Skip to main content

Nixon Peabody LLP

  • People
  • Capabilities
  • Insights
  • About
Trending Topics
    • People
    • Capabilities
    • Insights
    • About
    • Locations
    • Events
    • Careers
    • Alumni
    Practices

    View All

    • Affordable Housing
    • Community Development Finance
    • Corporate & Finance
    • Cybersecurity & Privacy
    • Entertainment & Media
    • Environmental
    • Franchising & Distribution
    • Government Investigations & White Collar Defense
    • Healthcare
    • Intellectual Property
    • International Services
    • Labor, Employment, and Benefits
    • Litigation
    • Private Wealth & Advisory
    • Project Finance
    • Public Finance
    • Real Estate
    • Regulatory & Government Relations
    Industries

    View All

    • Aviation
    • Cannabis
    • Consumer
    • Energy
    • Financial Services
    • Healthcare
    • Higher Education
    • Infrastructure
    • Manufacturing
    • Nonprofit Organizations
    • Real Estate
    • Sports & Stadiums
    • Technology
    Value-Added Services

    View All

    • Alternative Fee Arrangements

      Developing innovative pricing structures and alternative fee agreement models that deliver additional value for our clients.

    • Continuing Education

      Advancing professional knowledge and offering credits for attorneys, staff and other professionals.

    • Crisis Advisory

      Helping clients respond correctly when a crisis occurs.

    • DEI Strategic Services

      Providing our clients with legal, strategic, and practical advice to make transformational changes in their organizations.

    • eDiscovery

      Leveraging law and technology to deliver sound solutions.

    • Environmental, Social, and Governance (ESG)

      We help clients create positive return on investments in people, products, and the planet.

    • Global Services

      Delivering seamless service through partnerships across the globe.

    • Innovation

      Leveraging leading-edge technology to guide change and create seamless, collaborative experiences for clients and attorneys.

    • IPED

      Industry-leading conferences focused on affordable housing, tax credits, and more.

    • Legal Project Management

      Providing actionable information to support strategic decision-making.

    • Legally Green

      Teaming with clients to advance sustainable projects, mitigate the effects of climate change, and protect our planet.

    • Nixon Peabody Trust Company

      Offering a range of investment management and fiduciary services.

    • NP Capital Connector

      Bringing together companies and investors for tomorrow’s new deals.

    • NP Second Opinion

      Offering fresh insights on cases that are delayed, over budget, or off-target from the desired resolution.

    • NP Trial

      Courtroom-ready lawyers who can resolve disputes early on clients’ terms or prevail at trial before a judge or jury.

    • Social Impact

      Creating positive impact in our communities through increasing equity, access, and opportunity.

    • Women in Dealmaking

      We provide strategic counsel on complex corporate transactions and unite dynamic women in the dealmaking arena.

    1. Home
    2. Insights
    3. Alerts
    4. European Court of Justice invalidates EU-U.S. Privacy Shield, affirms Standard Contractual Clauses

      Alerts

    Alert / Data Privacy & Cybersecurity Alert

    European Court of Justice invalidates EU-U.S. Privacy Shield, affirms Standard Contractual Clauses

    July 17, 2020

    LinkedInX (Twitter)EmailCopy URL

    By Bruce Copeland and Jenny Holmes

    The European Court of Justice (ECJ), the highest court of the European Union (EU), ruled yesterday to invalidate the Privacy Shield, a commonly used legal mechanism to transfer personal data between the EU and U.S. while still complying with the EU’s General Data Protection Regulation (GDPR). This alert continues the Nixon Peabody Data Privacy and Cybersecurity Group’s coverage of U.S. and EU privacy laws and regulations.

    What was the Privacy Shield?

    The Privacy Shield, created in 2016, was an important mechanism for U.S. businesses — more than 5,300 US businesses currently rely on it to enable the valid transfer of EU personal data to the United States. The Privacy Shield was established after a 2015 ECJ ruling invalidated the previous mechanism, the Safe Harbor principles. That ruling, and yesterday’s decision, resulted from legal challenges against Facebook by Austrian privacy activist Maximillian Schrems.

    Why did the Court rule this way?

    The spirit of the Privacy Shield was to ensure that transferred data would receive equivalent protection on both sides of the Atlantic. In its opinion, the ECJ invalidated the Privacy Shield on the grounds that it did not offer EU citizens sufficient protection against U.S. government surveillance to satisfy that standard. This argument is in line with the ECJ’s arguments to substantiate the invalidation of the Safe Harbor principles.

    The imbalance of protection for EU citizens’ personal data in the U.S. was precipitated by a 2017 Executive Order signed by President Donald Trump that orders executive agencies to exclude non-U.S. persons from protections under U.S. privacy laws.

    The ECJ did not, however, invalidate the other primary mechanism for EU-U.S. data transfers: the Standard Contractual Clauses. While more cumbersome than the Privacy Shield, in that they have to be implemented on a case-by-case basis, the Standard Contractual Clauses currently are the only valid and practicable mechanism businesses can use, since binding corporate rules often require long approvals processes and other costly obstacles.

    What are the implications of this ruling for U.S. businesses?

    The ECJ judgment creates uncertainty for any business relying on the Privacy Shield. Using history as a guide, it is to be expected that a new mechanism will be created in the wake of the Privacy Shield. In the meantime, businesses should review transfers of personal data from the EU to the U.S. and make sure they are protected by the Standard Contractual Clauses, which remain valid legal mechanisms to comply with the GDPR. Valid transfers of personal data are only one step toward compliance with the GDPR, however. Full compliance with the GDPR requires a fact-intensive review of all aspects of business operations, and should be undertaken with the assistance of experienced counsel.

    Practices

    Cybersecurity & Privacy

    Insights And Happenings

    • Alert

      The new standard contractual clauses are (finally) here

      June 8, 2021
    • Alert

      A federal privacy law: What you need to know

      Nov 27, 2019
    • Article

      What’s trending on NP Privacy Partner

      June 14, 2019
    The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.

    Subscribe to stay informed of the latest legal news, alerts, and business trends.Subscribe

    • People
    • Capabilities
    • Insights
    • About
    • Locations
    • Events
    • Careers
    • Alumni
    • Cookie Preferences
    • Privacy Policy
    • Terms of Use
    • Accessibility Statement
    • Statement of Client Rights
    • Purchase Order Terms & Conditions
    • Nixon Peabody International LLC
    • PAL
    © 2025 Nixon Peabody. All rights reserved