Facebook has claimed that a draft finding by the Irish Data Protection Commissioner with respect to data transfers between the European Union and the US may cost the European economy €143bn per year if it is upheld.
The legality of data transfers has been questioned after NSA whistblower Edward Snowden's leaking of documents.
Ireland Data Protection Commissioner Helen Dixon found that EU-US data transfer channels used by Facebook are not valid due to inadequate legal protection from the US over privacy rights of the EU citizens.
The US government made an application in a High Court hearing to join the action taken by Dixon to set up the legality of Standard Contractual Clauses (SCCs) that monitor day to day activities of EU-US data transfers.
The Business Software Alliance, IBEC and Digital Europe, which represents the European digital industry, are also joining the action.
The Irish Independent reported that the action intends to have the decision on the validity of SCCs finally determined by the Court of Justice of the EU.
The SCCs were approved under European Commission decisions in 2001, 2004 and 2010.
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However, the revelations of surveillance by the NSA have raised concerns on their validity.
Facebook Ireland senior council Paul Gallagher said that the case has huge implications for Ireland, the EU and globally.
In March 2015, an attorney from the European Commission advised social media users in Europe to close their accounts if they don't want to be spied on by American security agencies.
