Why did the European Union fine Facebook's Meta a record $1.3 billion?

The European Union (EU) fined Facebook's parent company Meta $1.3 billion (1.2 billion Euros) and ordered the company to stop transferring European users' data to American servers.

The fine is the largest ever charged under the General Data Protection Regulation, well above 2021's Amazon $746 million fee, according to Fox Business.

The news outlet explains that the punishment came after an investigation by Ireland's Data Protection Commission, the lead data regulator for the EU.

The investigation showed that Facebook continued to transfer data from European users to US servers after a 2020 court order prohibiting it.

Meta said it would challenge the fine, calling it "flawed and unjustified," according to company declarations collected by The Associated Press (AP).

According to The New York Times, the fine could refer to data related to photos, friend connections, and direct messages stored by the company.

Those restrictions could financially affect Meta's advertisement business by hurting the company's ability to target Facebook ads to specific audiences.

Mark Zuckerberg's company said in a statement, as recounted by Fox Business, that "without the ability to transfer data across borders," the internet risks becoming "national and regional silos."

However, the free-moving tendency that data used to follow is changing. According to The New York Times, companies are increasingly asked to store data within the country it is collected from.

The European case relates to a long-standing battle by internet activists to protect users' privacy from American intelligence agencies and surveillance services.

After Edward Snowden leaked information about the National Security Agency's surveillance of citizens, Austrian activist Max Schrems sued to invalidate an EU-US data-sharing agreement.

In 2020, the EU's highest court sided with Schrems and declared the agreement null. According to the AP, the court said it didn't do enough to protect residents from American spy agencies.

The AP qualifies the incident as a clash between the EU's strict view on data privacy and the comparatively lax perception of the US Government, which lacks a Federal data protection law.

In any case, Meta's fine could prescribe soon as both power players reach a new agreement to allow data flow from Europe to the US.

Discussions took place at the beginning of 2023. According to The New York Times, President Biden believes the new deal will bring "unprecedented protections for data privacy and security" to Americans.

However, some counterparts are more skeptical. "If it is not in line with EU law, we or another group will likely challenge it," the Austrian activist Max Schrem said in a statement.