> Abusing your position as a desirable market to impose post-hoc tariffs via an endless stream of fines is questionable IMO.
There's a simple scenario in which Meta wouldn't have had to pay these fines: Don't break the law. And don't continue breaking the law after being told to stop it. It's not abusive to remind companies that actions have consequences in the language they understand and respect.
Do you honestly believe that Meta's hundreds (possibly thousands) of both full-time and contracted out lawyers would collectively advise them to break the law? Knowing full well the outcome would be $Billions in fines?
EU to US data transfers used to be okay for years, then there was a single ruling that brought that into question. Because government moves slow, there hasn't been a new framework implemented. Ruling for Billions in fines during the interim, while the US government and EU are still negotiating the details of the new framework is not an environment conducive to full compliance. US companies would essentially need to stop operating in the EU altogether if they wanted to be fully compliant.
Combine this with giant companies which also are slow moving (albeit faster than government) and you have a recipe for never-ending fines no matter how much you try to comply in good faith.
Corporate lawyering is basically about finding ways to break the spirit or letter of the law without being punished for it. Or to limit the punishment so that it is exceeded by the likely profit of breaking the law. So yes, Meta's thousands of lawyers probably recommend breaking (or "interpreting" certain laws in certain ways all the time because the cost/benefit analysis makes it worth it. And sometimes they miscalculate and the fines are larger than the profit or result in some unexpected political blowback. See also Apple's approach to its App Store and payment policies.
EU to US data transfers were questionable for years, until a whole string of rulings through several levels of national and E.U. courts made clear that they weren't under some circumstances. Other companies have found ways to deal with that, Meta obviously could have, but chose not to (because profits). One obvious way would be for Meta to save E.U. customer data on E.U. servers exclusively, splitting the social graph (and advertising shadow profiles, which likely is what they really care about). Good faith does not enter into the equation, would be my guess.
There was also a grace period during which time Meta made no substantive efforts to come into compliance. If Meta had even a half-baked EU solution they would not be so thoroughly and repeatedly punished.
Yeah, standing up a data center is not trivial, but Meta also hires the best in the world. Move fast and break things. In this case they didn’t even move at a medium speed, so they get no sympathy from me.
> Do you honestly believe that Meta's hundreds (possibly thousands) of both full-time and contracted out lawyers would collectively advise them to break the law? Knowing full well the outcome would be $Billions in fines?
Yes, absolutely. Laws are never clear and require human beings to interpret.
Lawyers jobs are about assessing risk. While they might not have explicitly said "you will get fined $B", they will definitely say "here is the likelihood that the EU fines you" and then meta management would make a strategic (e.g. do we want to risk this based on how much money we can profit) decision based on that.
I believe they can still at any point stop operating in the EU and not pay the fine? How would the EU implement the fine if Meta pulled out? I thought their leverage was just the threat of blocking the service in the EU.
Meta has plenty of EU-based assets which are not liquid enough to just pull out in a matter of months. The EU and national governments would also likely have options under insolvency laws and criminal statutes to freeze some of Meta's assets in the EU if the company made an attempt to pull out to avoid some fines. Of course Meta won't. The EU is a valuable market and even if Meta would stop making any profit (they won't), it can't just leave that market to the competition.
Does this apply to foreign companies? I’ve never heard of such a thing.
If it was a domestic company, of course, assets could just be seized to pay the fine plus whatever non payment penalty. Is there a criminal charge after asset seizure? Or does this just never happen because there is no incentive to do it domestically?
Not a lawyer, but shutting down a subsidiary to avoid overwhelming fines is de facto messing with the insolvency laws, isn't it? At least in Germany that is a criminal offense for which the executives of the (parent) company are ultimately liable.
Plus, Meta actually is a domestic company in the E.U. They handle all their E.U. business through an Irish subsidiary (which is why the Irish data protection agency is responsible for all of this) and they also have subsidiaries to manage political and customer relations in many other E.U. countries, as well as presumably data centers, etc. Removing all of this would be a big project and would give government agencies plenty of time to seize assets. These assets could also include non-tangibles, i.e. the .de/.fr domains for their websites.
The law is almost a moving target, based on the whims of the current political zeitgeist and public opinion.
And law isn't binary, yes/no. Much US law is very murky and ambiguous. It takes litigation and court action to actually figure out what the poorly worded laws mean. Congress is really bad at creating law for some reason.
The cost of setting up additional data centers in Europe and re-architecting your application with a different replication strategy is probably 10x-50x the fine. It would also take years and a sizable fraction of the engineering team to make it happen and there will be significant performance and reliability issues throughout the process. Easier to pay the fine and lobby for rules changes for a decade.
There's a simple scenario in which Meta wouldn't have had to pay these fines: Don't break the law. And don't continue breaking the law after being told to stop it. It's not abusive to remind companies that actions have consequences in the language they understand and respect.