The Data Protection Commission (DPC) allegedly engaged in “fundamental failings” of fair procedure in deciding to order social media giant TikTok to suspend data transfers to China, the High Court has heard.
TikTok is challenging the DPC’s decision, which concluded that the social media giant breached privacy rules in transferring European users’ personal data to China. Along with “corrective orders” directing TikTok to ensure compliance with data privacy laws, the DPC also imposed a fine of €530 million on the company.
The court previously heard that TikTok user data originating in the European Economic Area is not stored in China, but is accessible to Chinese engineers. The DPC order requires that this remote access cease and that the processing of the data must brought into compliance, which addresses potential issues around storing of data.
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On Tuesday, before Mr Justice Rory Mulcahy, counsel for TikTok opened its application for a stay on the DPC’s orders pending the hearing of a full challenge to the decision. The DPC is opposing the application for a stay.
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Paul Gallagher SC, for TikTok, said it was his client’s case that the DPC breached fair procedures in arriving at its decision.
Mr Gallagher claimed there was a “fundamental failing” in fair procedures, and said it was their position that this was apparent from a consideration of the documents that relate to the DPC inquiry, its conduct and ultimate decision.
Mr Gallagher said that TikTok was particularly aggrieved that the nature of the “corrective order” handed down was made in the absence of fair procedures.
Mr Gallagher said that if TikTok had been afforded fair procedures, and if the DPC considered material submitted to it in the course of the inquiry, it “wouldn’t have been necessary to make the corrective order”.
Errors made by the DPC in the decision-making process, Mr Gallagher claimed, have “enormous consequences” for TikTok.
The order made by the DPC tells TikTok that it cannot do business as it has previously done, and that it must suffer billions of dollars of losses, Mr Gallagher said.
The DPC’s decision, and the consequences the flow from it, is a result of the DPC’s failure to engage with material TikTok put before it, he alleged.
Mr Gallagher said an example of this alleged failure to engage was the DPC’s “cursory” assessment of Project Clover – a TikTok initiative implemented in 2023 to protect European user data and store it by default in a dedicated European data enclave. Mr Gallagher described Project Clover as a “world class” suite of protective measures for user data.
Losses incurred by TikTok’s worldwide operations as a result of the DPC’s orders will run to over $3 billion (€2.6 billion), Mr Gallagher claimed. These are enormous losses, Mr Gallagher added, amounting to sums that the Irish courts have not taken into account in any case to date.
Declan McGrath SC, also appearing for TikTok, said his side was seeking the stay to ensure that TikTok does not suffer “serious and irreparable harm” that cannot be undone or compensated for in the event its challenge to the DPC’s decision is successful.
Mr McGrath said the stay is critical to ensuring that TikTok has an effective right of appeal.
The hearing continues.
