Meta gears up for fine and ban in clash over EU-US data transfers

By Stephanie Bodoni

Meta Platforms Inc. is poised to be hit with a fine and a ban on using unsafe contractual clauses to underpin transatlantic data transfers, in an escalation of a legal battle that once prompted the social media giant to threaten a total withdrawal from the European Union.
 

The Irish Data Protection Commission, the main EU privacy watchdog in charge of Meta’s Facebook, will announce the decision next month, the company said in its quarterly report. 

“It is expected that in addition to the transfer suspension order,” the Irish authority will be ordering Meta to bring its processing in line with the EU’s General Data Protection Regulation and “and imposing a fine,” Meta said. “Once the final decision is issued, we will have an opportunity to appeal and seek a stay.”

The Irish order will land amid a legal vacuum for thousands of companies since 2020, when the EU’s top court annulled an EU-US pact regulating such data flows over fears of US spying on EU user data. The EU in December took a big step toward ending the uncertainty that’s imperiled transatlantic data flows worth billions of dollars, following months of negotiations with the US, which yielded an executive order by President Joe Biden and US pledges to ensure that EU citizens’ data is safe once it’s shipped across the Atlantic. But, the US first needs to implement the executive order before the new data flows pact can take effect.

While the suspension order by the Irish watchdog would affect only Facebook, it would send a signal to thousands of companies that depend on similar data flows that they could be next. 

Meta said in its filing, dated April 26, that it expects the Irish order to include a transition period and that it won’t have to comply until the fourth quarter of 2023.

The controversy over data transfers dates back to 2013 when Edward Snowden exposed the extent of spying by the U.S. National Security Agency. While the use of another tool was upheld, the EU top court’s doubts about American data protection also made this a shaky alternative. From day one, the Irish data watchdog cast doubt on the legality of this alternative tool, which is at the heart of the Meta probe.