Facebook’s unprecedented appeal aimed at halting a referral to the European Court of Justice (CJEU) concerning the validity of EU-US data transfer channels has opened before the Supreme Court.

Data Protection Commissioner (DPC) Helen Dixon is in court for the appeal being heard by a five-judge court presided over by the Chief Justice, Mr Justice Frank Clarke.

The case is of "immense" importance , not just for Facebook and other entities sending data to the US, but for the GDP of the EU as virtually every trade transaction between the EU and US has some digital element involving data transfer, Paul Gallagher SC, for Facebook, said in opening the appeal on Monday.

Privacy

The referral was made by the High Court on a basis tantamount to finding that US law breaches the essence of data privacy rights of EU citizens, he said.

The High Court had agreed the DPC had “well founded” concerns whether US law provided adequate protections for EU citizens’ data privacy rights which effectively amounted to a finding regarding foreign law that was wrong in law, he argued.

The High Court particularly failed to have regard to the Privacy Shield decision under which the European Commission had approved the use of certain EU-US data transfer channels, he said.

It is a matter of vital importance that the High Court findings should be correct because the CJEU makes decisions on foot of findings of fact by the court of the member state which makes a reference, he said.

The CJEU should not be asked to make decisions of such enormous consequence on foot of these findings, counsel urged.

While agreeing with Mr Justice Peter Charleton that the CJEU may not make its decision on foot of the High Court views concerning US law, he said Facebook remains very concerned the CJEU might do so.

The appeal concerns an October 2017 High Court judgment by Ms Justice Caroline Costello and her subsequent referral in May 2018 of issues arising from that for determination by the CJEU.

The US government is involved in the appeal as an amicus curiae, assistant to the court on legal issues. It has maintained that US law provides adequate safeguards for EU citizens’ data privacy rights.

Ms Justice Costello's judgment was given on proceedings brought by the DPC arising from complaints by Austrian lawyer Max Schrems that the transfer of his personal data by Facebook to the US breached his data privacy rights as an EU citizen.

The DPC case was taken against Facebook and Mr Schrems but no formal orders were sought against them and the core issue concerned the validity of data transfer channels used by Facebook.

Judgment

Arising from her judgment on the proceedings, Ms Justice Costello directed a referral to the CJEU of 11 issues concerning the validity of European Commission decisions approving data transfer channels known as Standard Contractual Clauses.

The questions raise significant issues of EU law with huge implications, including whether the High Court was correct in finding there is “mass indiscriminate processing” of data by US government agencies under the PRISM and Upstream programmes authorised there.

The issues in Facebook’s appeal, expected to last up to three days, include whether there is any entitlement in the first place to appeal a reference to the CJEU.

Facebook maintains it can appeal a reference.

It also contends the High Court made incorrect findings of fact including in relation to US law and that the Supreme Court should find the Privacy Shield agreement between the EU and US means there is no requirement for a reference.

The appeal is continuing.