(Reuters) – Ireland's regulator could reopen a probe that could trigger a ban on Facebook's transatlantic data transmissions, the High Court ruled on Friday and raised the prospect of a stop that the company warns would have a devastating effect on its operations  The case stems from the EU's concern that US government surveillance may not respect the privacy rights of EU citizens when their personal data is sent to the US for commercial use.
Ireland's Data Protection Commissioner, Facebook's leading regulator in the European Union, launched an investigation in August and issued a preliminary order that the main mechanism Facebook uses to transfer EU user data to the US "cannot be used in practice".
Facebook had questioned both the investigation and the preliminary draft decision. and said they threatened "devastating" and "irreversible" consequences for their business, which relied on managing user data to show targeted online ads.
The Hig Court dismissed the challenge on Friday.
"I deny all the relief requested by the FBI (Facebook Ireland) and dismiss the allegations it has made in the proceedings," Judge David Barniville said in a nearly 200-page verdict.
"The FBI has not established any basis for accusing the DPC decision or the PDD or the investigative procedures adopted by the DPC," the verdict said.
Although the decision does not trigger an immediate halt to data flows. Austrian privacy activist Max Schrems, who forced the Irish regulator to take legal action over the past eight years, said he believed the decision made it inevitable.
"After eight years, the DPC must now stop Facebook's EU-US data transfers, probably before the summer," he said.
A Facebook spokesman said the company was looking forward to defending its compliance with EU data rules, as the Irish regulator's preliminary order "could not harm Facebook, but also users and other companies. "
If the Irish Data Protection Supervisor executes the provisional order, it would effectively cease privileged asset companies in the US to have personal data from Europe and put them in the same position as companies in other countries outside the block .
The mechanism challenged by the Irish regulatory authority, the Standard Contractual Clause, was considered valid by the European Court of Justice in a decision in July.
However, the Court of Justice also ruled that privacy dogs under the SCC must suspend or prohibit transfers outside the EU if data protection in other countries cannot be ensured. The Supreme Court ruled that the Irish regulator's draft decision, if implemented, "would have devastating consequences" for Facebook's activities, affecting Facebook's 41
Irish Data Protection Commissioner Helen Dixon in February said companies could face massive disruptions to transatlantic data flows to a greater extent as a result of the European Court of Justice's ruling.
Commissioner Dixon's office welcomed the decision on Friday, but declined to comment further.