Meta was slammed on Monday with a fine of €1.2 billion, equivalent to $1.3 billion, and was ordered to cease transferring user data to the United States over privacy concerns.
The decision, revealed by the Data Protection Commission of Ireland, marks the largest penalty since the European Union created the restrictive General Data Protection Regulation five years ago. Authorities said that Facebook, the flagship social media network owned by Meta, breached a statute that mandates certain safeguards for international data transfers.
Meta was provided with a grace period of five months to implement the suspension, according to the decision, which was adopted by the European Data Protection Board last month.
Executives from the firm issued a statement on Monday contending that American and European regulators must resolve the “fundamental conflict of law” with respect to data access and privacy. There will be “no immediate disruption” to Facebook users in Europe as the company, which also owns Instagram and WhatsApp, appeals the decision and the fine.
“The ability for data to be transferred across borders is fundamental to how the global open internet works. From finance and telecommunications to critical public services like healthcare or education, the free flow of data supports many of the services that we have come to rely on,” the company said. “Without the ability to transfer data across borders, the internet risks being carved up into national and regional silos, restricting the global economy and leaving citizens in different countries unable to access many of the shared services we have come to rely on.”
Meta added that Ireland’s Data Protection Commission had acknowledged that Meta continued the transfers between the United States and European Union in “good faith” and that a fine would be “unnecessary and disproportionate.” The firm asserted that the European Data Protection Board overruled the decision, which “also chose to disregard the clear progress that policymakers are making to resolve this underlying issue.”
The decision from European authorities comes as Meta launches significant restructuring efforts to reverse declining profits and reduce managerial complexity: the company dismissed more than 11,000 employees at the end of last year, announcing a further headcount reduction of 10,000 employees two months ago and the conclusion of efforts to fill 5,000 open positions.
“As I’ve talked about efficiency this year, I’ve said that part of our work will involve removing jobs, and that will be in service of both building a leaner, more technical company and improving our business performance to enable our long term vision,” Meta chief executive Mark Zuckerberg told employees in a memo.
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Meta and other technology behemoths have been the subject of several lawsuits and regulatory actions over their handling of user data. Lawmakers have also considered several proposals that would increase privacy standards: the American Data Privacy and Protection Act, for instance, proposed a “data minimization” approach toward the collection of user information last year such that technology companies only procure the data points “reasonably necessary and proportionate” to specific applications, including user authentication, fraud prevention, and transaction execution. The bill would have also banned advertising directed toward children or based on “sensitive covered data,” including health information and precise geolocation.