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Financial Services Law Insights and Observations

FTC continues to enforce Privacy Shield

Privacy/Cyber Risk & Data Security FTC Courts GDPR European Union EU-US Privacy Shield

Privacy, Cyber Risk & Data Security

On August 5, the FTC Commissioners testified before the Senate Committee on Commerce, Science, and Transportation and discussed, among other things, the agency’s continued enforcement of the EU-U.S. Privacy Shield, despite the recent Court of Justice of the European Union (CJEU) invalidation of the framework, and their interest in federal data privacy legislation. As previously covered by InfoBytes, in July, the CJEU determined that because the requirements of U.S. national security, public interest and law enforcement have “primacy” over the data protection principles of the EU-U.S. Privacy Shield, the data transferred under the EU-U.S. Privacy Shield would not be subject to the same level of protections prescribed by the EU General Data Protection Regulation, and thus, declared the EU-U.S. Privacy Shield invalid.

In his opening remarks, Commissioner Simons emphasized that the FTC will “continue to hold companies accountable for their privacy commitments, including privacy promises made under the Privacy Shield,” which the FTC has also noted on its website. Additionally, Simons urged Congress to enact federal privacy and data security legislation, that would be enforced by the FTC and give the agency, among other things, the “ability to seek civil penalties” and “targeted [Administrative Procedures Act] rulemaking authority to ensure that the law keeps pace with changes and technology in the market.” Moreover, Commissioner Wilson agreed with a senator’s proposition that the enactment of a preemptive federal privacy framework would make “achieving a future adequacy determination by the E.U. easier.”

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