Friday, June 9, 2023

EU slams $1.3 billion fine on Meta for transferring user data to the United States

Without a legal basis for data transfers, Meta warned in its most recent earnings report that it would be compelled to discontinue providing its services in Europe.

• May 22, 2023

The European Union has fined Meta, the parent company of Facebook, a record $1.3 billion on Monday and ordered it to stop sending user data across the Atlantic.

The $1.3 billion privacy penalties imposed by Ireland’s Data Protection Commission surpass Amazon’s 746 million euro fine for data protection crimes in 2021.

However, Meta vowed to appeal and seek court orders to immediately put the verdict on hold, arguing that the court’s decision was unjustified and set a dangerous precedent for other companies transferring data between the EU and the U.S.

“This decision is flawed, unjustified and sets a dangerous precedent for the countless other companies transferring data between the EU and U.S.,” a joint statement by Nick Clegg, Meta’s president of global and affairs, and Chief Legal Officer Jennifer Newstead read.

The company had earlier warned that it might cut off services for its users in countries across Europe.

The verdict is a new development in a court dispute that started in 2013 after Austrian lawyer and privacy activist Max Schrems complained about how Facebook handled his data in the wake of Edward Snowden’s revelations about American digital eavesdropping.

The EU’s top court invalidated the Privacy Shield, an agreement governing data transfers between the EU and the U.S., in 2020 because it didn’t go far enough to shield citizens from electronic snooping by the U.S. government.

Without a legal basis for data transfers, Meta warned in its most recent earnings report that it would be compelled to discontinue providing its services in Europe.

If the social media corporation is compelled to stop sending user data over the Atlantic, it may have to undergo an expensive and complicated overhaul of its operations. According to its website, Meta operates a fleet of 21 data centers, but only 17 of them are located in the United States.

Pressure over their data practices is mounting on other social media giants. TikTok has undertaken a $1.5 billion endeavour to store user data from American users on Oracle servers in an effort to allay Western concerns about the short video-sharing app’s possible cybersecurity threats.

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