_en.htm Commission decisions on the adequacy of the protection of personal data in third countries] accessed 1 November 2015</ref> the European Commission made a decision in 2000 that the United States' principles did comply with the EU Directive<ref>[http://ec.europa.eu/justice/data-protection/international-transfers/adequacy/index_en.htm 2000/520/EC: Commission Decision of 26 July 2000 pursuant to Directive 95/46/EC of the European Parliament and of the Council on the adequacy of the protection provided by the safe harbour privacy principles and related frequently asked questions issued by the US Department of Commerce (notified under document number C(2000) 2441)], accessed 1 November 2015</ref> – the so-called '''Safe Harbor decision'''.<ref>[https://ec.europa.eu/justice/data-protection/article-29/press-material/press-release/art29_press_material/2016/20160726_wp29_wp_statement_eu_us_privacy_shield_en.pdf statement of the Data Protection Working Party on the EU US Privacy Shield], additional text.</ref> However, after a customer complained that his Facebook data were insufficiently protected, the ECJ declared in October 2015 that the Safe Harbor decision was invalid, leading to further talks being held by the commission with the US authorities towards "a renewed and sound framework for transatlantic data flows".<ref>Vera Jourova, "Commissioner Jourová's remarks on Safe Harbour EU Court of Justice judgement before the Committee on Civil Liberties, Justice and Home Affairs (LIBE)", 26 October 2015</ref>

The European Commission and the United States agreed to establish a new framework for transatlantic data flows on 2 February 2016, known as the "EU–US Privacy Shield",<ref>[https://www.economist.com/blogs/economist-explains/2016/02/economist-explains-2 The new transatlantic data “Privacy Shield”], accessed 25 February 2016</ref> which was closely followed by the Swiss-US Privacy Shield Framework.

==Background history== In 1980, the OECD issued recommendations for protection of personal data in the form of eight principles. These were non-binding and in 1995, the European Union (EU) enacted a more binding form of governance, i.e. legislation, to protect personal data privacy in the form of the Data Protection Directive.<ref name=eu95>[https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=URISERV:l14012 Directive 95/46/EC of the European Parliament] and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data</ref>

According to the Data Protection Directive, companies operating in the European Union are not permitted to send personal data to "third countries" outside the European Economic Area, unless they guarantee adequate levels of protection, "the data subject himself agrees to the transfer" or "if Binding Corporate Rules or Standard Contractual Clauses have been authorised."<ref name="eu95" /><ref>European Commission (15 June 2001)[https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:32001D0497 Commission Decision 2001/497/EC of 15 June 2001 on standard contractual clauses for the transfer of personal data to third countries under Directive 95/46/EC15 June 2001], Official Journal L 181 of 04.07.2001.</ref> The latter means that privacy protection can be at an organizational level, where a multinational organization produces and documents its internal controls on personal data or they can be at the level of a country if its laws are considered to offer protection equal to the EU.

The Safe Harbor Privacy Principles were developed between 1998 and 2000. Key player was the Art. 29 Working Party, at that time chaired by the Italian Data Protection Authority. President Prof. Stefano Rodotà, one of the fathers of the privacy framework in Europe, helped by the Italian Data Protection Authority Secretary General Mr. Giovanni Buttarelli, lately appointed as European Data Protection Supervisor (EDPS). Safe Harbor Principles were designed to prevent private organizations within the European Union or United States which store customer data from accidentally disclosing or losing personal information. US companies could opt into a program and be certified if they adhered to seven principles and 15 frequently asked questions and answers per the Directive.<ref>{{cite web|title=U.S.–EU Safe Harbor Framework Documents |url=http://export.gov/safeharbor/eu/eg_main_018493.asp |publisher=US government |archive-url=https://webarchive.loc.gov/all/20150405033356/http://export.gov/safeharbor/eu/eg_main_018493.asp |archive-date=April 5, 2015 |url-status=dead }}</ref> In July 2000, the European Commission (EC) decided that US companies complying with the principles and registering their certification that they met the EU requirements, the so-called "safe harbor scheme", were allowed to transfer data from the EU to the US. This is referred to as the '''Safe Harbor decision'''.<ref name=decision>European Court of Justice [https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32000D0520:EN:HTML 2000/520/EC: Commission Decision of 26 July 2000 pursuant to Directive 95/46/EC of the European Parliament and of the Council] on the adequacy of the protection provided by the safe harbour privacy principles and related frequently asked questions issued by the US Department of Commerce (notified under document number C(2000) 2441) (Text with EEA relevance.) 25 August 2000, retrieved 30 October 2015</ref>

On 6 October 2015, the European Court of Justice invalidated the EC's Safe Harbor Decision, because "legislation permitting the public authorities to have access on a generalised basis to the content of electronic communications must be regarded as '''compromising the essence of the fundamental right to respect for private life'''" {{Emphasis in original}}.<ref name=inval>{{cite press release |title=Judgment in Case C-362/14 Maximillian Schrems v Data Protection Commissioner: The Court of Justice declares that the Commission's US Safe Harbour Decision is invalid |url=https://curia.europa.eu/jcms/jcms/P_180250/|agency=Court of Justice of the European Union|date=6 October 2015|pages=3|access-date=7 October 2015}}</ref>{{rp|2–3}}

According to the European Commission, the EU–US Privacy Shield agreed on 2 February 2016 "reflects the requirements set out by the European Court of Justice in its ruling on 6 October 2015, which declared the old Safe Harbor framework invalid. The new arrangement will provide stronger obligations on companies in the US to protect the personal data of Europeans and stronger monitoring and enforcement by the US Department of Commerce and Federal Trade Commission, including through increased cooperation with European Data Protection Authorities. The new arrangement includes commitments by the US that possibilities under US law for public authorities to access personal data transferred under the new arrangement will be subject to clear conditions, limitations and oversight, preventing generalised access. Europeans will have the possibility to raise any enquiry or complaint in this context with a dedicated new Ombudsperson".<ref>[https://europa.eu/rapid/press-release_IP-16-216_en.htm EU Commission and United States agree on new framework for transatlantic data flows: EU-US Privacy Shield], issued 2 February 2016</ref>

== Principles == The seven principles from 2000 are:<ref name=decision/> * '''Notice''' – Individuals must be informed that their data is being collected and how it will be used. The organization must provide information about how individuals can contact the organization with any inquiries or complaints. * '''Choice''' – Individuals must have the option to opt out of the collection and forward transfer of the data to third parties. * '''Onward Transfer''' – Transfers of data to third parties may only occur to other organizations that follow adequate data protection principles. * '''Security''' – Reasonable efforts must be made to prevent loss of collected information. * '''Data Integrity''' – Data must be relevant and reliable for the purpose it was collected. * '''Access''' – Individuals must be able to access information held about them, and correct or delete it, if it is inaccurate. * '''Enforcement''' – There must be effective means of enforcing these rules.

== Scope, certification and enforcement== Only US organizations regulated by the Federal Trade Commission or the Department of Transportation may participate in this voluntary program. This excludes many financial institutions (such as banks, investment houses, credit unions, and savings & loans institutions), telecommunication common carriers (including internet service providers), labor associations, non-profit organizations, agricultural co-operatives, and meat processors, journalists and most insurances,<ref>U.S. Department of Commerce [http://www.export.gov/safeharbor/ Welcome to the U.S.-EU & U.S.-Swiss Safe Harbor Frameworks] {{Webarchive|url=https://web.archive.org/web/20100609004012/http://www.export.gov/safeharbor/ |date=June 9, 2010 }} 9 October 2015, retrieved 30 October 2015</ref> although it may include investment banks.<ref>U.S. Department of Commerce [http://www.export.gov/safeharbor/eu/eg_main_018377.asp FAQ – Investment banking and audits] 29 January 2009, retrieved 30 October 2015</ref>

After opting in, an organization must have appropriate employee training and an effective dispute mechanism in place, and self re-certify every twelve months in writing that it agrees to adhere to the EU–US Safe Harbor Framework's principles, including notice, choice, access, and enforcement.<ref name=overview>U.S. Department of Commerce [http://www.export.gov/safeharbor/eu/eg_main_018476.asp U.S.–EU Safe Harbor Overview], 18 December 2013, retrieved 30 October 2015</ref> It can either perform a self-assessment to verify that it complies with the principles, or hire a third-party to perform the assessment. Companies pay an annual $100 fee for registration except for first time registration ($200).<ref>U.S. Department of Commerce [http://www.export.gov/safeharbor/eg_main_020436.asp Safe Harbor Fees] 9 April 2015, retrieved 30 October 2015</ref>

The US government does not regulate Safe Harbor, which is self-regulated through its private sector members and the dispute resolution entities they pick. The Federal Trade Commission "manages" the system under the oversight of the US Department of Commerce.<ref>Zach Whittaker [https://www.zdnet.com/article/safe-harbor-why-eu-data-needs-protecting-from-us-law/ Safe Harbor: Why EU data needs 'protecting' from US law Failure] Zdnet, 25 April 2011</ref> To comply with the commitments, violators can be penalized under the Federal Trade Commission Act by administrative orders and civil penalties of up to $16,000 per day for violations. If an organization fails to comply with the framework it must promptly notify the Department of Commerce, or else it can be prosecuted under the False Statements Act.<ref name=overview/>

In a 2011 case, the Federal Trade Commission obtained a consent decree from a California-based online retailer that had sold exclusively to customers in the United Kingdom. Among its many alleged deceptive practices was representing itself as having self-certified under Safe Harbor when in fact it had not. It was barred from using such deceptive practices in the future.<ref name="FTC v. Balls of Kryptonite">{{cite press release |author=Staff writer|title=FTC Settlement Bans Online U.S. Electronics Retailer from Deceiving Consumers with Foreign Website Names |url=https://www.ftc.gov/news-events/press-releases/2011/06/ftc-settlement-bans-online-us-electronics-retailer-deceiving |location=Washington|agency=Federal Trade Commission|date=June 9, 2011 |access-date=March 5, 2015}}</ref>

== Criticism and evaluation == ===EU evaluations=== The EU–US Safe Harbor Principles 'self certification scheme' has been criticised in regard to its compliance and enforcement in three external EU evaluations:

* A 2002 review by the European Union found "a substantial number of organisations that have self-certified adherence to the Safe Harbor do not seem to be observing the expected degree of transparency as regards their overall commitment or as regards the contents of their privacy policies" and that "not all dispute resolution mechanisms have indicated publicly their intention to enforce Safe Harbor rules and not all have in place privacy practices applicable to themselves."<ref>European Commission (2002) [https://web.archive.org/web/20060724174359/http://www.ec.europa.eu/justice_home/fsj/privacy/docs/adequacy/sec-2002-196/sec-2002-196_en.pdf The application of Commission Decision on the adequate protection of personal data provided by the Safe Harbour Privacy Principles] 11 pages, retrieved 30 October 2015</ref> * 2004 review by the European Union:<ref>European Commission (2004) [https://web.archive.org/web/20060724173657/http://www.ec.europa.eu/justice_home/fsj/privacy/docs/adequacy/sec-2004-1323_en.pdf The implementation of Commission Decision on the adequate protection of personal data provided by the Safe Harbour Privacy Principles] 11 pages, retrieved 30 October 2015</ref> * In 2008, an Australian consulting company named Galexia issued a scathing review, finding "the ability of the US to protect privacy through self-regulation, backed by claimed regulator oversight was questionable". They documented basic claims as incorrect where only 1109 out of 1597 recorded organisations listed by the US Department of Commerce (DOC) on 17 October 2008 remained in the database after doubles, triples and "not current" organisations were removed. Only 348 organisations met even the most basic requirements for compliance. Of these, only 54 extended their Safe Harbor membership to all data categories (manual, offline, online, human resources). 206 organisations falsely claimed to be members for years, yet there was no indication that they were subject of any US enforcement. Reviewers criticized the DOC's 'Safe Harbor Certification Mark' offered to companies to use as a "visual manifestation of the organization when it self-certifies that it will comply" as misleading, because it does not carry the words "self certify" on it. Only 900 organizations provided a link to their privacy policies, and for 421, the document was unavailable. Numerous policies were only one to three sentences long, containing "virtually no information". Many entries appeared to confuse privacy compliance with security compliance and showed a "lack of understanding about the Safe Harbor program". The companies' listing of their dispute resolution providers was confusing, and problems regarding independence and affordability were noted. Many organisations did not spell out that they would cooperate with or explain to their customers that they could choose the dispute resolution panel established by the EU Data Protection Authorities. :Galexia recommended the EU to renegotiate the Safe Harbor arrangement, provide warnings to EU consumers and consider to comprehensively review all list entries. They recommended to the US to investigate the hundreds of organisations making false claims, revising its statements about the number of participants, to abandon the use of the Safe Harbor Certification Mark, to investigate the unauthorised and misleading use of its Departmental logo and automatically suspend an organisation’s membership if they failed to renew their Safe Harbor certification.<ref name=galexia>Chris Connolly (Galexia) [http://www.galexia.com/public/research/assets/safe_harbor_fact_or_fiction_2008/ US Safe Harbor - Fact or Fiction?] ''Privacy Laws and Business International'', issue 96, December 2008, published on Galexia.com, retrieved 30 October 2015</ref>

===Patriot Act's reach=== In June 2011, Microsoft UK's managing director Gordon Frazer said that "cloud data, regardless of where it is in the world, is not protected against the Patriot Act."<ref>Zack Whittaker, [https://www.zdnet.com/article/microsoft-admits-patriot-act-can-access-eu-based-cloud-data/ Microsoft admits Patriot Act can access EU-based cloud data] Zdnet.com, June 28, 2011, retrieved 30 October 2015</ref>

The Netherlands promptly ruled out US cloud suppliers from Dutch government contracts, and even considered a ban on Microsoft- and Google-provided cloud contracts. A Dutch subsidiary of the US based Computer Sciences Corporation (CSC) runs the electronic health records of the Dutch national health service system and warned, that unless CSC could assure it was not subject to the Patriot Act, it would end the contract.<ref name=cbs/>

One year later in 2012, a legal research paper supported the notion that the Patriot Act allowed US law enforcement to bypass European privacy laws.<ref name=cbs>Zack Whittaker, [https://www.cbsnews.com/news/patriot-act-can-obtain-data-in-europe-researchers-say/ Patriot Act can "obtain" data in Europe, researchers say] CBS News December 4, 2012</ref>

===Citizen complaint about Facebook data safety=== In October 2015, the ECJ responded to a referral from the High Court of Ireland in relation to a complaint from Austrian citizen Maximillian Schrems regarding Facebook's processing of his personal data from its Irish subsidiary to servers in the US. Schrems complained that "in the light of the revelations made in 2013 by Edward Snowden concerning the activities of the United States intelligence services (in particular, the National Security Agency), the law and practice of the United States do not offer sufficient protection against surveillance by the public authorities". The ECJ held the Safe Harbor Principles to be invalid, as they did not require ''all'' organizations entitled to work with EU privacy-related data to comply with it, thus providing insufficient guarantees. US federal government agencies could use personal data under US law, but were not required to opt in. The court held that companies opting in were "bound to disregard, without limitation, the protective rules laid down by that scheme where they conflict with national security, public interest and law enforcement requirements".<ref name=inval/>

In accordance with the EU rules for referral to the ECJ for a preliminary ruling, the Irish Data Protection Commissioner since then has had to "examine Mr. Schrems's case 'with all due diligence' and ... decide whether ... the transfer of Facebook's European subscribers' personal data to the United States should be suspended".<ref name=inval/> EU regulators said that if the ECJ and United States did not negotiate a new system within three months, businesses might face action from European privacy regulators. On October 29, 2015, a new "Safe Harbor 2.0" agreement appeared close to being finalized.<ref>{{cite news|author1=Georgina Prodhan|title=U.S. sees new EU data-sharing pact within reach|url=https://www.reuters.com/article/us-eu-privacy-usa-idUSKCN0SN1O620151029|access-date=30 October 2015|work=Reuters|date=October 29, 2015}}</ref> However, Commissioner Jourova expected the US to act next.<ref>{{cite news|author1=Peter Sayer |title= E.U. tells U.S. it must make next move on new Safe Harbor deal, Nov. 6, 2015|url=http://www.computerworld.com/article/3002477/data-privacy/eu-tells-us-it-must-make-next-move-on-new-safe-harbor-deal.html|access-date=9 November 2015|work=Computerworld|date=November 6, 2015}}</ref> American NGOs were quick to expand on the significance of the decision.<ref>{{cite news|author1=NGOs |title= Digital Privacy, in the U.S. and Europe |url=https://www.nytimes.com/2015/10/13/opinion/digital-privacy-in-the-us-and-europe.html?_r=0|access-date=13 November 2015|work=New York Times|date=October 13, 2015}}</ref>

===Response to EU–US Privacy Shield Agreement=== {{See also|EU–US Privacy Shield}} {{Update section|date=April 2020}} German MEP Jan Philipp Albrecht and campaigner Max Schrems have criticized the new ruling, with the latter predicting that the Commission might be taking a "round-trip to Luxembourg" (where the European Court of Justice is located).<ref>{{cite web |first=Max |last=Schrems |title=EU US Privacy Shield (Safe Harbor 1.1) |quote=European Commission may be issuing a round-trip to Luxembourg |url=http://europe-v-facebook.org/PS_update.pdf |date=2 February 2016 |access-date=3 February 2016}}</ref> EU Commissioner for Consumers, Vera Jourova, expressed confidence that a deal would be reached by the end of February.<ref>{{Cite web|title = Jourová: The new EU-US bridge [Interview] |url = http://neurope.eu/article/jourova-sees-new-functioning-bridge-between-eu-and-us/|website = New Europe|access-date = 2016-02-03|language = en-US}}</ref> Many Europeans were demanding a mechanism for individual European citizens to lodge complaints over the use of their data, as well as a transparency scheme to assure that European citizens data did not fall into the hands of US intelligence agencies.<ref>{{Cite web|title = EU-US Data Transfers Won't Be Blocked While Privacy Shield Details Are Hammered Out, Says WP29 |url = https://techcrunch.com/2016/02/03/eu-us-data-transfers-wont-be-blocked-while-privacy-shield-details-are-hammered-out-says-wp29/|website = TechCrunch|access-date = 2016-02-03|first = Natasha|last = Lomas| date=February 3, 2016 }}</ref> The Article 29 Working Party has taken up this demand, and stated it would hold back another month until March 2016 to decide on consequences of Commissioner Jourova's new proposal.<ref>{{cite web |title=Statement on the consequences of the Schrems judgement |url=https://ec.europa.eu/justice/data-protection/article-29/press-material/press-release/art29_press_material/2016/20160203_statement_consequences_schrems_judgement_en.pdf |date=2 February 2016 |access-date=6 February 2016}}</ref> The European Commission's Director for Fundamental Rights Paul Nemitz stated at a conference in Brussels in January how the commission would decide on the "adequacy" of data protection.<ref>{{Cite web|title = New data transfer deal could come by Monday |date=2015-01-28 |url = http://iapp.org/news/a/new-data-transfer-deal-could-come-by-monday|website = The Privacy Advisor|access-date = 2016-02-03 |first = Jedidiah |last = Bracy}}</ref> ''The Economist'' newspaper predicts that "once the Commission has issued a beefed-up 'adequacy decision', it will be harder for the ECJ to strike it down."<ref>{{Cite news|title = Charlemagne: "Swords and shields". America and the European Union have reached a deal on data protection |date=February 6, 2016|url = https://www.economist.com/news/europe/21690035-america-and-european-union-have-reached-deal-data-protection-swords-and-shields|newspaper = The Economist |access-date = 2016-02-08}}</ref> Privacy activist Joe McNamee summed up the situation by noting the commission has announced agreements prematurely, thus forfeiting its negotiating right.<ref>{{Cite web|title = What's behind the shield? Unspinning the "privacy shield" spin |date=February 2, 2016|url = https://edri.org/privacyshield-unspinning-the-spin/|website = European Digital Rights initiative (EDRi) |access-date = 2016-02-10}}</ref> At the same time, the first court challenges in Germany have commenced: the Hamburg data protection authority was during February 2016 preparing to fine three companies for relying on Safe Harbor as the legal basis for their transatlantic data transfers and two other companies were under investigation.<ref>{{Cite web|title =Here Comes the Post-Safe Harbor EU Privacy Crackdown, Feb.25, 2016 |url = https://fortune.com/2016/02/25/safe-harbor-crackdown/ |first = David |last=Meyer |website = Fortune magazine |access-date = 2016-02-26}}</ref> From the other side a reaction looked imminent.<ref>{{Cite web|title =US plans intervention in EU vs Facebook case caused by NSA snooping |date=13 June 2016 |url = https://www.theregister.co.uk/2016/06/13/us_to_intervene_eu_vs_facebook_case/ |first = Alexander J. |last=Martin |website = The Register |access-date = 2016-06-16}}</ref>

On 25 March 2021 the European Commission and US Secretary of Commerce reported that "intensified negotiations" were taking place.<ref>European Commission, [https://ec.europa.eu/commission/presscorner/detail/en/STATEMENT_21_1443 Intensifying Negotiations on transatlantic Data Privacy Flows: A Joint Press Statement by European Commissioner for Justice Didier Reynders and U.S. Secretary of Commerce Gina Raimondo], published 25 March 2021, accessed 23 July 2021</ref> Discussions continued at the EU–US Summit in Brussels in June 2021.<ref>Department of Commerce, [https://www.commerce.gov/news/blog/2021/06/us-secretary-commerce-gina-m-raimondo-joins-president-biden-us-eu-summit-and U.S. Secretary of Commerce Gina M. Raimondo Joins President Biden at U.S.-EU Summit and Advances Tech and Trade Issues with European Union and Private Sector Leaders], published 23 June 2021, accessed 28 July 2021</ref>

==Further reading== * {{cite journal |last=Farrell |first=Henry |date=Spring 2003 |doi=10.1017/S0020818303572022 |title=Constructing the International Foundations of E-Commerce—The EU–U.S. Safe Harbor Arrangement |journal=International Organization |volume=57 |issue=2 |pages=277–306|s2cid=154976969 }}

==References== {{reflist}}

==External links== *[http://www.export.gov/safeharbor Safe Harbor Arrangement Official US site] *{{cite web|title=U.S.-EU Safe Harbor Framework Documents |url=http://export.gov/safeharbor/eu/eg_main_018493.asp |publisher=US government |archive-url=https://webarchive.loc.gov/all/20150405033356/http://export.gov/safeharbor/eu/eg_main_018493.asp |archive-date=April 5, 2015 |url-status=dead }} *[https://web.archive.org/web/20151030134238/https://safeharbor.export.gov/list.aspx US-EU Safe Harbor list], US Federal Trade Commission, n.d., retrieved 30 October 2015 *[https://github.com/pdehaye/safe-harbor An open data project listing Safe Harbor companies] collected from the FTC site, even obsoletes, which are overwritten on the FTC site, allowing to track how submissions evolve over time.

Category:European Union data protection law Category:Information privacy Category:Privacy law Category:United States–European Union relations