The future of international data transfers: managing legal risk with a ‘user-held’ data model

Abstract

The General Data Protection Regulation (GDPR) contains a blanket prohibition on the transfer of personal data outside of the European Economic Area (EEA) unless strict requirements are met. The rationale for this provision is to protect personal data and data subject rights by restricting data transfers to countries that may not have the same level of protection as the EEA. However, the ubiquitous and permeable character of new technologies such as cloud computing, and the increased inter-connectivity between societies, has made international data transfers the norm and not the exception. The Schrems II case and subsequent regulatory developments have further raised the bar for companies to comply with complex and, often, opaque rules.

Many firms are, therefore, pursuing technology-based solutions in order to mitigate this new legal risk. These emerging technological alternatives reduce the need for open-ended cross-border transfers and the practical challenges and legal risk that such transfers create post-Schrems. This article examines one such alternative, namely a user-held data model. This approach takes advantage of ‘personal data clouds’ that allows data subjects to store their data locally and in a more decentralised manner, thus decreasing the need for cross-border transfers and offering end-users the possibility of greater control over their data.

Keywords: GDPR, cross-border data transfers, new Standard Contractual Clauses, personal data clouds, user-held data model, Schrems II

JEL Classification: K00, K1, K10, K2, K20, K29, K33