- May 23, 2023
- 5 minutes read
Facebook Owner Meta Fined $1.3B For Breaking EU Data Privacy Laws
Meta Platforms Inc (NASDAQ: META), parent company of social media platform Facebook, has been hit with a record fine for…
Meta Platforms Inc (NASDAQ: META), parent company of social media platform Facebook, has been hit with a record fine for violating European Union (EU) data privacy rules. The company’s Irish subsidiary was fined 1.2 billion euros ($1.3bn) by the local Data Protection Authority (DPA), marking the largest fine ever issued for GDPR violations.
General Data Protection Regulation (GDPR) refers to a set of data privacy laws enacted by the EU in 2016. According to the Irish Data Protection Authority, Meta violated GDPR laws by transferring the personal data of EU-based users to U.S. servers. Such transfers were previously protected by an EU-U.S. agreement called the Privacy Shield, but this agreement was declared invalid by the EU’s top court in 2020.
The Irish Data Protection Authority levied the record fine on Meta and ordered it to suspend the data transfers. The previous record fine for EU data privacy violations was held by e-commerce giant Amazon (NASDAQ: AMZN), which was ordered to pay $890mn by Luxembourg’s National Commission for Data Protection in 2021.
- Meta is no stranger to fines from the Irish Data Protection Authority. The same agency fined it €18mn ($19mn) in March 2022 for record-keeping issues, €265mn ($285mn) in November 2022 for a data leak, and €180mn ($194mn) this January over its handling of Instagram teenage users’ data.
- The latest fine amounts to nearly 6% of Meta’s $23bn net profit in 2022.
Meta said it would appeal the fine in an EU court, calling it “unjustified and unnecessary.” The company had previously warned it could shut down Facebook and Instagram in Europe over the data-sharing dispute but noted there was no immediate disruption to its service in the latest statement.
Separately, Meta struck a deal to sell Giphy, an animated images platform it acquired in 2020, on the orders of the U.K.’s antitrust agency. Meta paid $315mn for Giphy and is selling it to Shutterstock (NYSE: SSTK), a popular stock photography site, for $53mn, or a $262mn loss. The U.K.’s Competition and Markets Authority (CMA) ordered Meta to sell the platform last October, claiming it gave the company an unfair advantage over competitors.
- Needless to say, Meta is no stranger to antitrust and regulatory headaches. It still holds the global record fine for privacy violations, $5bn levied by the U.S. Federal Trade Commission (FTC) in 2019. The business continues, although Meta shareholders can expect more fines occasionally.