Facebook Ireland claims data transfer ruling could cost €143bn

A draft finding by the Irish Data Protection Commissioner that existing EU-US data transfer channels are invalid on grounds of inadequate US legal protections for EU citizens’ privacy rights could, if upheld, cost €143bn a year, Facebook Ireland has told the High Court.
Facebook Ireland claims data transfer ruling could cost €143bn

The US government yesterday made an application, unprecedented in Irish courts, to join the huge action by commissioner Helen Dixon aimed at establishing the legality of channels, known as standard contractual clauses, being used for daily EU-US data transfers.

Judge Brian McGovern will rule by the end of July on applications by the US and major Irish, EU and US business and civil liberties organisations, along with data privacy campaigner Kevin Cahill, to join the case as ‘amicus curiae’ (assistant to the court on legal issues).

The action is aimed at having the validity or otherwise of the standard contractual clauses referred by the High Court to the Court of Justice of the EU for determination. Unless a party has been joined by the Irish High Court, it cannot participate in any reference to the Court of Justice of the EU.

The commissioner, in a draft finding last May, said Austrian lawyer Max Schrems had raised “well-founded” objections to the validity of the standard contractual clauses. When a ‘well-founded’ decision is reached, the next step for a commissioner is to seek to have the Court of Justice of the EU decide the issue. The outcome of continuing EU-US discussions on a ‘privacy shield’ may affect the wording of any referral, her counsel Michael Collins SC said.

The standard contractual clauses were approved under European Commission decisions of 2001, 2004 and 2010 but doubts about their validity have mounted after disclosures about US mass surveillance by Edward Snowden and since the Court of Justice of the EU last year struck down the 15-year-old safe harbour arrangement for EU-US data transfers.

The commissioner’s case is against Facebook Ireland (because Facebook’s European headquarters are here) and Mr Schrems because she considers they are the appropriate parties to address the relevant issues arising from Mr Schrems’s complaint.

The case, with huge implications for business entities and millions of EU citizens, raises issues concerning surveillance by US national security agencies and if US law provides an adequate remedy for any breach of privacy rights of EU citizens. Its importance was underlined by the applications to join by the US government; the Business Software Alliance, a global business organisation whose application was supported by the American Chamber of Commerce Ireland, and others.

Paul Gallagher SC, for Facebook Ireland, said the case has enormous implications for Ireland, the EU and globally. It was conservatively estimated by the alliance, that if the standard contractual clauses were found invalid, that would have a negative impact of 1% on European GDP, costing €143bn annually, he said.

While the court “of course has to apply the law even if the heavens fall in”, it should know to what extent the heavens might fall in on the basis of its decision, counsel said. Eileen Barrington SC, for the US, said it is in “a unique and unprecedented position” because its laws were at the heart of the case” and it was of “critical importance” it be joined to inform the court about the adequacy of US data-protection laws.

More in this section

Puzzles logo

Puzzles hub

Cookie Policy Privacy Policy FAQ Help Contact Us Terms and Conditions

© Irish Examiner Ltd