On Wednesday, December 9, the Senate Commerce, Science and Transportation Committee held a hearing titled “The Invalidation of the EU-U.S. Privacy Shield and the Future of Transatlantic Data Flows.” During the hearing, both Chairman Roger Wicker (R-MS) and Ranking Member Maria Cantwell (D-WA) underscored the need to assess how United States businesses can confidently conduct data transfers in compliance with EU laws as negotiations continue to replace the EU-U.S. Privacy Shield agreement.
The hearing included testimony from James Sullivan, Deputy Assistant Secretary for Services at the International Trade Administration (ITA), who indicated that all teams in the ITA's Office of Digital Services Industries have met, on multiple occasions, with members of the Biden-Harris transition team, and have prepared a transition memorandum on the state of play around the Privacy Shield. Peter Swire of the Cross-Border Data Forum emphasized the need to negotiate a short-term deal, potentially for one year, before January 20, that would expire and meet the goals of both the EU and U.S.
Members also emphasized the need to assess how a comprehensive federal privacy law could assist efforts to develop a successor data transfer framework. Given California's passage of Proposition 24, the California Privacy Rights Act of 2020 (CPRA) ballot initiative, Sen. Richard Blumenthal (D-CT) expressed optimism that the 117th Congress can make “significant progress” on privacy. Ranking Member Cantwell expressed commitment to resolving issues between her and Chairman Wicker's own privacy proposals next year.
Members on both sides of the aisle, such as Sens. Marsha Blackburn (R-TN) and Gary Peters (D-MI), expressed concern that elimination of the Privacy Shield could result in the global adoption of data localization. Moving forward, there was general consensus among Members and witnesses that the U.S. must work towards a long-term goal of addressing underlying intelligence gathering issues and work toward building consensus among like-minded countries.
Originally Published by Akin Gump, December 2020
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