Europe's highest court on Tuesday struck down an international agreement that had made it easy for companies to move people's digital data between the European Union and the United States.

The ruling, by the European Court of Justice, could make it more difficult for global technology giants -- including the likes of Amazon and Apple, Google and Facebook -- to collect and mine online information from their millions of users in the 28-member European Union.

The court declared the data-transfer agreement, which is known as Safe Harbor, immediately invalid.


"This is extremely bad news for E.U.-U.S. trade," said Richard Cumbley, a tech lawyer at Linklaters in London. "Thousands of U.S. businesses rely on the Safe Harbor as a means of moving information. Without Safe Harbor, they will be scrambling to put replacement measures in place."

In its ruling, the court said that the Safe Harbor agreement was flawed because it allowed American government authorities to gain routine access to Europeans' online information. Such access infringes on Europeans' rights to privacy established under the region's tough data protection rules, the court said.

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