US Government Seeks to Join Challenge to Legality of Standard Contractual Clauses

The US government has asked the Irish High Court to be joined as an amicus curiae (friend of the court) in the case between Schrems and Facebook, concerning the validity of Standard Contractual Clauses, as the case has potentially significant implications to US authorities and companies. 

Last month, the Irish Data Protection Commissioner (DPC) sought a referral to the European Court of Justice (CJEU) to determine the legal status of international data transfers under Standard Contractual Clauses. The referral arose as a result of the complaint by Max Schrems against Facebook concerning its use of Standard Contractual Clauses to transfer personal data from Facebook Ireland to its parent company, Facebook Inc., in the US.  Only the CJEU, not national courts, can decide on the validity of the Standard Contractual Clauses.  Mr Justice McGovern has agreed to hear the DPC's application for referral to the CJEU on 27 June 2016. 

Representatives of the tech industry have also asked to be joined in the Schrems v Facebook case, including the American Chamber of Commerce, the Irish Business and Employers Confederation (IBEC) and the Business Software Alliance, as their members also rely on the standard contractual clauses as a legal basis to transfer data to the US. 

Since the invalidation of the Safe Harbour framework by the CJEU last year, most companies have relied on the Standard Contractual Clauses as a legal basis to transfer data from the EU to the US. However, Schrems argues, the Standard Contractual Clauses do not change the underlying problem of US mass surveillance laws and lack of redress by Europeans in the US.  With the prospect of the Standard Model Clauses being held by the CJEU to be invalid,  it is vital that the Privacy Shield is agreed as soon as possible, otherwise transferring data from the EU to the US will prove very difficult. 

The Privacy Shield, which will replace the invalid Safe Harbour framework, has yet to be consented to by the Article 31 Committee.  The Article 29 Working Party and the European Data Protection Supervisor have both called for improvements to be made to the Shield.  In particular, they have questioned the impartiality of the proposed US Ombudsperson to oversee redress for Europeans whose data has been misused, and the possibility of US authorities to carry out mass surveillance for national security reasons.

For more information please contact Davinia Brennan, or your usual contact in A & L Goodbody Solicitors.

Date Published: 14 June 2016