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The Privacy Advisor | EU-US data transfer deal still work in progress, despite new alliance Related reading: What’s behind the EU’s new Cloud Code of Conduct?




U.S. President Joe Biden and European Commission President Ursula von der Leyen have put pen to paper on the establishment of a new EU-U.S. Trade and Technology Council, pledging to foster greater synergies in areas including artificial intelligence, green tech, and security. But on the key issue of establishing a new trans-Atlantic data transfer accord, talks this week did not break the deadlock.

Ahead of the EU-U.S. summit in Brussels Tuesday, rumors had surfaced suggesting the U.S. administration would pitch a deal designed the bridge the impasse on the thorny issue of trans-Atlantic data flows. The two parties have been mired in tough negotiations ever since the Court of Justice of the European Union annulled the EU-U.S. Privacy Shield agreement last year.

Talks not yet ‘matured’ enough

Yet, following a meeting between the European Commission’s Vice-President Věra Jourová and U.S. Secretary of Commerce Gina Raimondo, there appeared to be little in the way of a deal in sight this week. The former said that the EU was still "committed" to charting a solution for trans-Atlantic data flows, in respect of the CJEU’s decision.  

One source close to the negotiations not authorized to speak on the record told The Privacy Advisor that “the talks are not yet at the level of maturity to yield any substantial progress.” The comments came despite a statement released earlier this year from the office of U.S. Commerce Secretary Gina Raimondo and European Commissioner for Justice Didier Reynders, in which the pair committed to intensifying negotiations on a new Privacy Shield agreement.  

This was to be expected. For many months in Brussels, the privacy community has been told by Reynders that a third iteration of an EU-U.S. data transfer accord would be long in the making. On Thursday, the Belgian however did tell an event hosted by MLex that an agreement may be in the offing this year.  

EU-U.S. Trade and Technology Council

The subject of data wasn’t entirely discounted from the new EU-U.S. Trade and Technology Council announcement this week. The new formation, which will serve as a platform to coordinate approaches to digital policy and economic relations, will meet periodically, being co-chaired by the EU’s Vice-Presidents Margrethe Vestager and Valdis Dombrovskis, alongside U.S. Secretary of State Antony Blinken, Secretary of Commerce Gina Raimondo, and U.S. Trade Representative Katherine Tai.

“The TTC is a joint commitment to strengthen our technological and industrial leadership and expand bilateral trade and investment,” a statement from Dombrovskis read.

From the U.S. side, there is a keen interest in ensuring that Europe maintains what it regards as a healthy distance from China’s tech influence, but there is also a judicious eye on the development of EU digital policy in Brussels. This point was so much so that in a joint statement published after the summit, the parties felt it necessary to clarify that the cooperation and exchanges within the TTC “will be without prejudice to the regulatory autonomy” of both sides, and “will respect the different legal systems in both jurisdictions.”

The fact this admission needed to be made perhaps suggests that the TTC is likely to be used as a forum for the U.S. to raise their concerns on how the regulatory approach of the EU in digital policy could harm, or be of benefit to, the U.S. digital economy.

The TTC envisages the establishment of ten working groups, including formations on data governance, the misuse of technology threatening security, and cooperation on the development of compatible and international standards.

If the narrative from the U.S. business lobby in Brussels is anything to go by, there is still a keen interest in ensuring that the value of trans-Atlantic data transfers is duly appreciated by members of the TTC. A study from the U.S. Chamber of Commerce to the EU this week found that trans-Atlantic cable connections are the densest and highest capacity routes in the world, with the highest traffic. Estimates pitch a 38% compound growth rate until 2025.

U.S. interest in EU Data Governance Act?

In this vein, U.S. representatives may very well seek to use the TTC to air their views on the EU’s Data Governance Act, which the commission unveiled last November. Broadly speaking, the plans aim to facilitate greater sharing of non-personal and industrial data across the EU, laying the groundwork for the conditions under which public sector data can be re-used, and lowering transfer costs for business-to-business and consumer-to-business data.

Prior to the publication of the DGA, there were concerns that the plans could lead to data localization requirements for non-personal data in the EU. In the final text, however, this was not to be. Further, the commission’s proposal pitches the establishment of data intermediaries – which are tasked with acting as a go-between between parties for the exchange of non-personal data. There is no requirement in the proposal for such intermediaries to be European, despite there being strict neutrality conditions regarding their operation.

Both data governance and international convergence are two subjects to be covered in the new TTC working groups. While negotiations on a new regime for the trans-Atlantic transfer of personal data rage on, there is the very real possibility that the U.S. has a continuing interest in the European non-personal and industrial data economy. It is here in which Washington will home in on the DGA and look for ways in which it can benefit from the European industrial data economy.

The U.S. is also likely to use the TTC to provide feedback on the EU’s regulation on AI. In this policy area, 2020 saw the U.S. Office of Science and Technology Policy release a statement calling on Europe to “avoid heavy-handed innovation-killing models,” opting instead for a softer regulatory regime. The Biden administration is likely to follow a similar narrative to Trump’s, and the TTC does foresee the establishment of a working group on technology standards, of which AI is a part.

Outside of this space, there is clear interest from the U.S. in the EU’s Digital Services Act and the Digital Markets Act. The former, when eventually adopted, will introduce a new regulatory regime for online content, while the latter focuses on realigning fairness and contestability in online markets, with the imposition of new obligations for the platform economy. In the data space, the DMA as it currently stands introduces a prohibition on platforms from using data gathered on their core service to offer other services in competition with rivals.  

However, before the synergies at play within the TTC lead to any direct influence on policymaking in the data space, it will first be an exercise in geopolitical diplomacy between the EU and the U.S., warding off China’s tech influence in Western economies.

This will be most evident in the market for microchips, following global shortages resulting from Washington’s own stand-off with Beijing, as well as the COVID-19 pandemic. The European Commission's von der Leyen told reporters in Brussels this week that both parties would work towards ensuring supply chains are kept open and secure in the current global context, and that this would be a particular priority area for TTC members to commence work on.

Photo by NASA on Unsplash

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