The European Court of Justice ruled on Tuesday for the benefit of an Austrian student claiming that the US data protection agreement does not protect enough private information from European citizens, which is a decision that could hit the internet giant.
This verdict could have far-reaching consequences for technology companies such as Google and Amazon or Facebook because it imposes stronger rules on the storage of private data of European citizens.
Austrian law student Max Schrems initiated this case two years after the discovery of Edward Snowden's former US National Security Agency (NSA) researcher on the oversight programs of that agency.
Schrems has filed a lawsuit against the Irish Data Protection Agency after he has rejected his complaint about Facebook's practice of storing US data in the US.
He argued that the US law does not provide sufficient protection against the possible control of the information that Facebook transfers to US servers, and the court in Luxembourg has given it the right.
This is the Safe Harbor system that has allowed for more than a decade to exchange data between European and US companies. The ECJ has ruled that Safe Harbor does not provide sufficient protection to European citizens, despite the fact that the European Commission claims otherwise.
"This decision is a big blow to US global control that relies heavily on private partners," Schrems said, whose judicial battle the media called the battle between David and Goliath.
The decision sets out the fundamental questions about Safe Harbor, even if it is hardened by US and European authorities. Safe Harbor was founded by 2000. since the EC prohibited the transfer of data to non-European countries that did not respect strict protection criteria.
Industry groups have warned that the abolition of Safe Harboura will hit the European economy, as more than 4.000 European and international companies rely on that scheme.
"Today's decision is the basis for great uncertainty that needs to be solved immediately," Markus Beyrer, of BusinessEurope, warned.
Others welcome the decision and say that it is a victory for the protection of European data privacy rights.
German Justice Minister Heiko Maas says the decision gives "a mandate to the European Commission to fight the international scene for our data protection standards". (Hina)