Data decision could cost Europe €143bn per year, claims Facebook

8 Jul 2016

A pivotal case is taking place at the High Court in Dublin aimed at establishing the validity of Standard Contractual Clauses (SCCs) that govern daily EU-US data transfers. The US government has joined the case with the aim of moving it to the European Court of Justice

Social media giant Facebook has claimed that if a decision by Ireland’s Data Protection Commissioner is upheld it could cost the European digital economy €143bn per year.

Data Protection Commissioner Helen Dixon had found that EU-US data transfer channels used by Facebook are invalid because of inadequate US legal protection for EU citizens’ privacy rights.

In a High Court hearing yesterday (7 July), the US government made an application – unprecedented in Irish court history – to join the action by Dixon to establish the legality of Standard Contractual Clauses (SCCs) that govern daily EU-US data transfers.

Also joining the action along with the US government are the Business Software Alliance, IBEC and Digital Europe, which represents the European digital industry.

Validity of SCCs

According to the Irish Independent, the action aims to have the decision over the validity of SCCs finally determined by the Court of Justice of the European Union.

The SCCs were approved under European Commission decisions in 2001, 2004 and 2010.

However, events following the revelations of surveillance by the NSA on transatlantic communications overtook their renewal and the issue was compounded by the declaration that the long-standing Safe Harbour rules were invalid.

Last May, Dixon said that Austrian lawyer and privacy advocate Max Schrems raised “well-founded” objections to the validity of SCCs.

The case is vital as it may affect the final wording of the EU-US Privacy Shield designed to replace the outmoded Safe Harbour.

Safe Harbour was abandoned after a high-profile case by Schrems exposed shortcomings in how tech firms protected EU citizens’ private information.

In October, the European Court of Justice declared Safe Harbour invalid.

Dublin Four Courts image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years