NSA Surveillance Deals US Tech Sector a Serious Blow in European Court Case

Press Release
Oct. 6, 2015

This morning, the Court of Justice for the European Union (CJEU, the highest ranking court in the European Union) handed down a decision in the case of Schrems vs. Data Protection Commissioner that could have serious implications both for human rights and for America’s Internet economy.

In that case, Schrems claimed that broad and unchecked surveillance, as conducted by the US National Security Agency in particular, violates the fundamental human rights of European citizens. In a huge victory for human rights and a vindication of those that have criticized the NSA’s surveillance programs, the court agreed. As a result, however, the court invalidated the EU-US safe harbor agreement that allows US companies to store EU citizens' data outside of the EU. The death of the safe harbor could present enormous problems to US companies doing business in the EU: European data protection authorities will be individually scrutinizing data transfers to the US rather than allowing companies to rely on the original safe harbor agreement’s blanket authorization. That is, unless and until a more privacy-protective safe harbor agreement is negotiated, or the US reforms its surveillance practices to address the court’s human rights concerns.

This new ruling represents yet another way that the NSA’s mass surveillance programs have threatened the US digital economy and American companies’ global competitiveness since they were revealed in 2013. As the Open Technology Institute detailed last year in its 60-page report “Surveillance Costs: The NSA’s Impact on the Economy, Internet Freedom & Privacy Security”, the costs of the NSA’s programs go far beyond their impact on personal privacy and civil liberties, costs which are rarely weighed by policymakers considering potential surveillance reforms. Some have estimated that the global response to the NSA’s programs will ultimately cost American companies many billions of dollars, a conclusion made even more likely by today’s ruling.

The following quote can be attributed to Kevin Bankston, Director of the Open Technology Institute:

Today’s decision that the NSA’s mass surveillance violates Europeans’ human rights is not only a vindication of the NSA’s critics. It is also the latest proof that the NSA’s mass surveillance programs, in addition to costing us our privacy, are also ultimately going to cost American businesses billions of dollars in lost global trust. Congress’ passage of the USA FREEDOM Act in July, aimed at ending NSA’s bulk collection of Americans’ phone records, was an important victory in the fight for surveillance reform. But only comprehensive reform of the NSA’s massive Internet surveillance programs--starting with the PRISM program accessing massive amounts of data ‘downstream’ in the Internet cloud and the ‘upstream’ spying programs accessing data directly from the Internet’s backbone--will restore international trust in US companies and protect both America’s digital economy and everyone’s human rights. America literally cannot afford for the NSA’s mass surveillance of the global Internet to continue.