Brexit: It’s All About The Data

Tuesday 2 February 2021

As Brexit approached and passed, one important area of the deal was regarding how data that flows between the UK and the EU is going to be dealt with. So, what is the current legal position as we stand in the first couple of months of 2021?

Following the expired transition period on 31 December 2020, the United Kingdom now awaits the European Commission’s decision in relation to their assessment of the UK’s data adequacy. With the UK previously recognising EU rules as adequate, it’s important to note that the outcome of the Commission’s decision will specifically impact data flows relating to the UK’s ability to safely accept EU data, not vice versa.

When is the decision expected?

The decision is expected ‘in the coming weeks’, according to a senior EU official, given that the ‘bridging mechanism’ (a grace period provided for by the UK-EU Trade and Cooperation Agreement) is due to expire at the end of April 2021, albeit  with the provision for a two month extension period, if required. Currently the UK are continuing to apply EU rules, during the grace period, until a decision has been reached.

What are the consequences of an inadequate ruling for the UK?

Bruno Gencarelli, the Commission’s head of international data flows and protection, stated that if the Commission decides against UK adequacy, ‘we would fall back to the situation which is a default with any other country in the world.’ This would essentially require the use of an alternative foundation to export data to the UK safely, such as standard contractual clauses. This could lead to companies incurring extra costs, with EU based companies contracting internally to avoid these, as a result.

What is the likely outcome of the Commission’s decision?

This currently appears to be uncertain, with speculation that legal challenges will arise regardless of the Commission’s final decision. It is reported that the UK government has provided the Commission with enough ‘stand up’ evidence to deal with this situation should it occur.

Regardless of this, the Commission may rule otherwise, following previous criticisms which have arisen in view of UK regimes in this area, in order to avoid an influx of complex legal cases. For instance, Sergey Lagodinsky, a German MEP, stated that he anticipates ‘huge problems with transfers of data to the UK and an assumption of an adequacy.’

Whilst the outcome remains ambiguous, ruling against the UK being adequate would certainly set a high adequacy standard. This would not only affect future EU adequacy rulings but could also provide complications for existing adequacy decisions.

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