Facebook may face prospect of data transfer ban after Irish ruling

Ireland's High Court on Friday rejected Facebook's bid to block a regulatory probe that could potentially stop data transfers from the European Union to the United States.

"I refuse all of the reliefs sought by (Facebook Ireland) and dismiss the claims made by it in the proceedings," read a statement from High Court judge David Barniville, dismissing its challenge against the Data Protection Commissioner's decision to hold a probe.

"FBI has not established any basis for impugning the DPC decision or the PDD or the procedures for the inquiry adopted by the DPC," the judgment said.

The case originates from EU concern that US government's surveillance may not respect privacy rights of EU citizens.

Ireland's Data Protection Commissioner (DPC) had launched an inquiry in August. It had issued a provisional order saying that the main mechanism Facebook uses to transfer EU user data to the United States "cannot in practice be used". Facebook had challenged the inquiry and the Preliminary Draft Decision (PDD).

Facebook had said that the inquiry threatened "devastating" and "irreversible" consequences for its business, which relies on processing user data to serve targeted online ads. The HIgh Court rejected the challenge.

While the decision does not trigger an immediate halt to data flows, Austrian privacy activist Max Schrems, who forced the Irish data regulator to act in a series of legal actions over the past eight years, said he believed the decision made it inevitable.

"After eight years, the DPC is now required to stop Facebook's EU-U.S. data transfers, likely before summer," he said.

A Facebook spokesman said the company looked forward to defending its compliance with EU data rules as the Irish regulator's provisional order "could be damaging not only to Facebook, but also to users and other businesses".

(With inputs from agencies)