Facebook Loses Appeal In Data Protection Case In Ireland

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Facebook Inc (NASDAQ:FB) has lost an appeal against a decision in the European Union that would keep it from being able to send data about its European users to computer servers in the U.S. The Irish High Court has dismissed all of the social networking giant’s complaints about the preliminary data flow decision handed down in August by the nation’s Data Protection Commission.

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Facebook Loses Appeal Over Data

Facebook tried to keep Ireland's Data Protection Commissioner from moving forward with an order that would keep it from transferring data between Europe and the U.S. The ruling against the social media giant paves the way for a major disruption to data flows across the Atlantic Ocean. It could affect other tech giants in addition to Facebook.

The company tried to convince Ireland's High Court that the nation's privacy regulator didn't give it enough time to respond and issued a judgement prematurely. The court stayed the preliminary decision in September, pending its decision. If it's finalized, Facebook could be forced to stop sending personal data about EU users to its U.S. servers.

The Wall Street Journal explains that the decision is a procedural one, but the questions apply to other aspects of trans-Atlantic trade and the digital economy. Legal experts told the newspaper that the logic in Ireland's provision order could be applied to other big tech companies subject to U.S. surveillance laws. The ruling could result in widespread disruption of data flows running across the ocean.

What's Next?

Ireland's Data Protection Commissioner heads up enforcement of privacy law in the EU for companies with their European headquarters in the country. The commission must still finalize its draft decision to order that data transfers be suspended and submit it to other privacy regulators in the EU. If they approve the decision, it will go into effect, although the process to get it done could take months, if not longer, depending on court challenges.

If the order is enacted, Facebook will probably have to rebuild its service to keep the data it collects from European users on the continent or stop serving them entirely. The social networking giant plans to defend its data transfers before the commissioners, adding in a statement on Friday that the preliminary decision is "damaging not only to Facebook, but also to users and other businesses."

Facebook is part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders' families.

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