DPF vs. SCCs: What Businesses Need to Know About Transatlantic Data Transfers
Transatlantic data transfers have long been one of the most complex and closely watched areas of international privacy law. For companies operating across the EU and U.S., these rules are not just legal fine print-they shape how business gets done at scale. The challenge? The rules keep changing.
With the EU-U.S. Data Privacy Framework (DPF) now in place, organizations are asking the big questions: Can I rely on the DPF? Do I still need Standard Contractual Clauses (SCCs)? What’s the risk of relying on one versus both?
This blog explores the context behind the DPF, why it matters today, and the practical considerations when choosing between DPF and SCCs.
Until recently, many questioned whether the DPF would withstand the same fate as Safe Harbor and Privacy Shield. Multiple complaints have been filed in Europe challenging its adequacy. The Latombe complaint, however, became a watershed moment. It was the first time an EU High Court upheld the validity of an EU-U.S. data transfer framework. This ruling is monumental not only because the DPF remains valid, but also because the Court’s reasoning reinforces confidence in its long-term durability.
1. Essential Equivalence For Data Protection
The European Commission acknowledged that the U.S. does not have a GDPR-style federal privacy law. But an adequacy determination from the European Commission that authorizes data transfers from the EU to the U.S. does not require the U.S. to have an identical data protection regulation. Instead, the focus is on “essential equivalence.” In practice, this means:
These elements collectively satisfied the Commission that the U.S. now provides a level of protection that is essentially equivalent to the EU.
2. Streamlined Data Transfers
The DPF is not just about legal adequacy-it’s about operational ease. As one U.S. official put it:
“The EU-U.S. Data Privacy Framework empowers businesses in the world’s largest economies to engage in efficient and streamlined transatlantic commerce.”
Already, more than 3,400 companies participate, supporting roughly $8.3 trillion in business activity. For companies trading or collaborating across the Atlantic, that’s a powerful endorsement.
3. Supporting Trade and Geopolitical Stability
The DPF has also been welcomed by trade associations and policymakers. At a time of heightened scrutiny on digital trade and security, the DPF has become an important mechanism for keeping EU-U.S. relations steady and ensuring continuity in transatlantic commerce.
Scope and Applicability
Scalability and Affordability
Transparency and Public Display
Administrative Requirements
Compliance and Enforcement
If your organization is interested in the DPF in particular, BBB National Programs is here to help. BBB National Programs serves as an independent recourse mechanism and verification provider for the DPF program. Check out our DPF Services page to learn more.
With the EU-U.S. Data Privacy Framework (DPF) now in place, organizations are asking the big questions: Can I rely on the DPF? Do I still need Standard Contractual Clauses (SCCs)? What’s the risk of relying on one versus both?
This blog explores the context behind the DPF, why it matters today, and the practical considerations when choosing between DPF and SCCs.
A Brief History: From Safe Harbor to DPF
The DPF didn’t appear out of nowhere. It’s the third iteration of a framework designed to allow lawful data transfers from the EU to the U.S.:- EU-U.S. Safe Harbor Framework (2000–2015): Struck down in the Schrems I decision for insufficient protections against U.S. government surveillance.
- EU-U.S. Privacy Shield Framework (2016–2020): Struck down in the Schrems II decision particularly due the scope of U.S. government access to personal data and insufficient redress rights for EU individuals.
- EU-U.S. Data Privacy Framework (2023–present): Built to address the shortcomings identified in Schrems II, with new commitments from the U.S. government around oversight, redress, and limits on bulk collection.
Until recently, many questioned whether the DPF would withstand the same fate as Safe Harbor and Privacy Shield. Multiple complaints have been filed in Europe challenging its adequacy. The Latombe complaint, however, became a watershed moment. It was the first time an EU High Court upheld the validity of an EU-U.S. data transfer framework. This ruling is monumental not only because the DPF remains valid, but also because the Court’s reasoning reinforces confidence in its long-term durability.
Why the DPF Is a Strong Option Now
Even amidst uncertainty in global trade, the DPF provides businesses with tangible benefits:1. Essential Equivalence For Data Protection
The European Commission acknowledged that the U.S. does not have a GDPR-style federal privacy law. But an adequacy determination from the European Commission that authorizes data transfers from the EU to the U.S. does not require the U.S. to have an identical data protection regulation. Instead, the focus is on “essential equivalence.” In practice, this means:
- A regulatory system with strong privacy protections, commercial redress, and enforcement by independent government agencies
- Safeguards for government access to personal data
- Mechanisms for judicial review and redress for surveillance-related complaints
These elements collectively satisfied the Commission that the U.S. now provides a level of protection that is essentially equivalent to the EU.
2. Streamlined Data Transfers
The DPF is not just about legal adequacy-it’s about operational ease. As one U.S. official put it:
“The EU-U.S. Data Privacy Framework empowers businesses in the world’s largest economies to engage in efficient and streamlined transatlantic commerce.”
Already, more than 3,400 companies participate, supporting roughly $8.3 trillion in business activity. For companies trading or collaborating across the Atlantic, that’s a powerful endorsement.
3. Supporting Trade and Geopolitical Stability
The DPF has also been welcomed by trade associations and policymakers. At a time of heightened scrutiny on digital trade and security, the DPF has become an important mechanism for keeping EU-U.S. relations steady and ensuring continuity in transatlantic commerce.
DPF vs. SCCs: Practical Considerations
When clients ask whether to adopt the DPF, SCCs, or both, there’s no one-size-fits-all answer. Instead, companies should evaluate based on scope, cost, transparency, and compliance obligations.Scope and Applicability
- DPF: Applies to U.S. companies subject to the jurisdiction of the Federal Trade Commission (FTC) or the U.S. Department of Transportation (DOT). Covers all personal data transfers to certified U.S. organizations.
- SCCs: Applies globally. Any organization acting as a data importer outside the European Economic Area (EEA) can rely on them.
Scalability and Affordability
- DPF: More cost-effective, especially for SMEs. Certification is straightforward and avoids lengthy legal negotiations.
- SCCs: Require detailed legal reviews, Transfer Impact Assessments (TIAs), and sometimes supplementary measures, which can drive up costs.
Transparency and Public Display
- DPF: Requires participants to publish privacy statements and appear on the public participants list maintained by the U.S. Department of Commerce (DOC)-a visible sign of compliance and accountability.
- SCCs: Obligations exist, but no public compliance list or display requirement.
Administrative Requirements
- DPF: Once certified, organizations benefit from the European Commission’s adequacy decision. Transfers are automatically covered.
- SCCs: Broader territorial scope, but data exporters must conduct and document TIAs, and regulators can review outcomes.
Compliance and Enforcement
- DPF: Requires annual recertification, overseen by the DOC. Enforced by the FTC and DOT.
- SCCs: Enforcement is primarily exporter-driven, with regulators intervening when complaints or concerns arise.
Key Takeaways for Businesses
- SMEs that primarily transfer data to the U.S. often benefit most from DPF: it’s faster, cheaper, and provides strong public transparency.
- Multinationals with complex global data flows often use both the DPF and SCCs to cover all bases, ensuring resilience in case of future legal challenges.
- For all companies, the DPF offers a renewed opportunity to demonstrate accountability, reduce friction in EU-U.S. data flows, and strengthen customer trust.
If your organization is interested in the DPF in particular, BBB National Programs is here to help. BBB National Programs serves as an independent recourse mechanism and verification provider for the DPF program. Check out our DPF Services page to learn more.