Facebook has confirmed that the Irish Data Protection Commissioner (DPC) has issued the social network with a preliminary order to stop transferring EU user data to the US.
The order has been described as "well progressed" according to the Independent and could have wider implications for tech companies that transfer data across the Atlantic.
It's the first move by the DPC since July, when the European Court of Justice ruled that Privacy Shield, the mechanism that companies used to transfer EU data to the US, was no longer valid now that GDPR is in force.
The ruling also stated 'standard contractual clauses' (SCCs) were valid as a data transfer mechanism, provided that data controllers carry out assessments on whether it's possible for these contractual terms to be upheld in any country where invasive surveillance laws exist, such as the US.
The DCP has suggested to Facebook that SCCs cannot in practice be used for data transfer between the EU and the US, according to the social network's vice president of global affairs and communications, and former UK deputy prime minister, Nick Clegg.
While the inquiry is still in its early stages, Clegg has said it could have far-reaching effects on the businesses that rely on SCCs and could cause near-term chaos for the global economy.
"The impact would be felt by businesses large and small, across multiple sectors," Clegg wrote in a blog post. "In the worst-case scenario, this could mean that a small tech startup in Germany would no longer be able to use a US-based cloud provider. A Spanish product development company could no longer be able to run an operation across multiple time zones. A French retailer may find they can no longer maintain a call centre in Morocco."
"The effects would reach beyond the business world, and could impact critical public services such as health and education. Ireland's Covid Tracking App states, in its terms, that it relies on SCCs as one of a number of mechanisms to transfer data to one of its processors in the US. International cloud providers and email platforms provide services to schools, Universities and hospitals across Europe. Millions of people use video conferencing software every day, to keep in touch with friends and family who live in different countries."
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