Meta described a record-breaking $1.3 billion fine from the European Union over data privacy

London (CNN) Meta has been fined a record €1.2 billion ($1.3 billion) by the European Union Regulators for violating EU privacy laws by transferring Facebook users’ personal data to servers in the United States.

The European Data Protection Council announced the fine in a statement on Monday, saying it followed an investigation into the matter Facebook (Fb) By the Irish Data Protection Commission, the main regulator that oversees Meta’s operations in Europe.

The move highlights ongoing uncertainty over how global companies can legally transfer EU users’ data to servers abroad.

the The EU regulator said the processing and storage of personal data in the US contravened Europe’s signature data privacy law, known as the General Data Protection Regulation. Chapter 5 of the General Data Protection Regulation (GDPR) sets out the conditions under which personal data can be transferred to third countries or international organisations.

The fine is the largest ever imposed under the General Data Protection Regulation (GDPR). The previous record of €746 million ($805.7 million) was collected. Amazon (AMZN) in 2021.

Meta has also been ordered to stop processing personal data of European users in the United States within six months.

Andrea Jelinek, head of the European Data Protection Council, said the Meta breach is “extremely serious because it involves systematic, frequent and persistent transfers”.

“Facebook has millions of users in Europe, so the volume of personal data transferred is huge. The unprecedented fine is a strong signal to organizations that serious breaches have far-reaching consequences,” she added.

Facebook is still available in Europe

Meta, who also owns WhatsApp and Instagram, said she would appeal the ruling, including the fine. She added that there would be no immediate disruption of Facebook in Europe.

The company said the root of the problem stemmed from a “conflict in law” between US rules on data access and Europeans’ privacy rights. Policymakers in the European Union and the United States were on a “clear path” to resolving this conflict under a new transatlantic data privacy framework.

The new framework seeks to end limbo facing companies since 2020, when Europe’s Supreme Court struck down a transatlantic legal framework designed to address EU concerns about potential US government surveillance of European citizens, known as the Privacy Shield.

The United States and the European Union have been negotiating a successor agreement since last year. The continued lack of an alternative to the Privacy Shield threatens the thousands of companies that rely on its ability to transfer EU user data to other jurisdictions, according to legal experts.

Nick Clegg, Meta’s head of global affairs, and Jennifer Newsted, the company’s chief legal officer, said in a statement that the European Data Protection Board “has chosen to ignore the clear progress that policymakers are making to solve this fundamental problem.”

“This decision is flawed, unjustified and sets a dangerous precedent for countless other companies that transfer data between the EU and the US,” they added.

“The ability to move data across borders is central to how the global open Internet works. Thousands of companies and other organizations depend on the ability to move data between the EU and the US in order to operate and provide the services that people use every day.”

Ireland and Big Tech

Prior to Monday’s ruling, the Irish Data Protection Commission had handed Meta nearly $1 billion in fines for alleged breaches of the GDPR since the fall of 2021. But in this case it was not in favor of fining Meta, arguing that doing so went beyond what would be considered “proportionate”. to remedy the breach.

In its own statement on Monday, the regulator said it was obliged to base its final judgment on the European Data Protection Board’s decision.

Ireland has a narrow path forward between keeping big US tech companies, and Align with the EU’s strict approach to technology regulation.

Dublin is home to the European headquarters of apple (AAPL)Meta, Twitter, and Google (Google)Which created thousands of jobs in the country and boosted its economic growth.

Ireland’s low corporate tax rate of 12.5% ​​has been a major factor in attracting these companies. The country was among the latest countries in the Organization for Economic Co-operation and Development to join a global agreement in 2021 to tax multinational corporations at a rate of at least 15%.

A year ago, Apple won an appeal against a European Commission ruling that it owed Ireland 13 billion euros ($14.9 billion) in taxes, ruling that the EU executive had failed to prove that the company had received illegal government aid in the form of favorable tax agreements. with Dublin. The Irish government has sided with Apple in this dispute.

— Brian Fung contributed to this article.

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