European Data Protection Board (EDPB) Imposes Blockade on Facebook; Levies $1.3 Billion as Penalty

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By AiT Analyst On May 22, 2023

The European Data Protection Board (EDPB) has confirmed it has formally imposed a blockade on Meta’s user data transfer and processing systems. This step would restrict Meta from transmitting user data from the EU to its US-based servers. In a double strike, the EPDB also issued a fine of $1.3 billion on the owner of Meta, WhatsApp and Instagram, making it one of the biggest penalties to be levied on a technology company for flouting the GDPR guidelines. In 2019, Facebook was fined $5 billion by the FTC for the Cambridge Analytica fiasco.

In an official statement, Andrea Jelinek, EDPB Chair admitted to the serious nature of Meta’s user data infringement and its impact on the millions of Facebook users in Europe. Considering the volume and variety of user data being transferred from the EU to the US, it was evident that the blockade and fine made sense. Andrea said, “The EDPB found that Meta IE’s infringement is very serious since it concerns transfers that are systematic, repetitive and continuous. Facebook has millions of users in Europe, so the volume of personal data transferred is massive. The unprecedented fine is a strong signal to organizations that serious infringements have far-reaching consequences.”

GDPR has been in effect since 25 May 2018, enforcing a stringent data protection framework on global organizations that collect private information from the users residing in the EU. In less than five years, almost every major organization has spoken about the daunting nature of compliance management that goes into adhering to GDPR norms, despite having access to the best software solutions to mitigate risks and restrict violations from their side. Irrespective of the nature of breach and non-compliance, organizations could lose millions in the shape of fines if found to be falling short of the GDPR expectations. In Meta’s case, it cost them over a billion — not strange, because in the last 5 years, Facebook has always been penalized multiple times and asked to pay millions as penalties for breaching different articles enshrined within the world’s most widely accepted data privacy regulation.

Ahead of the GDPR anniversary, Ben Kartzman, COO, Mediaocean said, “The last five years, since the introduction of GDPR, have seen the marketing landscape change drastically. Consumers have become much more savvy in regard to their privacy rights and advertisers have experienced massive signal loss. But it wasn’t just regulation that contributed to data deprecation. Other factors in play include Apple’s policies around app tracking and Google’s plans to disable third-party cookies…

Looking ahead, it’s clear that the best path forward for brands is to develop first-party data by building direct relationships with customers and obtaining consent to communicate with them. On top of that, marketers can work with platforms that have their own first-party data and ability to use it for targeting ads. And there are also independent ad servers that can use first-party data and probabilistic determinants to address identity resolution.”

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Ben added, “Above all, marketers need to invest in advanced creative strategies to entice consumers to engage with their brands. With constraints around audience targeting, the most incremental lift for advertising campaigns will come from messaging. This is a big area of focus for advertising technology through the use of AI and automation to create personalized ads at scale.”

Angel Maldonado, data privacy expert and CEO of Empathy.co said: “This latest fine forms part of a litany of transgressions Meta has made when it comes to respecting data privacy and casts no doubt over how little they actually care about protecting and safeguarding consumer data. They treat consumer data as a commodity that can be mined, exchanged and traded at will, acting as if this data is theirs when it is in fact the user’s. GDPR clearly states this but Meta continues to ignore this fact and continues to fall foul of the regulations. Meta are seemingly willing to swallow the hefty fines they incur through these practices but the implications for wider society are severe. The general sense of distrust this cultivates amongst consumers pollutes the whole digital ecosystem and is exactly why consumers don’t feel safe online. It’s vital that not only regulators call out these practices but that the whole tech industry wakes up, rebuilds consumer trust and restores an online environment that respects privacy for end users.”

By restricting further data transmission of Meta users to the US, the EPDB has instructed complete ceasing of the unlawful processing, including storage, in the U.S. of personal data of European users transferred in violation of the GDPR, within 6 months after notification of the IE SA’s final decision. As per the final order, EPDB deemed it necessary to both suspend the data processing as well as impose an administrative fine on Meta to achieve “the objective of ensuring effective enforcement of a GDPR through effective and dissuasive corrective measures.”