Adrian Weckler: Meta fine means Ireland could be in for €14bn windfall – whether we want it or not

The first €1.2bn was announced yesterday, when the Irish Data Protection Commissioner slapped Facebook parent Meta with the biggest-ever GDPR fine. That comes on top of another €1.3bn of fines collected from Mark Zuckerberg’s tech giant in the last two years in Dublin. And there’s more to come.

Under current rules, Ireland gets to keep all of the tech fines imposed by commissioner Helen Dixon, even though the punishment is supposed to be on behalf of the EU.

Today, we’ll start to find out whether Ireland may be forced – against its wishes – to accept almost €13bn of back taxes from Apple that the European Commission says must be paid.

Ironically, in both cases, Irish authorities and regulators have fought against getting the cash.

In the case of the €1.2bn Meta fine, Dublin’s initial draft decision argued a fine would be overkill and inconsistent with other GDPR decisions.

But under EU law, the Irish office had to circulate the draft decision among other European regulators. Four of them – Germany, France, Spain and Austria – said Meta should be hit with a big fine.

The issue was decided by the European Data Protection Board, which acts as a referee when disagreements on big decisions crop up. It sided with the other European regulators, saying that Meta’s infringement was of such a “significant nature, gravity and duration” that it deserved a big fine.

In other words, France, Germany and Spain – often Ireland’s harshest critics on Big Tech regulation – just effectively handed the Irish taxpayer more than €1bn.

It’s not the first time the Irish data protection regulator has had a proposed fine revised upwards after deliberation by European peers. Ireland has picked up some flak in recent years for appearing to err on the low side when it comes to the size of Big Tech fines.

That is always robustly defended by the Irish office, which points out that to cash-rich giants such as Meta who can swallow €1bn fines easily, the more acute punishment is around orders to restructure their business. That might be why 43 of the 47 European regulators who perused this week’s Meta decision didn’t take issue with her decision not to impose a fine and appeared to agree with Ms Dixon’s assessment that the real punishment – an order on Facebook to suspend data transfers between the EU and the US – was a much meatier, more severe sanction.

Even so, to casual observers, it’s remarkable how Ireland often ends up seeming to minimise the amount of Big Tech punishment cash, or back-tax payouts, that other regulators and Commission officials insist is due to the exchequer.

Economists who lean toward cynicism might point out this no-thanks-guv culture has not exactly been a bad one for Ireland. It may be no coincidence that the period of Ireland’s biggest tax and regulatory battles with European peers seems to have run parallel with unprecedented corporate tax riches from the sectors affected most by such dues. Any US multinational looking for a European base, and who has followed the decade-long tax case of Brussels vs Ireland and Apple, must think that Ireland will go to the mattresses for low taxes and sovereign tax policy.

As for the other particulars of the Meta decision itself, there are a few things worth noting.

First, the company has five months to put the data suspension into action, meaning no-one will see an immediate disruption in their social media use. The company has also said it will appeal, potentially dragging it out even further.

Second, it’s only Facebook data that’s affected, not Instagram or WhatsApp, even though they’re owned by the same overall company.

Third, it’s likely that the US and the EU will have a new transatlantic data agreement (called the ‘Data Privacy Framework’) in place later this year, meaning that Meta may not have to abide by this ruling anyway, because it may be superseded.

This is what has always happened in the past. The European courts say that a data transfer goes against GDPR because of US surveillance, whereupon internet disruption is threatened by privacy regulators. But the EU and US come up with a patchwork transatlantic agreement to get over the crisis and we’re back to square one.

Meta has almost 3,000 staff in Dublin with thousands of extra contractors also employed.

In a response to the fine, the company’s global affairs president, Nick Clegg, said the company is “disappointed to have been singled out” for using the same legal mechanisms – so-called ‘standard contractual clauses’ – as other companies in Europe.

“This decision is flawed, unjustified and sets a dangerous precedent for the countless other companies transferring data between the EU and US,” he said.

He may have a point on being the only Big Tech company to be punished for using what is a common commercial practice. But Ireland, while shaking its head in sympathy, will take the cash anyway.