The case is the latest example of the growing transatlantic split over how US technology companies are regulated in the EU. European regulators have accused companies such as Google of everything from abusing their market dominance to mishandling customer data. In response, President Barack Obama accused the EU of protectionism earlier this year.
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It also comes after NSA whistleblower Edward Snowden revealed widespread intrusion by US intelligence agencies, who claimed that they could readily access personal data stored by companies such as Facebook and Google. Both Facebook and Google deny that this was the case.
The European Commission is in the process of renegotiating the "safe harbour" agreement with the US. The EU's executive arm has come under pressure from the European Parliament to strengthen protections for European citizens, while also facing calls to ensure that any new agreement does not stifle cross border ecommerce.
Eduardo Ustaran, a data protection expert at law firm Hogan Lovells, said: "One thing this case is exposing is the limitations of a legal system that prohibits international data transfers."
"In other words the law has created an artificial barrier for data flows so it's difficult for the commission or regulators to put that right"
The case has attracted a wide following online enabling Mr Schrems to pay for his legal team via donations. "Usually, data protection lawyers tell us, 'I love your case, I love what you're doing, but I make money on the other side of the game, because that's the only place you can make money'," said Mr Schrems.
Both Facebook and the Irish Data Protection Commissioner declined to comment.