05/01/23

EUROPE: EU clashes with Ireland on big tech as Dublin vows to sue Brussels for ‘overreach’.

As published on telegraph.co.uk, Thursday 5 January, 2023.

Ireland plans to sue the EU for “overreach”, as a row between Dublin and Brussels over how to regulate Big Tech escalates.

Ireland’s Data Protection Commission (DPC) has announced plans to take the European Data Protection Supervision Board (EDPB) to the EU Court of Justice, accusing the Brussels-based body of overstepping its authority.

The move highlights the growing tension between Brussels and Dublin over how to regulate Big Tech companies such as Apple, Google, and Meta, Facebook and Instagram’s parent company.

Division has been apparent for years but the escalation to legal action comes after the EU allegedly tried to pressure Ireland into broadening an investigation into Meta.

In a rare public statement, the DPC said Brussels had put pressure on it to extend an investigation into whether Meta was breaking EU data protection laws by forcing users to accept personalised online adverts.

The EDPB wanted to transform the investigation into one “that would span all of Facebook and Instagram’s data processing operations” and judge if they were lawful or not. Ireland claims the move was against the law.

As the EU headquarters for most of Silicon Valley’s largest tech companies, the DPC is the main data regulator for these businesses across the bloc. The EDPB, which includes representatives from data protection regulators across the EU, oversees the DPC.

The most recent split comes after more than a decade of EU unease at Ireland’s perceived laissez-faire stance on regulating Big Tech. Other European countries, most notably France and Norway are understood to be unhappy with what they see as Ireland’s light regulatory touch and want to see a harder crackdown on US tech giants.

One source familiar with the matter said: “The DPC is entirely isolated among its peers. And it is now asking Europe’s highest court to tell it to not do its job.”

Jonathan Kirsop, a partner at City law firm Pinsent Masons, said: “The strength of the DPC’s statement, notably the reference to ‘overreach’ by the EDPB, is striking and is indicative of a long-running tension.

“Although the DPC has recently been imposing significant fines, particularly on technology companies, it has been criticised by other authorities for not being strong enough.”

The DPC declined to comment.

The EDPB said it would be "premature" to comment on the DPC's vow of legal action.

The legal threat came as the DPC handed down a €390m (£345m) fine to Meta for breaking EU data protection laws. The fine, which related to breaches at both Facebook and Meta, was the culmination of the investigation at the heart of the row between the DPC and the EDPB.

Ireland’s data protection commissioner, Helen Dixon, said in October 2021 that “a fining range of between €28m and €36m” was better suited to Meta. However, Brussels pressured Dublin into handing down a bigger fine.

The DPC now has four weeks to file its legal complaint at the EU Court of Justice.

Meta has announced plans to appeal the €390m data protection fine.

A spokesman said that during the five years since the EU's General Data Protection Regulation came into force, the DPC did not object to how it handled users' personal data.

They added that Brussels overruling its main regulator in Ireland showed just how far the overreach had gone.

Ireland has benefited from billions of euros in tax revenues generated by tech companies’ sales across all of the EU’s 27 member states.

OECD figures from 2021 show that 16pc of Ireland’s £423bn gross domestic product that year came from taxes on US tech businesses.

The schism between the EU and Ireland was first laid bare in 2016 when Brussels ordered Apple to pay €13bn (£11.5bn) in back taxes, ruling Ireland had broken state aid rules by striking a bespoke tax deal with the iPhone maker. The ruling was overturned on appeal in 2020 but the European Commission is challenging that verdict.

Johnny Ryan, a senior fellow at the Open Markets Institute who is spearheading a lawsuit against US tech companies for allegedly surveilling users unlawfully online, said Wednesday’s decision was “the beginning of serious EU enforcement against Big Tech”.