Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Sarah Grillo/Axios

An adviser to Europe's highest court told its judges Thursday to uphold the contractual terms that Facebook and other companies rely on to transfer billions of dollars worth of data on Europeans to other countries.

Why it matters: The case's outcome will not only determine whether companies need to rethink how they protect users' privacy and data, but could also shape a deeper transatlantic divide for the internet.

Driving the news: The European Commission-backed model agreements that companies use to protect users' privacy in data transfers are "valid," wrote European Court of Justice advocate general Henrik Saugmandsgaard Øe in an advisory opinion, a non-binding recommendation that the court follows the vast majority of the time.

Yes, but: The opinion said regulators should still force companies to halt transfers under certain circumstances and raised questions about a key U.S.-EU agreement on data flows.

Where it stands: A final ruling in line with the opinion that the contracts are valid could reassure U.S. companies.

  • But Saugmandsgaard Øe leaves the door open to European regulators blocking data transfers because they think U.S. surveillance practices conflict with EU privacy standards.
  • And if the court picks up questions he raised around the EU-U.S. Privacy Shield and finds it invalid, there would be major repercussions for the thousands of companies who rely on that agreement to freely transfer data, ranging from payroll information to European customer records.
  • "We are talking about billions and billions of dollars worth of commerce that relies on that transatlantic data flow," Aaron Cooper, vice president at BSA | The Software Alliance, said ahead of the opinion's release. "It is about every industry sector."

The big picture: Europe has sought to set the global standards on online privacy, with strict data safeguards that contrast with the United States' historically laissez-faire approach. The pending court ruling represents a judgment before the world of how people's data gets handled in the U.S.

Details: The European Court of Justice, the EU's supreme court, is weighing whether model agreements with U.S. companies meant to protect Europeans' privacy abroad are up to snuff.

  • The case stems from a complaint against clauses in Facebook's data contracts, brought by European privacy advocate Max Schrems.
  • The European Commission has endorsed the so-called standard contractual clauses, but Schrems argued the Facebook clauses do not adequately protect Europeans from government surveillance in the U.S.
  • He said he is "generally happy" with the advisory opinion, noting that he did not want to disturb the thousands of contractual agreements in place globally. "Everyone will still be able to have all necessary data flows with the US, like sending emails or booking a hotel in the US," Schrems said in a statement. "Some EU businesses may not be able to use certain US providers for outsourcing anymore, because US surveillance laws requires these companies to disclose data to the NSA."
  • Facebook associate general counsel Jack Gilbert said the company is grateful for the opinion. "Standard contractual clauses provide important safeguards to ensure that Europeans’ data are protected once transferred overseas," Gilbert said in a statement.

Flashback: You might remember Schrems from launching the case that upended the previous agreement that governed data flows between the U.S. and Europe, the Safe Harbor.

  • Responding to U.S. government data collection practices exposed by NSA contractor Edward Snowden, Schrems filed complaints against several U.S. companies that led to the European high court declaring the Safe Harbor invalid in 2015.
  • U.S. companies scrambled to set up alternative arrangements while the U.S. and Europe hammered out a new agreement, 2016's Privacy Shield.

Now, the Privacy Shield faces a major test, and court watchers have been worried it will not pass.

  • The main question before the European court is whether the standard contractual clauses adequately protect privacy, but a lot of the questions posed by the court relate to Privacy Shield, so the final ruling could affect both.
  • The advisory opinion says the court shouldn't weigh in on Privacy Shield, but also raises concerns about the adequacy of the agreement for protecting Europeans privacy.
  • In particular, Saugmandsgaard Øe questioned Privacy Shield's reliance on a U.S.-appointed ombudsperson to resolve Europeans' complaints about how their data gets handled, including by American intelligence agencies. He's not sure a single ombudsperson is sufficient—or sufficiently independent from U.S. government interests—to give proper redress.

Reality check: The advisory opinion is just that — advisory. The high court often goes along with it, but that's not always the case.

What's next: The final ruling is expected sometime in the first half of 2020.

  • The Electronic Privacy Information Center has sided with Schrems in the case, warning that the U.S. has not done enough to correct the problems revealed by Snowden.
  • EPIC President Marc Rotenberg said earlier this week the U.S. needs to pass comprehensive privacy legislation and create a data protection authority to address the issues "The U.S. actually has to do more to improve privacy standards within the US, which is ultimately what will satisfy Europe and benefit consumers," Rotenberg said.

Editor's note: This story has been updated with a different quote from EPIC's Marc Rotenberg.

Go deeper

Kendall Baker, author of Sports
14 mins ago - Sports

European soccer is at war

Liverpool celebrating its 2019 Champions League victory. Photo: Nigel Roddis/Getty Images

Europe's biggest soccer clubs have established The Super League, a new midweek tournament that would compete with — and threaten the very existence of — the Champions League.

Why it matters: This new league, set to start in 2023, "would bring about the most significant restructuring of elite European soccer since the 1950s, and could herald the largest transfer of wealth to a small set of teams in modern sports history," writes NYT's Tariq Panja.

Dion Rabouin, author of Markets
42 mins ago - Economy & Business

2021's expected earnings blowout begins

JPMorgan CEO Jamie Dimon. Photo: Mark Kauzlarich/Bloomberg via Getty Images

First-quarter earnings so far have been very strong, outpacing even the rosy expectations from Wall Street and that's a trend that's expected to continue for all of 2021. S&P 500 companies are on pace for one of the best quarters of positive earnings surprises on record, according to FactSet.

Why it matters: The results show that not only has the earnings recession ended for U.S. companies, but firms are performing better than expected and the economy may be justifying all the hype.

43 mins ago - Science

NASA's Mars helicopter takes flight as first aircraft piloted on another planet

Ingenuity on the surface of Mars, filmed by NASA's Perseverance rover. Photo: NASA Jet Propulsion Laboratory

NASA successfully piloted the Ingenuity Mars helicopter for its first experimental flight on Monday, briefly hovering the aircraft as NASA's Perseverance rover collected data.

Why it matters: Ingenuity's short flight marks the first time a human-built aircraft has flown on a world other than Earth, opening the door to new means of exploring planets far from our own.

You’ve caught up. Now what?

Sign up for Mike Allen’s daily Axios AM and PM newsletters to get smarter, faster on the news that matters.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!