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EU and US reach data transfer agreement: ‘Good news for advertisers,’ experts say

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By Kendra Barnett, Associate Editor

July 10, 2023 | 5 min read

After a three year impasse over the transatlantic transfer of Europeans’ personal information, the EU and the US have come to a new agreement that will restore the open exchange of consumer data. It’s a welcome change for the ad industry.

EU US data map

The US and the EU have reached an agreement on transatlantic data transfers after three years / Adobe Stock

The EU and the US Monday reached an agreement on cross-border data transfers, bringing an end to a three-year stalemate over the issue. The decision restores the free flow of consumer data between the two jurisdictions – an exchange that supports much of the information economy and amounts to billions of dollars in trade. Transatlantic data transfers had been hamstrung by a 2020 decision by the EU’s highest court, the Court of Justice of the European Union, over concerns about US intelligence agencies’ access to Europeans’ data.

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The new framework, established by the European Commission in what’s known as an adequacy decision, acknowledges that the US offers sufficient protections for information about Europeans sent to entities in the US. It also establishes a handful of new rights for EU residents, including the ability to gain access to their personal data and request correction or deletion of incorrect or unlawfully handled personal data.

"The new EU-US Data Privacy Framework will ensure safe data flows for Europeans and bring legal certainty to companies on both sides of the Atlantic," said Ursula von der Leyen, president of the European Commission, Monday.

It’s a development that will come as welcome news to both privacy advocates as well as organizations that had previously relied on transatlantic data exchanges. “Businesses and diplomats alike will breathe easier now that the EU-US Data Privacy Framework has received the EU’s stamp of approval,” said Caitlin Fennessy, vice-president and chief knowledge officer at the International Association of Privacy Professionals, in a statement shared with The Drum.

Fennessy acknowledges that the decision may face legal challenges in Europe, but said that, for now, “data can flow better protected and less hindered across the Atlantic.” She also said that the time it took to reach this new agreement “suggests that no one wanted a quick and temporary fix.”

The EU-US Data Privacy Framework is likely to be especially well-received by the digital advertising industry, which has long relied on tracking consumer data for the purposes of serving targeted ads and measuring the impact of their campaigns.

“The new adequacy decision and EU-US Privacy Framework is good news for advertisers and the broader ecosystem that have eagerly awaited a solution amidst the uncertainty surrounding transatlantic data flows,” says Arielle Garcia, chief privacy officer at IPG-owned ad agency UM Worldwide. It’s particularly promising in light of the EU’s May decision to fine Facebook and Instagram parent Meta with a whopping $1.3bn fine over unlawful data transfers to the US.

Even so, Garcia, like Fennessy, notes that the framework is sure to “face challenges from privacy advocates” who believe that it doesn’t go far enough in quelling concerns about the US’ surveillance practices and consumer privacy protections.

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