European Union and American officials are negotiating a new data-sharing pact that would provide legal protections for Meta to continue moving information about users between the United States and Europe. A preliminary deal was announced last year.

Yet the E.U. decision shows how government policies are upending the borderless way that data has traditionally moved. As a result of data-protection rules, national security laws and other regulations, companies are increasingly being pushed to store data within the country where it is collected, rather than allowing it to move freely to data centers around the world.

The case against Meta stems from U.S. policies that give intelligence agencies the ability to intercept communications from abroad, including digital correspondence. In 2020, an Austrian privacy activist, Max Schrems, won a lawsuit to invalidate a U.S.-E.U. pact, known as Privacy Shield, that had allowed Facebook and other companies to move data between the two regions. The European Court of Justice said the risk of U.S. snooping violated the fundamental rights of European users.

“Unless U.S. surveillance laws get fixed, Meta will have to fundamentally restructure its systems,” Mr. Schrems said in a statement on Monday. The solution, he said, was likely a ”federated social network” in which most personal data would stay in the E.U. except for “necessary” transfers like when a European sends a direct message to somebody in the United States.

On Monday, Meta said it was being unfairly singled out for data-sharing practices used by thousands of companies.