Yvonne Cunnane, Facebook’s associate general counsel, told the High Court that it was “not clear” how the company could “continue to provide the Facebook and Instagram services in the EU” if data transfers were suspended.

A spokesperson for the company said Facebook “is not threatening to withdraw from Europe”.

Vice-president Nick Clegg later added: “However, we are clearly not able to operate as we do and nor will many, many other companies if from one moment to the next, the existing legal provisions which govern data transfers from the European Union to the US and other jurisdictions are suddenly removed.”

If the preliminary decisions against Facebook in Ireland are upheld then a precedent will be set and tech firms will have to reconsider how they move data to the US.

Mr Clegg, speaking at an online event, said that not being able to transfer data to the US and elsewhere from Europe would be “disastrous for the economy as a whole”.

He added: “A small startup in Germany would no longer be able to use a US cloud-based server or a Spanish product development company would no longer by able to run an operation across multiple time zones.”

Further negotiations between the European Commission and the US government are expected.

Mr Clegg commented: “What is at stake here is quite a big issue that in the end can only be resolved politically between a continued negotiation between the US and the EU that clearly is not going to happen until there’s a new US administration in place after the transition period in the early part of next year.

“We need the time and the space for the political process between the EU and the US to work out so that companies can have confidence going forward that they’re able to transfer data going forward.”