Facebook, Big Tech Face EU Blow in National Data Watchdogs Ruling

Facebook and other Silicon Valley giants could face more scrutiny and sanctions in the European Union after the bloc's top court backed national privacy watchdogs to pursue them, even when they are not their lead regulators.

Consumer lobbying group BEUC welcomed Tuesday's ruling by the EU Court of Justice (CJEU), which backed the right of national agencies to act, citing enforcement bottlenecks.

Along with Google, Twitter, and Apple, Facebook has its EU headquarters in Ireland, putting it under the oversight of the Irish data protection regulator under privacy rules known as GDPR, which allow for fines of up to 4 percent of a company's global turnover for breaches.

The CJEU got involved after a Belgian court sought guidance on Facebook's challenge to the territorial competence of the Belgian data watchdog, which was trying to stop it from tracking users in Belgium through cookies stored in the company's social plug-ins, regardless of whether they have an account or not.

"Most Big Tech companies are based in Ireland, and it should not be up to that country's authority alone to protect 500 million consumers in the EU, especially if it does not rise to the challenge," BEUC Director General Monique Goyens said.

Several national watchdogs in the 27-member EU have long complained about their Irish counterpart, saying that it takes too long to decide on cases. Ireland has dismissed this, saying it has to be extra meticulous in dealing with powerful and well-funded tech giants.

Ireland's cases in the pipeline include Facebook-owned Instagram and WhatsApp as well as Twitter, Apple, Verizon Media, Microsoft-owned LinkedIn and US digital advertiser Quantcast.

"Under certain conditions, a national supervisory authority may exercise its power to bring any alleged infringement of the GDPR before a court of a member state, even though that authority is not the lead supervisory authority," the CJEU said.

Judges said these conditions include regulators following cooperation and consistency procedures set out in the GDPR and that the violations occurred in the relevant EU country.

"We are pleased that the CJEU has upheld the value and principles of the one-stop-shop mechanism, and highlighted its importance in ensuring the efficient and consistent application of GDPR across the EU," Jack Gilbert, Facebook's associate general counsel, said.

Tech lobbying group CCIA said the ruling could lead to inconsistent and uncertain enforcement and jack up costs.

"It has also opened the back door for all national data protection enforcers to start multiple proceedings against companies," CCIA Europe senior policy manager Alex Roure said.

"Data protection compliance in the EU risks becoming more inconsistent, fragmented, and uncertain. We urge national authorities to be cautious about launching multiple proceedings that would weaken legal certainty and further complicate data protection compliance in the EU," he said.

The case is C-645/19 Facebook Ireland & Others.

© Thomson Reuters 2021