Some Companies Shun Long-Awaited Trans-Atlantic Data Agreement

livemint.com:

Some businesses are holding off on signing up for a long-awaited new data agreement between the U.S. and the European Union, waiting to see whether the benefits outweigh the risks. After three years of negotiations, the EU gave final approval in July to a new deal that allows companies to store data about Europeans on U.S.

soil. Companies can sign up to use the new framework, potentially simplifying how they handle personal data. Still, some corporate privacy officers said they are in no rush to do so, waiting to see whether the new agreement will be challenged in court and whether continuing to use existing privacy contracts, although it is more work, might make more sense.

Using the new deal, known as the Trans-Atlantic Data Privacy Framework, opens companies up to more regulatory scrutiny and requires privacy teams to go through extra work to make sure they meet requirements under the deal. Since 2020, when the European Union’s top court ruled that Privacy Shield, a previous data agreement, was illegal, companies have been forced to use lengthy legal contracts to transfer data to the U.S. The court said the Privacy Shield left open the possibility that the U.S.

government could access European data, posing risks to Europeans’ privacy. More than 5,000 companies had used Privacy Shield to move data between jurisdictions. So far, around 2,500 companies have signed up to the new framework, according to the Commerce Department.