Tech giant Meta has been ordered to pay a nearly $1.3 billion dollar privacy fine in the European Union
LEILA FADEL, HOST:
Tech giant Meta, which owns Facebook, has been fined nearly $1.3 billion for breaching privacy standards in the European Union. Regulators say it did not effectively protect users’ data from American advertisers and spy agencies. Joining us now to discuss is Wall Street Journal tech reporter Sam Schechner.
Hi, Sam.
SAM SCHECHNER: Hey. Thanks for having me.
FADEL: So, Sam – thank you for being here. Sam, how consequential is this decision? That’s a lot of money.
SCHECHNER: It is a lot of money. It is actually a record for the European Union under its privacy law, the GDPR. And, you know, even if it’s not that much in the context of Meta’s profit, it’s still a big chunk. And then there are the implications for its services going forward as well.
FADEL: And what are those implications? I mean, what’s the message that they’re sending here? The EU has had privacy concerns regarding this tech giant for years, right?
SCHECHNER: And this actually goes beyond Meta. There’s been a kind of brewing dispute between the EU and the U.S. over data standards and whether or not and how surveillance agencies should be able to access the data of Europeans. And so this ruling really raises pressure on Washington and Brussels to strike a deal – something they’ve been working on, actually, for more than a year – to paper over these differences and allow the data, not just for Meta but for thousands of other companies, to keep flowing.
FADEL: How is Meta responding to this decision?
SCHECHNER: Well, Meta says, first of all, that they’re going to appeal the decision, and they’re also going to seek a stay to suspend the orders to, you know, stop sending data to the U.S. But, more broadly, they think the decision is flawed and sets a dangerous precedent.
FADEL: But what does Meta have to do to come in line with EU standards?
SCHECHNER: Well, it’s a big, big lift. You know, people close to the company have basically said they’d have to silo off data from Europeans from the servers in the U.S., which is a gargantuan task. Most of that stuff is already stored in the U.S. We’re talking, you know, photos, private messages, all the kind of behind-the-scenes data used for ad targeting, which is stored in the U.S. And, you know, engineering that within – by fall seems a tall order for the company.
FADEL: And if it doesn’t come in line with EU regulations, what does that mean for Meta’s future and other tech giants’ future in Europe?
SCHECHNER: Well, Meta has said that if the EU and the U.S. can’t strike a replacement deal that it can rely on that it might have to suspend offering some services in the EU, and the same could end up being true for other companies. Of course, the proof will be in the pudding. You know, the EU represents a significant chunk of Meta’s revenue, and I think the company would have a hefty incentive to solve that tough engineering challenge.
FADEL: And are there implications for Meta in the U.S. and in other places around the world?
SCHECHNER: Well, you know, I think, in general, there’s an effort underway by the Europeans to leverage their privacy laws to force changes to U.S. surveillance practices. And, you know, that’s something the Biden administration, actually, has started to do. They issued an executive order – do it. And so that could affect some of the ways in which data is collected. And it could give people outside the U.S. and inside the U.S. new means to challenge surveillance, both in the U.S. and overseas.
FADEL: Wall Street Journal tech reporter Sam Schechner.
Thank you so much, Sam.
SCHECHNER: It’s been a pleasure.
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