Privacy Shield Principles
The Privacy Shield Principles include seven commonly recognized Privacy Principles, agreed to by the U.S. Department of Commerce and the European Commission, governing the processing of personal data of EU individuals pursuant to the EU-U.S. Privacy Shield Framework. They should be read in conjunction with sixteen equally binding Supplemental Principles that augment and expand upon them.
Seven Promises to Protect Individual Privacy
In order to process personal data received from European Union and EEA countries (and the United Kingdom), participating organizations in the United States must publicly commit to comply with the seven core Privacy Shield Principles and sixteen equally binding supplemental principles. The core principles are summarized below.
- Choice. Participating organizations must provide a mechanism for individuals to opt out of having personal information (a) disclosed to a non-agent third party or (b) used for a materially different purpose other than that for which the information was originally provided (or subsequently authorized by the individual). When sensitive information is involved, opt-in consent is required before information may be shared with a third party or used for a new purpose.
- Onward Transfer. The substantive requirements for sharing personal information under Privacy Shield depend on the type of third-party that receives the information.
a. To transfer personal information to a third party acting as a data controller, a participant must first comply with the Notice and Choice Principles. It must also enter into a contract with the third-party controller limiting the purposes for which the data may be processed and ensuring that the recipient will provide the same level of protection as the Principles.
b. To transfer personal data to a third party acting as an agent (such as a service provider), an organization has additional obligations. It must: transfer the data for limited and specified purposes; ascertain that the agent is obligated to provide at least the same level of privacy protection as required by the Principles; take reasonable steps to ensure that the agent effectively processes this data in a manner consistent with Principles; upon notice, take reasonable steps to stop and remediate unauthorized processing; and upon request, provide a summary or copy of privacy provisions of its contract with the agent to the Department of Commerce. The organization will remain liable under the Privacy Shield Principles if its agent processes such personal information in a manner inconsistent with the Principles, unless the organization proves that it is not responsible for the event giving rise to the damage.
Table: Privacy Shield choice and accountability requirements by type of third party with which personal data is shared
|Opt-out Choice||Opt-in Choice||Accountability for Onward Transfer|
|Agent||No requirement to provide an opt-out for transfers to third parties acting as agents (but must enter into a contract with the agent consistent with Onward Transfer Principle, including requiring agent to cease processing on request).||For sensitive data, must obtain affirmative express consent prior to sharing (unless an exception applies).||Liable if agent processes data in a manner inconsistent with the Principles, unless company proves it is not responsible for the event giving rise to the damage.|
|Required to provide an opt-out (clear, conspicuous, and readily available) for transfers to non-agent third-parties.||For sensitive data, must obtain affirmative express consent prior to sharing (unless an exception applies).||No similar requirement of liability, but must still enter into a contract consistent with the Onward Transfer Principle.|
- Security. An organization creating, maintaining, using or disseminating personal data must take reasonable and appropriate measures to protect it from loss, misuse and unauthorized access, disclosure, alteration, and destruction, taking into “due account” the risks involved in the processing and the nature of the personal data.
- Data Integrity and Purpose Limitation. An organization must take reasonable steps to limit processing to the purposes for which it was collected, and to ensure that personal data is reliable for its intended use, accurate, complete, and current. It must only retain personal information for as long as needed for the purpose of collection. An organization must adhere to the Privacy Shield Principles for as long as it retains such information.
- Access. An organization must provide a mechanism by which data subjects may request access to personal information the organization holds about them and enable them to correct, amend, or delete information that is either (a) inaccurate or (b) processed in violation of the Principles.
- Recourse, Enforcement and Liability. This Principle addresses three topics: recourse for individuals affected by non-compliance; consequences to organizations for non-compliance, and compliance verification.
a. Individual Recourse: Organizations may subscribe to “readily available and affordable independent recourse mechanisms” such as BBB EU Privacy Shield to resolve complaints from EU individuals that the parties were unable to resolve on their own. These dispute resolutions services must be provided at no cost to the individual data subject. Privacy Shield organizations and their independent dispute resolution body must respond promptly to inquiries and requests by the Department of Commerce, which is obligated to pass along complaints referred by EU DPAs. EU residents have the option of filing complaints directly with their local DPA, which will work with the Department of Commerce and the Federal Trade Commission (FTC) to investigate and resolve complaints. As a last resort, for complaints left unresolved by all other available mechanisms, individuals may invoke binding arbitration before the Privacy Shield Panel, consisting of a pool of 20 arbitrators designated by the Department of Commerce and the European Commission.
b. Consequences for Non-Compliance: In addition to enforcement by the FTC (or Department of Transportation) for its own privacy violations, an organization also remains liable for its agents’ (service providers) failure to comply with the Principles unless the organization can show it was not responsible for the event giving rise to the violation.
c. Compliance Verification: Organizations must verify their compliance with Privacy Shield, either through a documented internal self-assessment process or by engaging a third-party verifier. Organizations must keep records of the implementation of their Privacy Shield privacy practices and make them available to enforcement agencies in the course of an investigation.
So long as an organization retains Privacy Shield data, it must affirm its compliance to the Department of Commerce on an annual basis. Even if the organization withdraws from the Privacy Shield Framework, it must continue to treat data collected during the time of its self-certification consistent with the Privacy Shield Principles. Alternatively, the organization must either return or delete the information.