According to multiple media reports, citing sources, Facebook parent Meta is to be fined more than $800 million. The media reports said that the fine will be levied for the company’s failure to comply with a warning by the top European Union court related to the data transfer of Facebook’s EU users to servers in the United States.
Why is Facebook being fined?
A person familiar with the case who spoke on the condition of anonymity told Bloomberg that Ireland’s Data Protection Commission will punish the social media giant for failing to heed a top court warning aimed at protecting users’ data from the security services in the United States once it’s shipped to servers across the Atlantic.
According to media reports, Ireland’s data protection watchdog will confirm the fine as soon as Monday and is also reportedly expected to pause transfers of data from Facebook’s European users to the US. Furthermore, the court might also demand that Facebook stop using complex legal instruments to move EU data to the US, called standard contract clauses, reported Politico.
Highest fine paid by a company
Sources told the news agency Reuters, that the penalty will be higher than the previous record fine for Amazon $821 million (746 euros). This comes after Amazon was forced to pay a fine of the previously mentioned amount by Luxembourg, in 2021 for similarly flouting the EU’s privacy standards.
Why now?
The upcoming decision reportedly follows revelations by Edward Snowden, the former US National Security Agency contractor back in 2013 and a legal challenge brought by an Austrian privacy campaigner, Max Schrems.
As per media reports, Schrems has expressed concerns that European users’ data is not sufficiently protected from the US’ intelligence agencies after Snowden disclosed that officials across the Atlantic have repeatedly accessed people’s information via tech companies like Facebook, Google, and so on.
Notably, Scherms’ lawsuit began a decade-long legal battle over the legality of transferring EU data to the US. According to Reuters, EU regulators led by Ireland’s Data Protection Commissioner Helen Dixon have been in the midst of finalising the ban on a legal tool used by Facebook to transfer European user data.
This comes as the Irish DPC was given one month, back in April to chalk out the details of the order to block Facebook’s transatlantic data flows, as per which, the ban would take place sometime in mid-May, reported Reuters.
Europe’s highest court also ruled in 2020 and repeatedly said that an agreement between the EU-US for data transfer was invalid and concluded that Washington does not have sufficient systems in place to protect European data.
Facebook’s previous responses
However, the company which also owns WhatsApp and Instagram warned that suspending data transfers on the basis of standard contractual clauses (SCCs) could have “a far-reaching effect on businesses that rely on SCCs (Facebook and other tech giants) and on the online services many people and businesses rely on”.
Similarly, Meta, earlier this year, reiterated that without SCCs or “other alternative means of data transfers” it would “likely” not be able to offer access to social media platforms like Facebook and Instagram, across Europe, reported The Guardian.
(With inputs from agencies)
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