Facebook feared 'devastating consequences' from Irish data ruling: lawyer


Facebook logo is seen on a shop window in Malaga, Spain, June 4, 2018. REUTERS/Jon Nazca/File Photo

DUBLIN (Reuters) - A move by Ireland's data regulator's in August to halt the transatlantic transfer of Facebook customer data threatened "devastating" and "irreversible" consequences for its business, a lawyer representing the U.S. company said.

Facebook is asking Ireland's High Court to review the preliminary decision by the Irish Data Protection Commissioner, which took action in August following July rulings on EU-U.S. data transfers by the Court of Justice of the European Union.

Ireland's data watchdog, Facebook's lead EU regulator because its European headquarters are in Dublin, told Facebook in August it was "proposing that data transfers be suspended," Paul Sreenan told Ireland's High Court on the first day of the judicial review.

"We have made the point ... that this would have devastating consequences for the plaintiff's business," Sreenan told the court, before describing the potential damage as "irreversible."

"In the light of such a decision it is not clear how Facebook Ireland could continue to provide Facebook and Instagram services in the EU," Sreenan said.

The mechanism being questioned by the Irish regulator, the Standard Contractual Clause (SCC), was deemed valid by the European Court of Justice in a July decision.

But the Court of Justice also ruled that under SCCs privacy watchdogs must suspend or prohibit transfers outside the EU if data protection in other countries cannot be assured.

Sreenan told the court the watchdog's move would impact Facebook's 410 million active users in Europe, hit political groups and undermine freedom of speech. Facebook estimates that 25 million businesses use the platform, generating over $200 billion of revenue in 2019, he added.

Facebook "challenges the validity of both the process and the preliminary draft decision" of the Irish regulator, he said.

Facebook received the preliminary decision from the watchdog on Aug 28 "out of the blue and without prior warning" and the 21 days it had been given to respond was not sufficient, he said.

The High Court in September temporarily froze action by the data protection watchdog so that a judicial review of the probe could be held.

Ireland's Data Protection Commission earlier this month said it would fully defend itself against Facebook's assertion that its right to fair procedures had not been respected.

The Commission, which is due to present its case on Thursday, said it would not offer additional comment during the hearing.

(Reporting by Conor Humphries; Editing by Jon Boyle and Jane Merriman)

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