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The Impact of PRISM on International Data Flows

An exasperatingly awkward challenge affecting the current data globalisation process is the prohibition on exports of data that is present in a number of the world's data privacy laws.  This is something that European organisations have had to live with since the mid-90s, and frustratingly, the trend is being extended to other jurisdictions. Disregarding the reality of Internet and mobile communications, some policy-makers and regulators insist on building some sort of physical or at least digital fortress around the data within their jurisdiction with the aim of preventing unwanted interferences. In the most extreme cases, international data flows are only allowed under the express authorisation of a national regulator that will seek to scrutinise the safeguards in place to the finest detail.

The current data protection legislative reform taking place in Europe is an opportunity to revisit this approach in the light of what actually happens in practice: Data is no longer transferred from country A to country B—data is geographically neutral and simply flows across global networks to make itself available to those with access to it. Sometimes access will be deliberately wide—think LinkedIn—and sometimes access will be deliberately restricted—think credit card transactions. So the debate between those who think that inadequately protected data flows should be prohibited by default and those who favour a more pragmatic approach is right now at full throttle.

Enter PRISM, and the whole debate is massively distorted.

The knee-jerk reactions were to be expected. From the activist calling for the immediate revocation of the Safe Harbor framework to the politicians grandstanding in front of their constituents, furious arguments are being made in the name of privacy. More concerning, however, are the long-term effects of the revelations about a program which irrespective of its motives has already been portrayed as excessive, disproportionate and, for obvious reasons, secretive. Even level-headed EU policy-makers are now likely to pause and consider whether any specific legislative or regulatory measures should be taken to minimise the potential loss of privacy that a wholesale data collection operation—particularly by a non-EU entity or indeed a government—may entail.

In practice that means a definite tilting of the scale towards greater restrictions on international data flows. For starters, the recent and possibly further revelations about the PRISM program will make it very difficult to justify getting rid of the special treatment of international data transfers as a separate data processing activity. Quite the opposite, this will be explicitly referred to as a key reason for having jurisdictional limitations on data flows, no matter how nonsensical those limitations may otherwise be. In line with this, obtaining a so-called “adequacy decision”—an official EU-wide declaration stating that a country is a safe recipient of personal data—is set to become a rather tough process, which is a shame considering that in recent years there has been a slight—but only slight!—relaxation of the process. It is also quite conceivable that if the European Commission decides to have a go at seeking a renegotiation of Safe Harbor, this will be cited as a justification. Having said that, it will be somewhat unfair that a data collection and analysis program which is entirely motivated by national security reasons causes a raising of the bar for organisations which are completely outside the scope of the program.

Things will not end there.

Both contractual safeguards and binding corporate rules will be expected to address possible conflicts of law involving data requests for law enforcement or national security reasons in a way that no blanket disclosures are allowed. And of course, the derogations from the prohibition on transfers will be narrowly interpreted, particularly when they refer to transfers that are necessary on grounds of public interest.

All in all, it is going to take a fair amount of convincing to show that any restrictions on international data flows should be both measured and realistic. But it is also true that in the same way that we cannot stop the technological evolution of our time and the increasing value of data, we must acknowledge the borderless fluidity of digital information and accept that regulating data flows should not be about putting up barriers but about applying globally recognised safeguards.

photo credit: Florian de Brün via photopin cc

Written By

Eduardo Ustaran, CIPP/E

1 Comment

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  • Dan Or-Hof Jun 12, 2013

    Very interesting. Thanks for sharing. No doubt there is a need for global harmonization.

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