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The earlier framework, called "Safe Harbor," was thrown out by the EU's highest court, the Court of Justice of the European Union (CJEU), largely because of NSA spying on data flows.
Privacy Shield was hurriedly cobbled together because, without it, the vast flows of data across the Atlantic that occur all the time would be much harder to square with EU laws.
Although there are still some procedural matters to be settled first, largely to do with whether DRI has standing to bring this legal action, the case is considered a serious enough challenge to the Privacy Shield framework that the US government is getting involved directly: As the article from the Irish Times explains, the US is not alone: also keen to see the framework upheld are the British, Dutch, and French governments, as well as Microsoft and the Business Software Alliance, all of whom have applied separately to join the action.