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Bloomberg — Meta Platforms Inc. (FB) warned that it may be hit by hefty data-protection fines in the European Union when privacy watchdogs wrap up probes into the social network giant.
The Facebook owner said in its first-quarter report that it has “accrued significant amounts for loss contingencies” linked to probes under the bloc’s tough General Data Protection Regulation.
“We believe there is a reasonable possibility that additional accruals for losses related to these matters could be material in the aggregate,” the company said.
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GDPR took effect in 2018, empowering authorities to issue fines of as much as 4% of a company’s annual sales. The rules put the regulators in charge of monitoring violations and investigating complaints, and also turned Ireland’s watchdog overnight into the lead regulator probing a handful of all powerful U.S. tech firms --such as Meta -- that have an EU base in the country.
Meanwhile Meta said it welcomed a EU-U.S. political deal on a new data-transfer pact, which could potentially avoid a doomsday scenario for firms that rely on free flows of information across the Atlantic.
The EU and U.S. agreed in principle to a new accord after a previous arrangement was struck down due to concerns over the power of American agencies to snoop on the information without adequate privacy safeguards.
Meta said the Irish data-privacy watchdog may issue a key decision on use of so-called standard contractual clauses “as early as the second half of 2022.”
The clauses are a workaround that allowed data to flow, but their use has sparked similar concerns over U.S. snooping.
