In a long-awaited case, the ECJ will decide on 16 July 2020 whether standard contractual clauses (SCCs) are a legitimate way to transfer data to jurisdictions outside the EU, while respecting EU data protection law.

In the further course of the case, the ECJ could also rule on the validity of the Privacy Shield Agreement, the mechanism used for the transfer of personal data between the EU and the US.

A possible declaration of invalidity of the EU-US Privacy Shield Agreement would have no direct, but an indirect influence on Switzerland. Switzerland has an independent CH-US Privacy Shield Agreement with the USA. However, this agreement too could then be declared invalid with a delay.

It would not be the first time that the ECJ judges have declared an EU-US data framework invalid. The ECJ has already annulled the 2015 Safe-Harbour Agreement, which eventually led to the creation of the Privacy Shield.

Even EU Justice Commissioner Didier Reynders said on 30 June 2020 that the Commission was “preparing preparatory work on the various options that will result from the Court’s ruling”.

If the court rules in favour of Schrems in July, this move could have profound implications for the way data flows between EU and non-EU companies, forcing companies to stop such data transfers or possibly face heavy fines.

On the privacy agreement, the ECJ Attorney General stated in his December opinion that the courts should not necessarily be obliged to rule on the validity of the agreement, as the dispute in question concerns only the Commission’s definition of standard contractual clauses.

Should the privacy shield fall, a number of contracts will have to be reworked. At present, we at de la cruz beranek Rechtsanwälte AG are working on the basis of this scenario.

It is planned that the court will pronounce the judgment in case C-311/18, Facebook Ireland vs. Schrems, on 16 July 2020.If you need support in the mass renegotiation of your contracts, we are at your disposal with a team of up to 50 paralegals (see Secondment)