Meta, the parent company of WhatsApp, Instagram, and Facebook, has been issued a historic fine of €1.2bn (£1.04bn) by the Irish data protection regulator. The penalty was imposed due to Meta's unauthorized transfer of EU users' data to the United States for processing, a practice deemed insufficiently protected against US surveillance by a 2020 ruling from the highest court in the EU.
This substantial fine represents the largest-ever breach of the general data protection regulations (GDPR), which mandate obtaining permission from data holders before utilizing their personal information. In response to the ruling, Facebook has been directed to cease this practice within a minimum period of five months, suspending all future transfers. Additionally, the company has been granted six months to discontinue unlawful processing and storage of data in the US. It's worth noting that Instagram and WhatsApp are not subjected to these requirements.
This long-standing issue has spanned a decade, beginning in 2013 when privacy activist Max Schrems initiated legal action against Facebook, as the company was then known. Acting as the EU privacy regulator, the Data Protection Commission (DPC) in Ireland holds jurisdiction over Meta since the company's European headquarters are based in Dublin.
Meta has expressed its intent to appeal the decision, assuring users that there will be no interruption in service. The company denounces the ruling as "unjustified and unnecessary," asserting that it establishes a "dangerous precedent." Meta is actively pursuing legal recourse to obtain stays on the order through the courts. Prior to this incident, the largest penalty imposed by EU regulators amounted to €746m, which was levied against Amazon in 2021.
Efforts are underway to establish a new agreement between the EU and the US, aimed at facilitating secure and lawful data sharing. This agreement, which may become operational during the summer, could encounter legal challenges. Meta anticipates the completion of this pact before it is compelled to cease the ongoing illegal data transfer, but services will continue to operate even if the arrangement is not finalized. Previously, Meta had suggested that a ban could potentially disrupt services in Europe.
Ceasing the data transfer is projected to result in an estimated loss of 10% of Meta's advertising revenue, as revealed during an investor call last month. This figure significantly exceeds the monetary value of Monday's £1bn fine.
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