Meta Fined Record $1.3 Billion in EU Over US Data Transfers (1) – Bloomberg Law

Facebook owner Meta Platforms Inc. was hit by a record €1.2 billion ($1.3 billion) European Union privacy fine and given a deadline to stop shipping users’ data to the US after regulators said it failed to protect personal information from the American security services.

The social network giant’s continued data transfers to the US didn’t address “the risks to the fundamental rights and freedoms” of people whose data was being transfered across the Atlantic, the Irish Data Protection Commission said on Monday.

On top of the fine, which eclipses a €746 million EU privacy penalty previously doled out to Amazon.com Inc., Meta was given five months to “suspend any future transfer of personal data to the US” and six months to stop “the unlawful processing, including storage, in the US” of transferred personal EU data.

The ban on data transfers was widely expected and once prompted the US firm to threaten a total withdrawal from the EU. Still, the likely impact has now been muted by the transition phase and the prospect of a new EU-US data flows agreement that could already be operational by the middle of this year.

Monday’s decision is the latest round in a long—running saga that eventually saw Facebook and thousands of other companies plunged into a legal vacuum. In 2020, the EU’s top court annulled an EU-US pact regulating transatlantic data flows over fears citizens’ data wasn’t safe once it arrived on US servers.

While judges didn’t strike down an alternative tool based on contractual clauses, their doubts about American data protection quickly led to a preliminary order from the Irish authority telling Facebook it could no longer move data to the US via this other method either.

‘Flawed’ Decision

Meta said it would appeal the Irish decision, describing it as “flawed” and “unjustified.” The company also promised to “immediately” seek a suspension of the banning orders, saying they would cause harm to “the millions of people who use Facebook every day.”

The data-transfer curbs risk carving up the internet “into national and regional silos, restricting the global economy and leaving citizens in different countries unable to access many of the shared services we have come to rely on,” Nick Clegg, Meta’s president of global affairs, and Jennifer Newstead, chief legal officer, said in a blog post.

EU regulators in December unveiled proposals to replace the previous “Privacy Shield” pact that had been torpedoed by the EU’s Court of Justice. This followed 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.

Read More: EU Vows to Act If Revamped US Data-Transfer Pact Poses Problems

The crackdown on Meta coincides with the fifth anniversary of the EU’s General Data Protection Regulation, widely seen as the world’s benchmark for privacy. Since May 2018, regulators in the 27-nation EU have had the power to wield fines of as much as 4% of a company’s annual revenue for the most serious violations. The Irish watchdog morphed overnight into the lead privacy regulator for some of the biggest tech firms with an EU base in the country, such as Meta and Apple Inc.

(Updates with Meta response in sixth, seventh paragraphs)

To contact the reporter on this story:
Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net

To contact the editors responsible for this story:
Jeremy Hodges at jhodges17@bloomberg.net

Peter Chapman

© 2023 Bloomberg L.P. All rights reserved. Used with permission.