What’s Next After EU Fined Facebook $1.3 Billion for Sending Data to the US

The European Union (EU) has fined Facebook’s parent company Meta Platforms $1.3 billion for sending data of European users to the US – making it the biggest fine that the region has ever imposed under the General Data Protection Regulation.

The ruling, which was announced by Ireland’s Data Protection Commission, bars the company from sending data of European Facebook users to the US and gives it at least five months for complying with the new rules.

The ruling would only impact Facebook and not WhatsApp and Instagram which are also owned by Meta Platforms.

Facebook’s global user count surpassed 2 billion in the fourth quarter of 2022 and 255 million of these are in the EU.

In a blog post, Nick Clegg, President, Global Affairs & Jennifer Newstead, Chief Legal Officer said, “We intend to appeal both the decision’s substance and its orders including the fine, and will seek a stay through the courts to pause the implementation deadlines.”

Clegg meanwhile assured that “there is no immediate disruption to Facebook in Europe.”

EU Has Reportedly Fined Meta $1.3 Billion Over Illegal Data Transfers

In its 2021 annual report, Meta Platforms warned that if it is unable to transfer data between the EU and the US it “will likely be unable to offer a number of our most significant products and services, including Facebook and Instagram, in Europe.”

It added that the event “would materially and adversely affect our business, financial condition, and results of operations.”

Facebook can still escape the consequences if the EU and the US agree on the data transfer agreement – which was in principle agreed to in 2022.

However, the US might want to expedite the deal now as the ruling might cripple the business of the Menlo Park-based company.

Meta Platforms is anyways battling slowing growth and its revenues fell 1% YoY last year. It was the first time in history that its revenues fell on a yearly basis.

Things stabilized a bit in Q1 2023 where it posted a 3% YoY rise in revenues. However, its adjusted EPS fell 19% in the quarter – led by the $3.99 billion operating loss that its metaverse business reported.

Last year, Meta Platforms’ metaverse business lost a record $13.7 billion. However, despite many questioning the need to invest in metaverse, Mark Zuckerburg has not only defended the investments but also denied reports that the company is slowing down the investments.

Facebook Sees a Massive Opportunity in Metaverse and AI

On more than one occasion, Zuckerburg has said that while metaverse is a key long-term growth driver, the company is also investing in AI in the short term.

Many tech companies including Google, Microsoft, and IBM are investing in AI as the emerging technology has become the new battlefield not only between tech giants – but also between the US and China – both of which are vying for global tech dominance.

Coming back to the EU’s fine on Facebook, it only adds to the company’s ongoing troubles related to data transfers and targeted ads.

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