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Warning: $1.2 billion fine imposed on Meta is a warning sign for Israeli companies

Warning: $1.2 billion fine imposed on Meta is a warning sign for Israeli companies

 


The hefty €1.2 billion fine that Meta received from the EU last week for transferring Facebook users’ information from the EU to the US is an unprecedented amount for a breach of the EU Privacy Law (GDPR). It also sends a clear message to the company and other technology platforms about how far the EU intends to go to protect its citizens’ information. Moreover, the fines imposed are a clear warning sign for Israel and its high-tech industry. Israel and its tech industry could be similarly disadvantaged as Meta, with one key difference. That means it will be much harder for local businesses to absorb the huge fines.

The fines imposed on Meta were announced by the Irish Data Protection Board, but were decided by the European Data Protection Board (EDPB) and address privacy violations for all EU residents. . The decision follows a 2020 ruling by the European Court of Justice, the European Union’s highest court on European Union law, which ruled that US companies may not transfer information from the European Union to the European Union. It was to invalidate an agreement signed in 2016 that allowed America. The agreement was voided on grounds of inconsistency with European Union privacy laws, including because it did not prevent US spy agencies from accessing information.

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Meta Dublin Office.

(Photo: Derrick P. Hudson/Shutterstock)

Despite this decision, the European Commission fined Facebook for continuing to transfer information to the United States. Along with the fine, Meta was banned from transferring information collected from Facebook users in the European Union to the United States. The decision does not affect Meta’s other platforms Instagram, WhatsApp and Messenger.

Meta has been given five months to implement the ruling, and has also announced that it plans to appeal the ruling and fine, which could take months, if not years. It is expected to be delayed. Additionally, the United States and the coalition are negotiating a new intelligence-sharing agreement. Signing such an agreement could render the Commission’s decision meaningless.

Even if the decisions and fines are reversed in light of the new Transfer of Information Agreement, just imposing them in light of the current situation is an example of the union’s determination to protect residents’ information.

Israel is currently negotiating with the European Union to renew its compliance with European Union privacy laws. This compliance is based on the fact that Israeli privacy laws provide adequate protection and permit information about EU residents to be transferred to Israel and processed as if Israel were part of the European Union. says there is.

If the compliance renewal is not approved, Israeli companies are actually in the same situation as Meta, only with more serious consequences. First, there would be fewer practical barriers preventing the coalition from imposing huge fines or other sanctions on these companies. Because they don’t have the power, lobbying strength, or user base to make the meta such a force.

Moreover, fines for start-ups will have a bigger impact. Fines are only 10% of the global revenues of fined companies, but Meta is typically a well-established company with large profits. For a startup fighting for every penny of profit, a 10% fine can be fatal.

“Without the ability to transfer data across borders, the internet risks fragmenting into national and regional silos,” Mehta said. The statement is not that the EU is against information transfers between nations, but conveniently ignores the fact that information about its population reaching the United States falls prey to the country’s intelligence services.

While this fine is the highest a company could be charged after violating the GDPR, it is far from the first fine. Amazon was fined €746 million in July 2021 for improper procedures for obtaining user consent to show targeted ads. Meta itself has been fined four times in the past, ranging from €225 million to €405 million, for crimes including child privacy violations on Instagram and information leaks from Facebook.

If the unprecedented fines can be attributed to one person, the credit goes to Austrian privacy activist Max Schrems. In 2020, it was Schrems who filed a petition in the European Union courts against the information transfer agreement between the EU and the US. It was the acceptance of this petition that led to Meta’s current predicament. Schrems now estimates that only major changes will allow Meta to transfer information from the EU to the US.

“Israel will be directly impacted by this decision and fines both in terms of reduced likelihood of compliance with European law and devastating fines imposed on companies transferring information to Israel. European demands may result in restrictions on the transfer of information from Israel to the United States,” Dr. Tehira Schwarz Altshuller of the Israel Institute for Democracy told Karkarist. “This is a fine related to the fact that US security officials are spying on the personal data of European Union residents transferred to the US in a way that fails to guarantee a level of protection equivalent to the GDPR.” , The Privacy Protection Act has comprehensive exemptions for security authorities and another exception exists in the Shinbet Act. These exemptions do not meet EU requirements. Meta has been fined, according to the ruling. “

Another aspect that can make compliance renewal difficult is judicial reform. “The basis for decisions about compliance also has to do with the independence of the judicial system and how governments use information,” said Professor Eran Toch, Program Director, Faculty of Industrial Engineering and Management, Tel Aviv University. Faculty of Engineering. “The previous decision on compliance in 2011 included a reference to the fact that Israel does not have a written constitution, but the judicial system has a basic law and extensive use of precedent. Reforms threaten this foundation, and countries like Russia and Turkey have not been adhered to, partly due to the lack of independence in their judicial systems.

“Without compliance, companies receiving information from European companies must invest significant resources to meet regulatory requirements. Many companies cannot afford these costs, and many European Companies will not want to do business,” said Amnon Shashua, speaking of the dangers of losing compliance, saying that if the coalition determines there is a violation of democracy, companies like Mobileye will not allow users to operate in Israel. It said it would no longer be able to retain information, which would lead to retention of user information in Israel. “The company will gradually withdraw from Israel. The Ministry of Justice’s Privacy Protection Council raised the issue of compliance in an official letter to Justice Minister Yariv Levin, but the minister simply ignored the letter.”

Sources

1/ https://Google.com/

2/ https://www.calcalistech.com/ctechnews/article/hjbnw9elh

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