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Facebook's Data Transfer Practice to be Examined by ECJ

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Per media reports, Irish High Court has now approached, European Court of Justice (ECJ), to decide if Facebook Inc can continue thepractice of transferring data of its European users to the United States. Notably, Facebook’s European headquarters are located at Dublin.

The Irish Court Judge Caroline Costello was quoted by media reports stating that “European Union law guarantees a high level of protection to EU citizens. They are entitled to an equivalent high level of protection when their data is transferred outside of the European Economic Area.”

Costello also underscored the Irish Data Protection Commissioner’s concerns which stemsfrom absence of a “remedy” in the U.S law which is attuned with the EU charter of Fundamental Rights that protects EU citizens against the unlawful access of their data by U.S state agencies.

Facebook, Inc. Price

Facebook, Inc. Price | Facebook, Inc. Quote

Analysts observe that European regulators have been scrutinizing the data transfer practice by American companiesstringently following WikiLeaks’ Edward Snowden’s explosive revelations of mass U.S surveillance.

Following that, Max Schrems, an Austrian lawyer filed a complaint with Dublin over “illegal” access of his Facebook account data by U.S. Security agencies, serving as another big trigger to step up privacy laws, adds media reports. Schrems persistent efforts at safeguarding the privacy rights of European citizens led to the ban of Safe Harbor agreement two years back which then stated that U.S privacy laws were “adequate” to protect the right of the European citizens.

Per Reuters, this time around Schrems expects the top court to work in favor of European citizens and also work on making laws sterner, at par with what the Facebook’s U.S. users enjoy.

Meanwhile, reportedly, Facebook spokesperson has said thatEurope’s top court must take in to consideration the “extensive evidence demonstrating the robust protections in place under standard contractual clauses and US law, before it makes any decision that may endanger the transfer of data across the Atlantic and around the globe.”

The ruling by ECJ can have a tremendous impact on many companies whichtransfer data from Eurpe to U.S on a daily basis.

Zacks Rank and Share Price Movement

Facebook carries a Zacks Rank #2 (Buy). Notably, the company has outperformed the industry in the past year. Shares of Facebook have surged 32.3% compared with the industry’s 17.9% increase.

Other Stocks to Consider

Top-ranked stocks in the broader technology sector include NVIDIA Corporation (NVDA - Free Report) Applied Materials (AMAT - Free Report) , and Jabil Inc (JBL - Free Report) . All sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for NVIDIA, Applied Materials and Jabil is currently projected to be 10.3%, 17.1% and 12% respectively.

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