Thursday 24 May 2018

Facebook fails to stall data referral to European court

Facebook’s European headquarters in Dublin (Niall Carson/PA)
Facebook’s European headquarters in Dublin (Niall Carson/PA)

Aodhan O'Faolain

Facebook is pressing ahead with its bid to persuade the Supreme Court to hear an appeal over the referral of key issues to the Court of Justice of the EU concerning the validity or otherwise of EU-US data transfer channels.

Ms Justice Caroline Costello on Wednesday directed delivery “immediately” of 11 questions for determination by the CJEU after refusing Facebook a stay pending the outcome of its bid for an appeal against her October 2017 judgment approving a referral.

The judge ruled Facebook had no arguable case concerning whether an appeal court could overturn or vary a referral decision. An earlier Supreme Court decision that an appellate court has no jurisdiction to overturn a referral decision is binding on her and Facebook’s arguments otherwise were “without merit” and “misplaced”, she said.

Dismissing Facebook’s argument its interests would be prejudiced if a stay was refused, the judge said the existing delays have already “potentially gravely prejudiced” the Data Protection Commissioner, Austrian lawyer Max Schrems who made the initial complaint over his data transfers, and millions of data subjects throughout the EEA whose data continues to be processed under the disputed European Commission decisions approving EU-US data transfer channels.

The court shares the DPC’s concerns that data of millions of data subjects may continue to be processed unlawfully, she said.

She was critical of Facebook’s conduct of the litigation in relation to its intended reliance in any appeal on the coming into effect of the General Data Protection Regulation on May 25th and said that conduct weighed against even a limited stay.

The court will cause “the least injustice” by refusing a stay and directing the immediate delivery of the reference to the Court of Justice, she ruled.

Earlier, she noted Facebook intends to advance arguments before the Supreme Court the referral is moot or pointless because of the GDPR coming into effect on May 25th.

The judge said Facebook had told her, on day 15 of the 21 day High Court hearing, it was considering  the fact the GDPR would come into effect on May 25th.

When she asked whether that went to mootness, counsel for Facebook had said, if there was to be a referral, the GDPR would have come into effect by the time the matter was heard by the CJEU. Counsel had also said the prospects were “not high” for any referral being decided before the replacement of the Data Protection Directive, the basis of the concerns whether there was adequate protection for data privacy rights of EU citizens.

That was the “sole discussion” on the GDPR point in the High Court case, she said.

If Facebook had wished to argue the reference would be moot because of the GDPR, that should have been done “explicitly and clearly” and not in that “oblique passing fashion”.

Facebook had not alerted the parties and the court this was a point on which it intended to place “such reliance”.  The fact the point was only now being raised gave rise to “considerable concern” as to Facebook’s conduct of the case and the manner in which it has dealt with the court.

Facebook had not alerted the court that, as far as Facebook was concerned, there was a “clock ticking down” which meant the case was not expedited so as to ensure the issues were not decided by passage of time.

Last month, having heard detailed arguments from the parties, Ms Justice Costello finalised eleven questions for determination by the CJEU. The questions raise significant issues of EU law with huge implications, including whether the High Court was correct in finding there is "mass indiscriminate processing" of data by US government agencies under the PRISM and Upstream programmes authorised there. Other questions concern whether the Privacy Shield Decision and other measures in the US afford adequate protection for EU citizens whose data is transferred there.

On April 30th, Facebook’s  lawyers indicated it was seeking a “leapfrog” appeal to the Supreme Court and sought a stay on the referral, made in proceedings by the DPC concerning a complaint by Mr Schrems that transfer of his personal Facebook data by Facebook Ireland to the US breached his data privacy rights as an EU citizen.

Ms Justice Costello agreed to refer after concurring with the Commissioner there are “well founded" grounds for believing the EC decisions approving data transfer channels, known as Standard Contractual Clauses (SCCs), are invalid.

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