Meta Slapped with Record $1.3 Billion Fine for EU User Data Transfers to the US

Meta has been issued a record-breaking fine of €1.2 billion ($1.3 billion) and instructed to halt the transfer of data collected from Facebook users in Europe to the United States. This verdict stems from Meta's violation of the data protection regulations set forth by the European Union.

The European Data Protection Board issued a statement revealing the imposition of a fine today. The penalty came after an investigation conducted by the Irish Data Protection Commission, the primary regulatory authority responsible for overseeing Meta's activities in Europe.

According to the EU regulator, the handling and retention of personal data in the United States violated Europe's prominent data privacy legislation, known as the General Data Protection Regulation (GDPR), precisely Chapter 5 of the GDPR, which outlines the requirements for transferring personal data to third countries or international organizations.

This fine set a new record under the GDPR as the largest ever imposed. The previous highest fine of €746 million ($806.6 million) was levied against Amazon in 2021.

Shortly after the decision, Meta released a blog post where it announced its intention to appeal the ruling, including the imposed fine. It also said that there will be no immediate disruption to Facebook's operations in Europe.

"We are appealing these decisions and will immediately seek a stay with the courts who can pause the implementation deadlines, given the harm that these orders would cause, including to the millions of people who use Facebook every day," Nick Clegg, Meta’s president of global affairs, and Jennifer Newstead, the company’s chief legal officer wrote in the post. 

According to Clegg and Newstead, the underlying problem originates from a "conflict of law" between the data access regulations in the United States and the privacy rights of Europeans. Meta noted that policymakers from the European Union and the United States were making significant progress in resolving this conflict through the establishment of a new transatlantic Data Privacy Framework.

Since 2020, companies have been grappling with uncertainty due to the European Union's top court invalidating the Privacy Shield agreement between the EU and the United States. This decision affected approximately 5,000 companies that heavily relied on the agreement for cross-border data transfers. The newly proposed framework aims to resolve this uncertainty and provide a solution for companies in this regard.

Clegg and Newstead stated that the European Data Protection Board "chose to disregard the clear progress that policymakers are making to resolve this underlying issue." 

"This decision is flawed, unjustified and sets a dangerous precedent for the countless other companies transferring data between the EU and US," they said. "The ability for data to be transferred across borders is fundamental to how the global open internet works. Thousands of businesses and other organizations rely on the ability to transfer data between the EU and the US in order to operate and provide services that people use every day."

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