The Belgian Privacy Commission said the Brussels Appeals Court had dismissed its case on the grounds that the regulator has no jurisdiction over Facebook Inc, which has its European headquarters in Ireland.
That marks a victory for the US company, which staunchly maintained that only the Irish Data Protection Commissioner has jurisdiction over how it uses Europeans' data.
Facebook has had run-ins with a number of European privacy watchdogs over its use of people's data.
Belgium's data protection regulator took Facebook to court a year ago, accusing it of trampling on EU privacy law by tracking people without a Facebook account without their consent.
The court ruled in favour of the regulator and ordered Facebook to stop tracking non-Facebook users when they visited a Facebook page or face a EUR 250,000 ($277,000 or roughly Rs. 1.8 crores) daily fine.
Facebook appealed the ruling. In the meantime it said it would comply and stop using the so-called 'datr' cookie which it places on people's browsers when they visit a Facebook.com site or click a Facebook 'Like' button on other websites, allowing it to track the online activities of that browser.
"We are pleased with the court's decision and look forward to bringing all our services back online for people in Belgium," a Facebook spokeswoman said.
The Belgian regulator said it would look into launching a final appeal with the Court of Cassation, which can throw out previous judgements but not deliver new ones.
"Today's decision simply and purely means that the Belgian citizen cannot obtain the protection of his private life through the courts and tribunals when it concerns foreign actors," the regulator said in a statement.
It added that the Court of Cassation had previously overruled the Court of Appeal on matters of jurisdiction over foreign companies.
"Thus the citizen is also exposed to massive violations of private life," said Willem Debeuckelaere, president of the Belgian Privacy Commission.
The Brussels appeals court also threw out the Belgian Privacy Commission's claim that the case was urgent and required expedited procedure.
© Thomson Reuters 2016
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