Tech giant Meta was dealt a major blow this week after the European Union slammed the company with a record-breaking $1.3 billion fine and ordered the suspension of user data transfers to the United States.
According to the Data Protection Commission of Ireland, Meta, the parent company of the social media network Facebook, had breached the General Data Protection Regulation which insures the safety of data transfers between different countries. The decision was adopted by the European Data Protection Board in mid-May and gives Meta five months to implement the suspension.
Acting in response to the hefty penalty, the tech giant issued a statement Monday invoking the need of both the United States and Europe to quickly resolve the state of data privacy and access. They further argued that the firm had been acting in ‘good faith’ when conducting transfers between US and EU nations and that the warning and financial fine are both “unnecessary and disproportionate.” Meta stressed that without the capacity to move data between borders, the internet itself will be compartmentalized, severing citizens around the world from essential services on a global scale.
These developments come at a time when Meta is in already in a state of flux. Back in December, the firm laid off 11,000 employees in an effort to optimize business performance and operations. Just two months later, an additional 10,000 job cuts were announced while the firm declined to fill 5,000 open positions.
American legislators have also been pushing for further privacy standards in light of the EU’s decision. In 2019, the American Data Privacy and Protection Act (JDSS) sought to ensure “data minimization” by having technology companies utilize only the data points ‘necessary and proportionate’ to their services. This included the banning of advertisements targeting children or promoting ‘sensitive covered data’ such as medical information and geographical location.
It remains to be seen what the future holds for Meta in terms of a potential settlement, or even an eventual overturn of the fine. But for now, the company faces considerable financial damages and the heightened scrutiny of additional Europe-wide privacy guidelines.