LONDON — Europe’s top court on Thursday struck down a trans-Atlantic agreement that allows scores of companies to move data between the European Union and the United States, causing uncertainty for businesses who rely on moving digital information seamlessly around the world.
The European Court of Justice in Luxembourg ruled that the agreement, known as Privacy Shield, did not comply with European privacy rights. Privacy Shield, created in 2016, allows businesses in the European Union and the United States to move date more easily between the two regions. More than 5,000 companies use the system.
The decision is the latest twist in a long-running campaign by privacy-rights activists in Europe who want to prevent companies from moving their personal information to countries with looser data protection rules. The efforts stem from the surveillance programs revealed in 2013 by the former American intelligence contractor Edward Snowden about the bulk collection of communications.
The overall effect of the court’s decision was not immediately clear beyond creating a dizzying amount of new work for corporate legal departments. Before the decision was announced, European officials played down the potential fallout, saying plans were in place to ensure commerce would not be interrupted.
An Austrian data-protection lawyer, Max Schrems, filed a complaint against Facebook, arguing his privacy rights were violated once his data was transferred to the United States, where it be would be vulnerable to American snooping.
Mr. Schrems’s case became a broader referendum on the validity of the trans-Atlantic data-transfer agreements.
This is a developing story. Please return for updates.