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The European Court of Justice declared the 2000 “Safe Harbor” agreement between the United States and the European Union invalid on October 6. This is important because the agreement allowed U.S. tech firms to transfer large amounts of data from European users to American servers. The lawsuit first came to light when Max Schrems, an Austrian law student, noticed that “Facebook transfers his personal data to the U.S., where it can be accessed by authorities with little respect for his privacy.” Many companies such as Facebook, Google, Amazon, and Twitter are left in a sort of “legal limbo”, as described by The New York Times. This essentially means that large tech companies, like those aforementioned, can no longer transfer such data to the United States.
So what does this mean for the global market? All of the previously mentioned companies’ stocks are down today, with losses ranging from 1% - 2.5%, and this could just be the tip of the iceberg. The global impact also is reflected in everyday users in the E.U., who are rejoicing at the fact that user data will not be looked at without their consent in a foreign country. Even Edward Snowden tweeted at Max Schrems, stating that “you’ve changed the world for the better”. The public opinion of these companies has a great deal to do with how successful they are in the global market, and with the growth of users stagnating for some companies, this could be worrisome. This ruling was heavily supported by the E.U.’s very broad definition of privacy, which includes any info “relating to an identified or identifiable natural person”. This broad definition can cover almost anything regarding a single person, which has been a big sticking point for the overturning of the agreement.
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