Meta Down 1.4% Premarket After $1.3B Fine Over US Data Transfers

On Monday, data regulators in the European Union (EU) announced their decision to fine Meta Platforms for €1.2 billion ($1.3 billion) and ordered the company to stop transferring Facebook data of EU citizens to the US. This is the biggest-ever penalty of its kind in the EU.

2013 Complaint Against Meta Results in a Record-High Penalty

Shares of Meta Platforms fell more than 1.4% in premarket trading Monday on the reports that the Facebook owner is facing a $1.3 billion fine by regulators in the European Union (EU) over data transfers.

More specifically, EU data regulators banned Meta from transferring Facebook data belonging to EU citizens to the US, citing privacy violations. The judgment was made by Ireland’s Data Protection Commission (DPC), alleging that the current regulatory framework for data transfers to the US “did not address the risks to the fundamental rights and freedoms” of EU-based Facebook users.

The €1.2 billion figure marks the highest-ever fine imposed by the EU on a company, exceeding the previous record of €746 million levied upon Amazon two years ago. The decision comes ten years after Facebook first faced such allegations in the EU following revelations by whistleblower Edward Snowden regarding US mass surveillance programs.

The penalty marks a major blow to Meta, as data transfers represent a key part of the tech giant’s extensive ad-targeting business. In 2022, the company said it was considering closing down Facebook and Instagram in the EU if it gets banned from sending data back to its homeland, a warning that EU lawmakers perceived as a threat.

“Meta cannot just blackmail the EU into giving up its data protection standards. Leaving the EU would be their loss.”

– EU lawmaker Axel Voss told the media.

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Regulators’ Privacy Clampdown on Meta

EU’s crackdown on Meta should not surprise, given that the tech behemoth has faced regulatory scrutiny over privacy issues several times. One notable example dates back to 2018 when Mark Zuckerberg’s Meta got involved in the so-called Cambridge Analytica scandal.

Namely, it was revealed that a political consulting firm, Cambridge Analytica, had improperly accessed and harvested the personal data of millions of Facebook users without their permission. This major incident led to widespread concerns about Meta Platforms’ handling of user data and its privacy practices.

Since then, regulators in the US and worldwide have been increasingly cracking down on Meta and initiated investigations into the company’s data privacy practices. In 2019, Meta reached an agreement with the Federal Trade Commission (FTC), leading to a $5 billion fine—the largest ever imposed on a tech company.

How do you think Meta will respond to the $1.3 billion fine by the EU? Let us know in the comments below.