Many organizations are increasingly uncertain about the legislation and regulation of data migration between the United States and the European Union. That’s what the Wall Street Journal concludes in a recent article.

According to the business medium, more and more companies are wrestling with the practicality of compliantly moving data between the US and the EU. In particular, US companies are questioning the extent to which stricter European data privacy regulations might limit their operations in the EU.

Stricter EU legislation

In the past year, the EU introduced regulations that prohibit certain companies from using US tech companies to store and process data. The purpose is to ensure the privacy of EU residents. The Wall Street Journal finds these regulations add an excessive, confusing factor to the process of data traffic between the US and EU.

The crux of the matter is that the US and EU have yet to negotiate a successor to the Privacy Shield agreement. Privacy Shield was introduced in 2016 to protect the personal data of European Union citizens processed in the United States. In mid-2020, this agreement was annulled by Europe’s Court of Justice, the highest court in the EU.

According to legislators, data exchange rules imposed by the Privacy Shield did not comply with GDPR regulations. Among other things, US authorities remained able to access data stored on European soil. Furthermore, the European Court of Justice secured that European privacy laws remain standard when data on EU residents is processed or stored abroad.

Privacy Shield successor long overdue

Since its annulment, the US and the EU have been negotiating a successor — without much success. The Wall Street Journal says that problems among companies are increasing as a result.

In addition, the Wall Street Journal indicates that the lack of clear (privacy) legislation means that successive European regulations are making it increasingly difficult for American tech companies to provide their services in the EU. In the past year, many agencies from EU countries have terminated their services with tech companies because of insufficient methods to transfer data conform to EU laws and regulations.

The business newspaper calls for transparency on the timeframe with which the US and the EU will reach a new agreement. Without clarity, it fears that problems for US companies doing international business will increase.