LONDON—The European Union’s top court ruled Thursday that an agreement that allows thousands of companies—from tech giants to small financial firms—to transfer data to the United States is invalid because the American government can snoop on people’s data.
The ruling to invalidate Privacy Shield will complicate business for some 5,000 companies, and it could require regulators to vet any new data transfers to make sure Europeans’ personal information remains protected according to the EU’s stringent standards.
