President Joe Biden signed an executive order to protect private data transferred between the United States and the European Union that is meant to allow Big Tech companies such as Meta and Google to continue providing data services to European customers.
The order is meant to help the country implement the government’s commitments laid out in the EU-U.S. Data Privacy Framework in March. The framework was intended to account for European concerns about the intelligence community acquiring data without recognition of the country’s data practices and will incorporate limitations for surveillance of EU private data.
“This is a combination of our joint efforts to restore trust and stability to trans-Atlantic data flows and is a testament to the enduring strength of the U.S.-EU relationship and our shared values,” said Commerce Secretary Gina Raimondo at a press briefing. The order is meant to fulfill the U.S. part of an agreement that would still face review from the European Commission and must be ratified. It could significantly affect the ability of European businesses to use U.S.-based data centers or access services such as web tracking or online advertising.
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The order will add safeguard protections concerning data gathered by the U.S. intelligence community from Europe, including a requirement that all activities occur in pursuit of “defined national security objectives,” that they take privacy and civil liberties into consideration, and that they are appropriately applied. The order also implements handling requirements for personal information collected through the tests and extends the responsibilities of the people overseeing the practice.
The order will also require the intelligence community to update its policies accordingly to account for these security concerns and to create a “multi-layer mechanism” that will allow for a review of potential intelligence-gathering behavior. The first layer will have the civil liberties protection officer in the Office of the Director of National Intelligence review the case, followed by the attorney general establishing a relevant court to review the CLPO’s decisions and analysis.
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The framework was pitched in March as a tool for addressing certain privacy breaches over U.S. intelligence activities within its resident countries. The EU passed the Privacy Shield Framework in 2016, which provided guardrails for how U.S. intelligence operatives could investigate the data of EU citizens. However, the framework was shut down in 2020 by the European Court of Justice. This decision has been used by several European regulators when ordering European companies to stop transferring data to U.S. data centers.
However, this effort may be hampered by a general mistrust of the U.S.’s data handling. Nearly half of adults in EU countries said that they don’t trust the U.S. to store and manage their data, according to a July Morning Consult poll.
Tech industry groups praised the order. “We applaud the Biden Administration for taking affirmative steps to ensure the efficiency and effectiveness of American and European cross-border data flows and will continue to work with the Administration and members of Congress from both parties to pass a federal privacy bill,” said Linda Moore, TechNet president and CEO, in a statement.
However, there are some concerns that a delayed approval by the European Commission could be detrimental to European businesses. “It is urgent that agreement on an effective Privacy Shield be reached expeditiously, as EU citizens already face the potential to lose access to services like Google Analytics and Facebook, not to mention the potential disruption to financial services like insurance and payments networks,” said Mikolaj Barczentewicz, senior scholar at the International Center for Law & Economics.
The framework could affect hundreds of billions of dollars in business between the U.S. and the EU. The two countries traded more than $260 billion in information and communications technology-related transactions in 2020, according to the Congressional Research Service.
