European Union courts to hear case that could hobble Facebook

European Union courts to hear case that could hobble Facebook
© Greg Nash

The European Union courts will hear a case with a massive impact on Facebook and other American internet service companies.

The case, which an Irish court on Tuesday referred to the Court of Justice of the European Union, revolves around where companies can store personal information.

Max Schrems is suing Facebook under the claim that, so long as the United States allows bulk surveillance programs, the U.S. cannot guarantee that data stored on servers located on its shores abides by the E.U.’s stringent personal data protections laws.

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Currently, Facebook and other companies use what are known as “standard contractual clauses” to assure European users that their personal information is being protected.

Schrems launched a similar case against an earlier treaty between the United States and European Union to cover cross-border data storage known as Safe Harbor, which the European courts eventually nixed.

Safe Harbor was replaced by a new treaty, Privacy Shield, which is undergoing similar challenges.

If courts continue to find U.S. protections for European citizens' data insufficient, it could result in U.S. internet service companies being unable to do business with Europe without setting up specialized servers there.