Facebook has set aside over €1bn for data privacy fines it expects to pay to data protection authorities in Europe, particularly Ireland’s Data Protection Commission.
The figure is included in new accounts lodged by Facebook – now corporately rebranded as ‘Meta’ – that also show Mark Zuckerberg’s firm recorded an rise in revenue booked at its Irish international office of €40.6bn, an increase of €6.3bn on 2019.
The €1bn allocation for fines reflects the likelihood of more decisions on existing Irish DPC investigations against the social media giant in the coming year.
Helen Dixon’s office has over 10 probes underway against Facebook, Whatsapp and Instagram.
At least three major decisions are expected relating to companies owned by Facebook.
Two of these relate to Instagram and how it handles the personal data of children on its platforms.
But the main decision from the Irish watchdog will be the closely-watched case involving Facebook and data transfers across the Atlantic. Industry observers say that this could be one of Europe’s largest ‘big tech’ privacy decisions next year.
In September, Whatsapp was fined €225m by the Irish DPC. However, that has been appealed by Facebook after the amount was increased following consultation with European data protection counterparts.
The scale of fines issued by the Irish regulator will be closely watched by other European data watchdogs, some of whom claim that Ireland’s data watchdog is too soft on big tech firms.
The WhatsApp fine was the first large financial penalty that the Irish DPC had imposed on a multinational tech company. Last year, Helen Dixon’s office levied a €450,000 fine on Twitter for delaying notification of a data breach. The size of the fine was criticised by some European regulators as being too low.
Facebook’s Irish accounts also say that its profit before tax in Ireland grew from €482m in 2019 to €890m in 2020, an increase of 85pc.
Like some other tech multinational that base international headquarters in Ireland, Facebook’s accounting process here offshores most of the declared revenue for tax purposes elsewhere.
It paid €267m in corporation tax here last year, compared with €173m in 2019.
However, the company says that it agreed with Revenue ‘to resolve certain tax matters relating to prior tax years’.
This, Facebook says, resulted in additional taxes of €35m.
The company says that its current tax effective rate for the year was 29.9pc.
“Ireland is an important hub for global innovation, where we continue to grow and invest through our international headquarters,” said Gareth Lambe, head of Meta (Facebook) in Ireland.
“Throughout the pandemic, we’ve seen the positive impact our apps have for businesses and advertisers, many of whom have had to shift their operations online. As we look ahead and start building the metaverse, we’re excited to create more opportunities for businesses, developers and creators as well as grow our operations in Ireland.”