Meta’s EU Future Hangs on Irish Authority’s Draft Data Regulations

Meta (formerly Facebook) will be paying close attention to the discussions that will be held today, July 12, on the plenary session of the European Data Protection Board (EDPB). The outcome of these discussions may have a direct impact on the company’s ability to provide services like Instagram and Facebook in Europe.

Last week, the Irish data protection regulator issued a draft decision that could prevent Meta from moving data about European Union users to the United States. If the decision is finally adopted in its current terms, it could affect services like Instagram and Facebook in Europe. WhatsApp is not affected by the decision.

The Irish decision stems from an EU court decision in 2020 that invalidated an EU-U.S. agreement regulating trans-Atlantic data flows because, among other reasons, U.S. laws give surveillance agencies access to information about EU users. In its ruling, the EU court deemed the U.S. safeguards of Europeans’ data to be insufficient. Under EU law, information about Europeans can’t be sent overseas unless the country where it is being sent is deemed to give the same level of protection as the EU. Although the U.S. has never been able to provide the same assurances, both countries struck a special deal by which U.S. companies could opt into a program to apply EU privacy principles.

Without this agreement in place, Meta cannot transfer data from EU users to the U.S. However, since the 2020 ruling, Meta has been relying on Standard Contractual Clauses (SCC) to keep data moving. However, the Irish data regulator, in the country where Meta is headquartered in Europe, told the company on Thursday that SCC are not sufficient to comply with the EU court ruling — in other words, the company cannot use this mechanism to move data to the U.S.

The company already warned investors in February through its annual filing with the Securities and Exchange Commission (SEC) that if the then-preliminary Irish decision was to become final, it would prevent Meta from providing services in Europe.

Read more: Meta Warns of Facebook, Instagram Service Interruptions Over EU Data Rules

The Irish draft decision has been sent to the other European data protection authorities, which have now 30 days to give comments. Interestingly, the EDPB is holding a plenary session July 12. The EDPB includes all the national data protection authorities plus the European Data Protection Supervisor. In these sessions, the group discusses policies but also enforcement actions adopted or to be adopted by national authorities. The agenda for the meeting on the 12th, which was probably drafted before the Irish draft decision was issued, doesn’t include Meta — but it is likely that the group devotes time for this issue in the last part of the meeting, reserved for “other business.”

While the national and EU authorities can give comments and their opinions on the decision, they do not have the authority to vote down or amend the decision by the Irish authority. However, sufficient pressure from other regulators could delay the formal adoption of the decision.

Meta still has a few options before shutting down operations in Europe. First, the company could appeal the Irish decision in the EU court, which would delay the implementation of the decision. Second, the company could store data of European users in Europe without transferring it to the U.S. servers, although the company hasn’t publicly stated this as a viable option. Third, the company could wait until the new preliminary agreement is finally approved by the U.S. and Europe in March to continue data transfers between the two regions. This is the preferred option for policymakers and for companies, as this new agreement would cover data flows for all the companies, not just Meta — but it is yet unclear when the parties could reach a final deal on this issue, which may not be in time to address Meta’s problems.

Read more: US and EU Reach Preliminary Deal to Continue Data Flows

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