The European Union's top court said in a written opinion Wednesday that parts of a deal between the EU and Canada on sharing airline passenger data breaches citizens' privacy and the agreement cannot be concluded in its current form.
The written opinion issued by the Court of Justice of the European Union was a setback to attempts to share airline data in the fight against extremism.
"Today's ruling may have far-reaching consequences," said Sophie in 't Veld, a centrist Dutch European lawmaker who had raised questions about the deal's impact on privacy. She said similar arrangements with the United States on passenger and banking data could now face legal challenges.
"Today's ruling shows that anti-terror laws are all too often made in haste, but are then unable to pass judicial review," In 't Veld added. "Privacy rules and fighting terrorism do not have to contradict one another, but laws must be made with due observance of European standards and values."
The court said that transferring passenger data from the EU to Canada and the possibility that the information could be shared with others "entail an interference with the fundamental right to respect for private life."
The EU and Canada signed the agreement in 2014, but the European Parliament subsequently referred it to the court for a ruling on whether it was compatible with EU privacy laws.
When the EU court issues an adverse opinion on an agreement, the deal cannot enter force until it—or treaties it is seen as breaching—are revised.
The EPP Christian Democrats, the biggest group in the European Parliament, cast the court's ruling as approving the deal in principle while calling for elements covering sensitive data to be reworked.
Axel Voss, a lawmaker in the EPP group, called the deal "an important building block" in the fight against "terrorism and serious cross-border crime."
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