Facebook, Inc (NASDAQ:FB) could face a permanent ban on transferring European data into the US because Ireland’s High Court dismissed its challenge against an inquiry.
Previously, the top court in the EU invalidated the privacy shield used by the social media giant to share data across the nations.
The latest ruling could spell trouble for other US tech giants to transfer the personal information of individuals to the US servers for commercial interests.
A victory for privacy activist in Austria
Ireland’s high court decision is a victory for an Austrian privacy activist – Max Schrems, who objected to Facebook handling of personal information of Europeans. He cited the revelations of Edward Snowden, a whistleblower of the US, in the past. According to Schrems, US law does not protect against snooping on personal data by the public authorities.
Facebook receives a temporary restraint
The data protection commission of Ireland issued a preliminary order to Facebook in September 2020 preventing the use of standard contractual clauses, a substitute, to transfer European’s personal information to the US. Facebook obtained a temporary restraint on order citing the ruling could disrupt its European operations.
Inquiry into the EU – US data flows to resume
The data transfer by Facebook from the EU to the US is under threat again. An inquiry into the EU – US data transfer will resume as Ireland’s High Court expects to lift the stay on a temporary relief to Facebook in a short hearing on Thursday.
According to a communiqué to CNBC, a spokesperson of Facebook said the company follows the prevailing rules in the EU, referring to the Standard Contractual Clauses and ensuring data protection. Facebook says it uses the data flow to connect people, charities, and businesses and facilitate global service just like other companies.
Facebook will defend its compliance with DPC because the preliminary decision damages its business and users’ interests.
According to experts, the ruling will force Facebook to process European data within the block if the regulator prevents the social media giant from sharing data with the US. An adverse order by the top court could also pose a threat to several US tech giants.
According to a communication shared by Schrems to CNBC, Facebook needs to separate its service into the US and European services.