Microsoft has warned that its cloud services could fall victim to a legal vacuum due to a lack of legislation regulating transatlantic data transfers between Europe and the US. This fact prompted Meta* threaten to withdraw his services from the European Union. However, the company later denied its claims.
With the blocking of the Privacy Shield Agreement between the EU and the United States, which regulated the transatlantic transfer of information, there was legal uncertainty for companies for the first time in 2020 – the reason was European fears of possible access by American secret services to personal data EU citizens.
As Microsoft said in a recent quarterly report, the development of cloud services around the world is increasingly based on cross-border data traffic, and the lack of legal regulation in this area can lead to its transmission being blocked.
In December, European regulators took a major step toward solving an issue that threatened transatlantic data-transmission cooperation. After several months of negotiations, they received guarantees from the American authorities that the data of the Europeans on the other side of the Atlantic was safe – a preliminary agreement on this was reached in spring 2022. However, the new agreement still has to be ratified by European parliamentarians and EU supervisory authorities – the green light should be given later this year.
Microsoft’s warning came after the company reported higher-than-expected earnings last quarter, fueled by demand for enterprise cloud services and the development of AI systems.
The lack of a legal framework for data transfer is not Microsoft’s only problem. British regulators recently blocked Activision’s acquisition of Blizzard.
* It is included in the list of public associations and religious organizations for which the court made a final decision to liquidate or ban activities on the grounds provided for in Federal Law No. 114-FZ of July 25. 2002 “On Countering Extremist Activities”.