In a surprise win for privacy advocates, the European Court of Justice has ruled companies will face restrictions on storing information about European Union (EU) residents on U.S. servers, The Wall Street Journal reported.
The top court of the 28-nation bloc ruled the transfer of personal data to platforms in the U.S. puts Europeans at risk to American government surveillance without a right to challenge it.
The decision on Thursday (July 16) ends a data transfer agreement between the EU and the U.S. The court’s action is seen as a victory for activists who have insisted that the U.S.’s surveillance practices should put an end to storing personal information about Europeans, The Journal reported.
As a result of the court’s decision, thousands of global companies who do business in Europe and the U.S., including Facebook Inc., Alphabet Inc.’s Google and Apple Inc. will face a potential disruption of their operations.
For example, depending on how the decision is applied, the ruling could be an expensive one. Companies will have to choose between whether to move personal data to servers in Europe or stop doing business in the region.
Tech advocates have said the court’s ruling to prohibit data transfers to the U.S. could cost these companies billions in trade from their cross-border data activities, including cloud services, marketing and advertising and human resources, The Journal reported.
In the Digital Identity Tracker this week, PYMNTS reported that keeping patients’ medical information safe remains a priority for governments and regulators around the world — and that the pandemic is making the task even more complicated.
The European Court of Justice’s ruling comes as the healthcare sector is debating security best practices as medical providers and consumers shift to digital channels to minimize the virus’s spread.
Security standards fragmentation and differences in how hospitals handle patients’ data have become more evident during the health crisis.
There are concerns regarding how to best safeguard the information being shared on these channels, however, especially as healthcare fraud now accounts for about $300 billion in annual industry losses.