Meta Set to Face Record EU Privacy Fine Related to Data Transfer of Facebook Users

Meta Platforms is set to face a record European Union privacy fine related to data transfer of Facebook's EU users to US servers for failing to comply with a warning by a top EU court, two sources familiar with the matter said.

The penalty will be higher than the previous record EUR 746 million (nearly Rs. 6,660 crore) fine for Amazon.com, according to the sources.

Meta declined to comment, while the Irish Data Protection Commission (DPC) and the European Commission did not immediately respond to Reuters' requests for comment.

EU regulators led by Ireland's Data Protection Commissioner Helen Dixon have been finalising a ban on the legal tool used by Facebook to transfer European user data because of concerns US intelligence agencies could access the information.

In April, they said the Irish DPC had one month to make an order blocking Facebook's transatlantic data flows. The ban could be in place by mid-May.

Europe's highest court ruled in 2020 that an EU-US data transfer agreement was invalid, citing surveillance concerns.

Meta last year warned that an order to ban the mechanism it uses to transfer data from Europe to the United States could force it to suspend Facebook services in Europe.

Meanwhile, Meta Platforms joined the generative AI product race this week, saying it would begin testing artificial intelligence-powered ad tools that can create content like image backgrounds and variations of written text.

A select group of advertisers will be invited to experiment with the tools in a "testing playground" that the company is calling the AI Sandbox, Meta executives said at a press event in New York.

© Thomson Reuters 2023