Facebook is set to receive a fine of more than €746m (£648m) and may be ordered to suspend data transfers to the US, as Ireland’s Data Protection Commission prepares to penalize the social media giant for its mishandling of user data. This fine, expected to be confirmed soon, will surpass the previous record GDPR breach fine of €746m imposed on Amazon by Luxembourg in 2021.
The decision by the Irish regulator, acting as the lead privacy regulator for Facebook and Meta across the EU, is likely to result in the temporary halt of data transfers from Facebook’s European users to the US. However, the ruling is expected to have a grace period for compliance and may be subject to an appeal by Meta.
Implications of EU Data Transfer Suspension for Meta
The ruling stems from a legal challenge brought by Austrian privacy campaigner Max Schrems, relating to concerns over the protection of European users’ data from US intelligence agencies following the Edward Snowden revelations. If implemented, the suspension of data transfers could have far-reaching implications for businesses relying on standard contractual clauses (SCCs) and the online services used by individuals and businesses.
While Meta, the parent company of Facebook, Instagram, and WhatsApp, has faced nearly €1bn in fines from the Irish regulator since September 2021, critics argue that a financial penalty alone will not suffice without significant changes to Facebook’s data-dependent business model.
The Irish data watchdog has also regulated other technology platforms such as Apple, Google, and TikTok, whose EU headquarters are in Ireland.
In previous incidents, Meta was fined €265m for a data breach and €405m for allowing teenagers to publicly display personal contact details through Instagram.
It is important to note that any potential data transfer suspension could be rendered irrelevant if a new data transfer agreement is implemented by the US and EU, as negotiations have taken place at a political level.
Meta’s Transition to the Metaverse Amidst Revenue Success
Despite these challenges, Meta remains focused on its transition away from social media and toward the development of the Metaverse, a virtual reality program. The company reported better-than-expected first-quarter revenue of $28bn but has faced struggles in competing with the growing popularity of platforms like TikTok, particularly among younger demographics. Meta has also undergone mass layoffs as part of a planned efficiency drive announced by founder Mark Zuckerberg earlier this year.