Ireland’s High Court dismissed Facebook’s procedural efforts to block a draft decision of the country’s Data Protection Commission to suspend its data flow between the European Union and the United States. The European Union decision was intended to protect the privacy of European users, whose data was being sent to U.S. computer servers, and Facebook contended that the Data Protection Commission, which issued its preliminary decision in August, gave it too little time to respond. The court originally stayed the decision in September.
The Wall Street Journal reports that, “the Commission still needs to finalize its draft decision ordering a suspension of data transfers and submit it to other EU privacy regulators for approval before it becomes effective,” a process that could take months. But the decision sets the stage for “a precedent-setting interruption of its data flows,” with WSJ noting that, “while Friday’s court decision is a procedural one, the underlying questions are central to trans-Atlantic trade and the digital economy.”
The ruling, according to legal experts, “could apply to other large tech companies that are subject to U.S. surveillance laws, such as cloud services and email providers — potentially leading to widespread disruption of trans-Atlantic data flows.” That would impact cloud-computing, social media and advertising industries and their “billions of dollars of business.”
Should the decision stand, “Facebook will likely have to re-engineer its service to silo off most data it collects from European users, or stop serving them entirely, at least temporarily.” Industry observers are also watching “how Ireland’s DPC enforces the ruling … because it leads EU privacy enforcement for several other big tech companies, including Alphabet’s Google, Apple and Twitter, which have their European headquarters in the country.”
“The preliminary order from the DPC is concerning as it could jeopardize data flows from Europe to the U.S. for a wide range of companies,” said Computer & Communications Industry Association senior manager of public policy Alexandre Roure. “Europe is unlikely to meet its digital aspirations and become a ‘world-class data hub’ if it can’t even connect with its main trading partners in the first place.”
Earlier this year, former general counsel and acting secretary of the U.S. Department of Commerce Cameron Kerry agreed that, “with trans-Atlantic data flows vital to both economies, the EU cannot afford to become a data island, nor the U.S. a data pariah.”
AP News reports that Irish High Court Judge David Barniville wrote in his judgement that, Facebook “must fail on those grounds of challenge and that it is, therefore, not entitled to any of the reliefs claimed in the proceedings.”
The inquiry began when the European Union top court ruled that, under the terms of the Privacy Shield, an agreement covering such trans-Atlantic data transfers, Facebook “didn’t do enough to protect users from U.S. government cybersnooping.” It adds that, “Facebook has data centers around the world and complying with the order could mean a costly and complex revamp of its operations to ensure European user data is siloed off from the U.S.”