Recently, the Court of Justice of the European Union invalidated the 2000 U.S.-E.U. Safe Harbor agreement, creating needless fragmentation that will force American companies to comply with dozens of regulatory interpretations when handling E.U. citizens’ data. The Court’s decision makes it more difficult for American companies to do business across the Atlantic, and could slow job and economic growth here in the United States. Curiously, the ruling also runs counter to steps the European Commission and United States Congress are taking to close the gap in the global privacy arena.
It is no secret that American businesses, particularly those in the tech sector, are feeling the consequences of the mass surveillance programs carried out by some United States intelligence agencies. Since the world learned of these programs more than two years ago, American businesses have been playing privacy whack-a-mole, tamping down anxieties here, soothing nerves there, all in the name of maintaining their foothold in European markets. Unfortunately, they have not been entirely successful, and often find themselves having to jump through regulatory hoops in order to compete in the E.U.
It is against this backdrop that a bipartisan quartet of legislators in Congress introduced legislation to quell concerns in Europe. The Judicial Redress Act, introduced by Senators Murphy, D-Conn. and Hatch, R-Utah in the Senate (S. 1600), and Representatives Sensenbrenner, R-Wis. and Conyers, D-Mich. in the House (H.R. 1428), would simply extend some privacy rights that we enjoy here in the United States to citizens of designated allies or economic organizations in the European Union. For example, if a federal agency in the United States has incorrect data or is misusing the data of an E.U. citizen, that citizen can ask that the information be corrected and used properly, or seek judicial remedies in American courts.
This legislation will not garner front-page headlines, but it could have a profound impact on U.S.-E.U. relations if enacted. What this bill really boils down to is goodwill; after all, American citizens already enjoy these same rights in E.U. courts. It is a signal of our willingness to work with our partners in Europe. Most importantly, judicial redress will help reduce harmful digital trade barriers.
But why should anyone care about the European market for American digital goods? Recall that 95 percent of the world’s population lives somewhere other than the United States. Ensuring that European markets, along with every other market, are free and open is nothing short of a must for the businesses’ growth and job creation here in the United States.
As Congressional lawmakers are working to improve privacy protections for E.U. citizens, today’s ruling on Safe Harbor dealt a major setback. The decision chips away at a foundation lawmakers on both sides of the Atlantic were working to strengthen.
As for what to expect with the legislation winding through Congress, S. 1600 in the Senate has not yet received a committee hearing or vote, so its prospects are not yet clear. In the House, H.R. 1428 appears to have a little more traction as it was passed out of the House Judiciary Committee last month by a simple voice vote.
With just over a year left in the 114th Congress, it is our hope that leaders in the Senate and House of Representatives will come to understand just how critical this legislation is to American innovators and job creators and work to pass it. So, while clarity is needed from the courts, regulators, and lawmakers in the E.U., Congress can do its part by passing this important piece of legislation. Rebalancing the scales of justice, ensuring that E.U. and U.S. citizens have reciprocal avenues to correct and protect their sensitive data is good policy, good politics, and most importantly, good for innovators and job creators.
Policy and Gov't Relations Manager