Digitrade Digest #95 :US, Taiwan enter trade deal, Meta fined €1.2BN by EDPB and more…

Big Tech

Meta ordered to suspend Facebook EU data flows as it’s hit with record €1.2BN privacy fine under GDPR

TechCrunch: It’s finally happened: Meta, the company formerly known as Facebook, has been hit with a formal suspension order requiring it to stop exporting European Union user data to the U.S. for processing.

Today the European Data Protection Board (EDPB) announced that Meta has been fined €1.2 billion (close to $1.3 billion) — which the Board confirmed is the largest fine ever issued under the bloc’s General Data Protection Regulation (GDPR). (The prior record goes to Amazon which was stung for $887 million for misusing customers data for ad targeting back in 2021.)

Meta’s sanction is for breaching conditions set out in the pan-EU regulation governing transfers of personal data to so-called third countries (in this case the US) without ensuring adequate protections for people’s information.

European judges have previously found U.S. surveillance practices to conflict with EU privacy rights.

In a press release announcing today’s decision the EDPB’s chair, Andrea Jelinek, said:

The EDPB found that Meta IE’s [Ireland’s] infringement is very serious since it concerns transfers that are systematic, repetitive and continuous. Facebook has millions of users in Europe, so the volume of personal data transferred is massive. The unprecedented fine is a strong signal to organisations that serious infringements have far-reaching consequences.

At the time of writing the Irish Data Protection Commission (DPC), the body responsible for implementing the EDPB’s binding decision, had not provided comment. (But its final decision can be found here.)

Meta quickly put out a blog post with its response to the suspension order in which it confirmed it will appeal — dubbing the fine “unjustified and unnecessary”. It also sought to blame the issue on a conflict between EU and U.S. law, rather than its own privacy practices, with Nick Clegg, president, global affairs, and Jennifer Newstead, chief legal officer, writing:

We are appealing these decisions and will immediately seek a stay with the courts who can pause the implementation deadlines, given the harm that these orders would cause, including to the millions of people who use Facebook every day.

Meta’s $1.3 Billion Privacy Fine Propels US-EU Data Plan (1)

BloombergLaw: Meta Platforms Inc.’s record €1.2 billion ($1.3 billion) fine over European privacy concerns adds urgency to Biden administration plans to update intelligence agency safeguards and create a court to hear complaints about US surveillance.

The measures are part of a new pact on trans-Atlantic data flows that, if cemented, could give Meta and thousands of other companies a way to avoid such scrutiny. Concerns that Europeans’ personal information is left unprotected from US surveillance have put businesses in legal limbo since the scrapping of the EU-US Privacy Shield agreement on information transfers in 2020.

US officials working on the latest diplomatic deal with the European Union are “accelerating” their timeline for implementation, according to Alex Joel, a former US intelligence officer who’s currently a law professor at American University. The White House gave agencies until the fall to fulfill their side of the deal. The pact also needs final approval from the EU.

Meta faces a regulatory deadline to stop transferring data to the US in the fall as part of the Irish Data Protection Commission’s Monday decision. The social media giant has called the decision “flawed” and intends to appeal it.

The US government has been following the EU privacy action against Meta “very closely,” and is aiming for its new policy pact with the EU to go into effect by the summer, according to Caitlin Fennessy, a former Commerce Department official whose work focused on cross-border data protections.

Big Tech rivals enter fight over U.S. digital trade

TheWashingtonPost: A coalition of technology companies are calling out efforts by the tech giants to shape the United States’ stance on digital trade, joining a growing cast of lawmakers and advocacy groups taking aim at Big Tech’s role in the Indo-Pacific negotiations.

On Tuesday, companies including email provider Proton, review site Yelp and pricing service Kelkoo wrote to the Biden administration expressing concern that Big Tech companies are trying to “block policies that would prohibit their anticompetitive practices” through trade talks.

And on Thursday, they are kicking off a public campaign urging public officials to reject what they call attempts by their Silicon Valley rivals to “overrule democratically passed anti-monopoly laws.”

They become the latest entrants to the increasingly contentious debate over digital trade, which has emerged as a proxy battle in broader global efforts to rein in giants like Amazon, Google, Apple and Meta.

U.S. negotiators for months have been seeking to hash out trade terms with 13 other countries including Japan, North Korea and Australia, one of the first major tests of the administration’s approach to issues including digital trade policy.

The companies took issue with what they called a “lack of transparency” around the talks, writing in their letter to the Commerce Department and U.S. Trade Representative (USTR) that it “has allowed the views of a few digital firms to dominate while the small and medium tech firms that are the backbone of the industry have been largely excluded from the process.”

Lawmakers on both sides of the aisle and a slew of consumer advocacy groups have echoed the concerns in recent weeks:

· A group of Democratic lawmakers led by Sen. Elizabeth Warren (D-Mass.) wrote to USTR and Commerce last month voicing concern over industry efforts to “weaponize these digital trade rules” to fend off tech regulations globally, as we wrote.

· A group of Republican lawmakers sent a similar letter this month urging the Biden administration not to adopt in its Indo-Pacific trade talks a proposal “that binds the United States to competition policies that Congress may soon reject,” as Bloomberg News reported.

· A coalition of consumer advocacy groups in March called on Commerce and USTR “not to replicate the Big-Tech-favored terms,” as we wrote.

The issue has now mobilized many of the same lawmakers, advocates and smaller tech companies — including Proton and Yelp — that rallied unsuccessfully last Congress to pass major antitrust legislation targeting the tech giants.

USTR spokesman Sam Michel said in a statement that their Indo-Pacific trade framework “includes high-standard provisions designed to promote inclusive, sustainable growth in the digital economy, including online consumer protections.”

“Ambassador Tai has always said we need to expand the policymaking conversation to include diverse perspectives, not just those that can afford Washington lobbyists,” Michel said, adding that the agency has held numerous briefings with lawmakers and outside groups.


US, Taiwan reach deal on first part of ’21st Century’ trade pact

Reuters: The U.S. and Taiwan reached agreement on the first part of their "21st Century" trade initiative, covering customs and border procedures, regulatory practices, and small business, the U.S. Trade Representative’s office said on Thursday.

After the initial agreement of the U.S.-Taiwan Initiative on 21st Century Trade is signed, negotiations will commence on other, more complicated trade areas including agriculture, digital trade, labor and environmental standards, state-owned enterprises, and non-market policies and practices, USTR said.

U.S. Trade Representative Katherine Tai said in a statement that the deal strengthens U.S.-Taiwan relations and demonstrates they can work together to advance trade priorities for their populations.

"We look forward to continuing these negotiations and finalizing a robust and high-standard trade agreement that tackles 21st Century economic challenges," Tai said.

Taiwan’s Office of Trade Negotiations in a statement called the agreement "historically significant" and said Taiwan aimed to finalize negotiations on all remaining issues by the end of the year.


WTO members review ways to facilitate digital trade and electronic transactions

WTO: Singapore presented its experience with the TradeTrust framework, an initiative connecting governments and businesses to a public blockchain to enable safe exchange of electronic trade documents across digital platforms. This framework relies on digitalisation to avoid difficulties in undertaking transactions and to cut costs associated with paper-based trade across borders.

The United Kingdom made a presentation on trade digitalisation, which focussed on utilising digital technologies to improve trade processes and to make trade transactions easier and faster, especially for small business. It noted that trade digitalisation can be promoted by addressing legal, technical and commercial barriers to the digitalisation of paper-based processes.

Brazil presented its experience on implementing electronic “single window” systems for cross-border transactions and the benefits such a system brings. These benefits include achieving a faster clearance time, increasing government revenue, reducing compliance costs and improving the transparency and efficiency of customs procedures.

Several members shared their practices in free trade agreements in areas such as paperless trading, e-payments, e-contracts, e-signatures, e-invoicing and electronic transaction frameworks. They highlighted, in particular, some specific obstacles that hinder digital trade facilitation.

Ambassador Usha Dwarka-Canabady of Mauritius, the facilitator of the Work Programme on Electronic Commerce and the e-commerce moratorium, welcomed members’ exchanges on their national practices, underlining the broad geographical spectrum of the presentations.