By James Walsh Manuela Finger, LL.M. King&Wood Mallesons

Inwalsh_j finger_ma verdict that could affect thousands of companies, the European Court of Justice (“ECJ”) has ruled that the so-called “Safe Harbour Agreement”, a pact that allowed data transfers between the US and EU, is invalid. According to Europe’s highest court personal data is not sufficiently protected in the US as it can be accessed by American authorities.

Companies, such as Facebook or Google, can no longer base the transfer of personal data to servers in the US on the so called “Safe Harbour Decision” of the European Commission (“Commission”) dated 26 July 2000. Yesterday the ECJ declared the Commission’s decision invalid because, among other reasons, the Safe Harbour decision enables interference by US public authorities with the fundamental rights of individuals and the Commission did not refer to any rules in the US that limit such interference or to the existence of effective legal protection against it.

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