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A Congressional hearing turned testy on Tuesday as lawmakers discussed the complex and sometimes arcane negotiations between US and European companies that share data across the Atlantic.

Legislators had gathered to discuss how companies should navigate the fallout from a European court decision last month that axed the 15-year-old agreement that governed how the two regions share data. But concerns about privacy 鈥� especially regarding US government surveillance 鈥� reverberated through much of the debate, with one lawmaker calling privacy issues the 鈥渆lephant in the room.鈥�

The Safe Harbor agreement 鈥� which affects how about 4,500 American companies use data collected from European citizens 鈥� has a host of implications, from how Facebook shares user data聽abroad to how multinational corporations should handle employee information. A European Union working group it has negotiated a revised Safe Harbor deal, but the final agreement could take several months.

While lawmakers from two subcommittees of the House Energy and Commerce Committee agreed Tuesday that passing a new Safe Harbor agreement was instrumental to restoring the economic relationship between the US and the EU, the debate over privacy issues appeared far less settled.

鈥淚鈥檓 in a little bit of a dilemma,鈥� said Rep. Joe Barton (R) of Texas, who co-chairs the Congressional Bi-Partisan Privacy Caucus. 鈥淚f I put my pro-business hat on, I want to renegotiate this Safe Harbor agreement as soon as possible. But if I put my privacy caucus co-chairman hat on, I think the European Union has highlighted a substantial issue, that US privacy laws aren鈥檛 as strong as they could be.鈥�

Part of the conflict was arguably by design. The European Court of Justice鈥檚 ruling was sparked by a lawsuit filed by Max Schrems, an Austrian law student who argued that European authorities should be able to investigate his claim that Facebook was exposing his data to US surveillance by passing it from servers at the company鈥檚 European headquarters in Dublin back to the US.

Companies have strongly fought back against this contention, blasting the European court鈥檚 decision as going too far and possibly leading US firms to face harsher standards than those that apply to European companies.

鈥淭here is a serious disconnect between the EU鈥檚 stated goals of spurring innovation and fostering a start-up culture and statements by some European officials about the need for IT independence and calls for data localization,鈥� said John Murphy, senior vice president for international policy at the US Chamber of Commerce, during the hearing Tuesday.

Victoria Espinel, president of the software industry trade group BSA, told lawmakers that robust security protections were already in place to prevent unauthorized data transfers. Ultimately, she says, technology firms hope the EU and the US will work toward a broad policy 鈥� beyond just a new version of Safe Harbor 鈥� that would both address privacy concerns and allow the companies to keep working in Europe.

Rep. Jan聽Schakowsky (D) of Illinois said in an opening statement that she was preparing to introduce that would provide stronger security standards on a variety of personal data that could be affected by the court鈥檚 decision, including geolocation data, health records, biometric details, and information on e-mail and social media accounts. She says she wanted to balance the likely economic impact on US companies with privacy concerns.

But other lawmakers expressed skepticism.

鈥淚s it your position that US persons and non-US persons should be treated identically with respect to government collection of surveillance data?鈥� Rep. Mike Pompeo (R) of Kansas asked Marc Rotenberg, president of the Electronic Privacy Information Center, which has advocated for stronger privacy protections for both European and American citizens.

When Mr. Rotenberg agreed, Rep. Pompeo pounced on the response.

鈥淔air enough,鈥� he said, 鈥淛ust so you know, that would be ahistoric. You could well be right about it being proper, but no nation has ever behaved that way with the collection of data for their own citizens... There鈥檚 always a wrinkle, there鈥檚 always an exception... I actually think the United States does a remarkable job of protecting citizens all around the world and protecting their data in their efforts to keep us all safe鈥�"

Rotenberg interrupted, saying, 鈥淪ir, may I ask 鈥� do you think the Office of [Personnel Management] has done an excellent job protecting the records of federal employees?" referring to the recent OPM hack that exposed a variety of sensitive information.

鈥淣o sir, there鈥檚 errors all along the way鈥斺�� Pompeo responded, but Rotenberg jumped back in.

鈥淭wenty-one and a half million records 鈥� SF 86s 鈥� those are the background investigations for federal employees,鈥� he said.

鈥淚 filled one out, I think mine was released as well, sir, so I鈥檓 infinitely familiar with that, I鈥檓 simply asking about policy,鈥� Pompeo said, before moving on to another question.

Later, Rotenberg pointed to the large scale opportunity offered to regulators to address privacy issues through the European court鈥檚 decision.

鈥淧rivacy really does cross the aisle,鈥� he said. 鈥淚t鈥檚 also important in the context of this hearing to understand that there鈥檚 a difference between the political dimension of negotiations ... and a judicial decision by the top court in Europe."