But it said it would not be able to force the country's data protection commissioner, Facebook's regulator in Europe, to investigate the allegations.
Austrian student group europe-v-facebook, had demanded an investigation into allegations that companies including Apple and Facebook help the U.S. National Security Agency (NSA) harvest email and other private data from European citizens.
Fugitive U.S. intelligence contractor Edward Snowden last year revealed that the NSA used Web companies including Apple, Google, Facebook and Microsoft to gather user data as part of a mass electronic surveillance programme known as Prism.
The Irish data watchdog - the effective supervisor of the EU activities of some of the biggest U.S. Internet companies, which have their European headquarters in Ireland - had said in July there were no grounds for such an investigation.
High Court Justice Gerard Hogan, who has jurisdiction because Facebook's European headquarters are based in Dublin, said he could not force a probe, but said the application raised questions about whether EU data rules were compatible with the EU Charter of Fundamental Rights.
"It is clear that the present application for judicial review must fail... because the European commission has already decided that the U.S. provides an adequate level of data protection," he said.
But he asked the European Court of Justice to clarify whether the main European rulings on data protection cooperation with the United States - the 1995 EU data protection directive and the 2000 European Commission decision on the Safe Harbour principles - were compatible with the EU Charter of Fundamental Rights.
"The critical issue which arises is whether the proper interpretation of the 1995 directive and the 2000 Commission decision should be re-evaluated in the light of the subsequent entry into force of article 8 of the EU charter," Hogan said.
© Thomson Reuters 2014