EU’s ruling on safe harbor data flow to US might hit India’s IT sector


On Tuesday, the European Union took a decision to nullify the ‘safe harbor’ provision that allowed the data flow between the United States and the EU. This could have an effect on the Indian information technology sector that was also looking for a similar method as a work-around to the stringent EU’s data protection regulations.

The recent ruling does not prevent any future agreement be it partial adequacy or safe harbor type of between the European Union and India to assure the free data flow that is complaint with the former’s data protection standards.

The European Union’s Court of Justice has ruled the provision invalid. This decision was taken in a case that was filed by a citizen of Austria who raised concerns related to the protection of his personal data on the social network Facebook. As per the European Union’s Data Protection Direction, the data can be transferred between the EU and another country if it ensures a sufficient level of data protection.

Last year Mr. R Chandrashekhar, the Nasscom president termed the EU’s stringent data protection laws as a challenge. There are free speech advocates including digital rights organization Access have welcomed this ruling by the European Union.

Estelle Masse, an European policy analyst stated that this ruling confirms that the mechanism of safe harbor is beyond repair. It also puts an end to the privacy violations that existed over a decade.

The industry has experienced its concern over this decision. Susan Danger, the Managing Director of AmCham EU stated that by immediately invalidating the safe harbor, the global business can be disrupted severely. This is possible until the EU institutions as well as data protection authorities provide alternate mechanisms.


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