Facebook loses challenge as court rules in favor of DPC

Facebook loses challenge

Facebook loses challenge as court rules in favor of DPC’s draft decision for an inquiry and suspension of Facebook’s data transfers to the US. 

Following the Schrems II judgement of last July, the Irish Data Protection Commission, launched an inquiry into Facebook Ireland Ltd, and suspended the company’s EU-US data flows. Facebook disagreed with, and decided to challenge the decision. The company asserted that the DPC’s decision, and the procedures subsequently adopted are susceptible to judicial review. This long standing legal battle over Facebook Ireland’s right to continue making data transfers to the US, has now come to an end. This ruling, affirming Ireland’s lead regulator’s decision to suspend their EU-US data flows is likely to have major effects on Facebook’s operations. 

This decision is the culmination of an eight year battle, initiated by a 2013 complaint from Mr. Max Schrems.

Facebook Ireland, a subsidiary of the US company Facebook Inc, provides the social networks Facebook and Instagram to the European region, and houses its central administration and European headquarters in Dublin. In June 2013, Mr Maximilian Schrems filled a complaint with the DPC regarding the transfer of his personal data to the US by Facebook Ireland, claiming that it was unlawful under national and EU law, and in October 2013, the DPC stated that the matter would be “investigated promptly with all due diligence and speed”. In May 2016, the DPC wrote to Facebook Ireland and Mr Schrems with a draft decision that Standard Contractual Clauses could not lawfully be relied upon in respect to transfers of EU citizens’ personal data to the US. After this judgment, in July 2020, the CJEU gave a judgment. The court ruled that according to the GDPR, EU residents whose personal data is transferred to a third country using Standard Contractual Clauses must be afforded the same level of protection guaranteed within the European Union and the GDPR. Since the authorities in the United States cannot be bound by Standard Contractual Clauses, data transferred there may not be effectively protected. As a result of last year’s judgment, the Irish DPC launched an inquiry, and came to a preliminary decision to halt Facebook’s data transfers to the US, a decision that was subsequently challenged by Facebook. 

Facebook challenged the draft decision by the DPC claiming that they should have awaited guidance from the EDPB. 

Facebook challenged the draft decision, as well as the inquiry, claiming that the Data Protection Commission should have waited for guidance from the European Data Protection Board before proceeding with an inquiry and ordering suspension of its data transfers. The company asserted that as a member of the EDPB, the DPC would have received imminent guidance from the EDPB, and should not have acted prior to receiving that. This guidance was eventually published in November 2020, and as of May 14th 2021, the High Court has ruled that Facebook Ireland “ has not established any basis for impugning the DPC decision or the PDD of the procedures for the inquiry adopted by the DPC.” The judge rejected claims by Facebook that the DPC was in breach of its duty in how the case was handled. Justice David Barnaville also stated however, that the DPC should have responded to certain questions that Facebook raised in their October 2020 correspondence.

Facebook loses challenge as high court ruling gives the Irish DPC the right to open a second “own volition“ investigation against Facebook.

This long standing battle has now come to an end, resulting in an inevitable suspension of Facebook’s data transfers to the US. A second, “own volition” investigation has also been opened and is running simultaneously with the original complaint dating back to 2013, which led to the CJEU’s “Schrems II” decision. Regarding Facebook’s appeal of the DPC’s decision, the High Court, in its 127 page document outlining its judicial review of this case, rejected Facebook’s claims against the DPC. Eight years after the initial complaint, it is now certain that the DPC will have to act to stop Facebook‘s EU-US data transfers. This decision is likely to heavily impact Facebook’s operations. Regardless, the company said it looked forward to defending its compliance to the Data Protection Commission.

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