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This week, the Court of Justice of the European Union (“CJEU”) ruled that the EU-US Safe Harbor Decision is invalid in Case C-362/14 (the “Schrems” case).  This followed a similar opinion from its Advocate General, which also sets out the facts of the case.

The decision will impact businesses that rely on the EU-US Safe Harbor to legitimize their storage in, or access from, the US of personal data that is subject to EU data protection rules. It could affect cloud service providers, companies that use cloud services, intragroup shared services and any other export flows to the US that rely on Safe Harbor for data transfer.

In this post we look at what the CJEU decided and on what grounds, and what affected businesses should do next.

As we have written extensively, the European Court of Justice’s (ECJ’s) ruling in the Schrems case on October 6, 2015 may effectively invalidate the US-EU Safe Harbor framework. While we believe that the Advocate General’s rationale for the proposal is weak, organizations that rely on the Safe Harbor are anxious about the consequences such a decision could have on their operations, and want to make appropriate mitigation plans.

On 26 May 2015, the Dutch Senate passed the Bill on Notification of data leaks. The law imposes an obligation on “data controllers” (the persons or entitis that determine the purpose of and means for processing personal data) in the Netherlands to notify the Dutch Data Protection Authority (CBP) and affected individuals. The law may require data controllers to update agreements with their data processor to account for breach notice obligations. The law also increases fines for violations of the Dutch Data Protection Act (DPA) to up to €810,000 or 10% of the company’s net annual turnover. Both data controllers and data processors (who may be deemed “accomplices” in the breach) may be subject to the fines.