The European Court of Justice has blocked the EU-US agreement to transfer airline passenger data to the US authorities. The main reason (I have yet to read the legal judgment) is that the decision was not founded on an "appropriate legal basis." You can read more at the BBC press release. The legal action was brought by the Council and the European Commission and was based on the Data Protection Directive 95/46/EC. I have still yet to explore the implications of this decision. I don't think we will have heard the last of this. Here is a quote from the same press release.
As the executive officer of the British Air Transport Association Bob Preston told the BBC European airlines could potentially be left in a "difficult position, between a rock and a hard place". "If we don't supply the information to the United States authorities then we're liable to fines of up to $6,000 per passenger and the loss of landing rights," he said. "And if we do supply the data, potentially we're breaking the law [on data protection].
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