Brussels (AFP) - The EU's top court is set to rule Tuesday on a transatlantic data deal, relied on by companies such as Facebook, a judgement that could see it declared invalid given spying revelations in the Edward Snowden scandal.

The landmark case before the European Court of Justice in Luxembourg stems from a complaint against social media giant Facebook lodged against Irish authorities by Austrian law student Max Schrems.

The complaint focuses on the "Safe Harbour" deal signed in 2000 between Brussels and Washington that allows data transfers by thousands of businesses on the grounds that US laws offer similar protection for data as those in the 28-nation European Union.

But the top legal counsel to the court said last month the mass surveillance of data by the US revealed by former US intelligence contractor and whistleblower Snowden means European citizens' privacy could no longer be guaranteed by the agreement.

The court usually follows the advice of its advocate-general when reaching its final decisions.

In case it agrees the deal is invalid, the European Commission -- the executive arm of the EU -- is widely expected to announce the imminent agreement of a new version of the Safe Harbour pact.

The United States fired back against the EU counsel's position last week, saying it was based on "inaccurate assertions".

The case comes amid widespread tensions between Brussels and Washington on issues of regulation, with several EU anti-trust probes currently underway into US tech firms.

"The United States does not and has not engaged in indiscriminate surveillance of anyone, including ordinary European citizens," the US mission to Brussels said in a statement last week.

"We fully respect the European Union's legal process; however, we believe that it is essential to comment in this instance because the Advocate General's opinion rests on numerous inaccurate assertions about intelligence practices of the United States."

- David and Goliath -

Schrems, a right-to-privacy campaigner in his native Austria, filed the case against Ireland's data protection authority because Facebook's European headquarters are based there.

Major US web giants including Facebook and Apple have set up headquarters in Ireland to take advantage of favourable tax laws. Facebook data is then transferred to servers in the United States.

The Austrian argues that the 15-year-old Safe Harbour deal is too weak to guarantee the privacy of European residents in the wake of details provided by Snowden.

Schrems is fighting the social network on several fronts in what his supporters see as a fight of a European David against a US Silicon Valley Goliath.

In July, an Austrian court rejected a class action case brought by Schrems and 25,000 other Facebook users, citing insufficient legal grounds.

Digital companies operating in Europe warned that the EU court could severely disrupt the growth of the digital economy on the continent.

However they say they hope the European Commission would swiftly bring in a new Safe Harbour deal to minimise the problems.

Larger companies such as Facebook generally have separate legal contracts drawn up on their data protection laws that permit them to carry on operating in the event that agreements like Safe Harbour break down.

Snowden, who remains wanted by the United States and currently lives in Moscow, opened a Twitter account this week, just days before the judgement.

His revelations showed that the US National Security Agency's PRISM programme used Silicon Valley giants Apple, Google and Facebook to gather user data.

In the wake of the scandal, the EU and Washington began talks to revamp Safe Harbour.

A European Commission spokesman said recently that they were working "tirelessly" with Washington on final details and hoped to reach a "positive conclusion" soon.