The Data Protection Commissioner "is obliged now to investigate the complaint", Judge Gerard Hogan said, following a landmark ruling by the European Court of Justice earlier this month.
Commissioner Helen Dixon said in a statement: "I welcome today's ruling from Judge Hogan which brings these proceedings to a conclusion.
"My Office will now proceed to investigate the substance of the complaint with all due diligence."
Austrian law student Max Schrems had asked the Irish data protection commissioner to investigate the protection afforded to the data transferred to the United States by the social network, Facebook, which has its European headquarters in Ireland.
In light of the ruling this month by the European Court of Justice ruling the EU-US data transfer agreement known as "Safe Harbour" invalid, the case returned to the Irish High Court.
"What is clear is that the decision of the commissioner must be quashed," Hogan said.
Speaking outside the court after the hearing, Schrems said the "big question is going to be if the Irish DPC is going to do its job."
"But I don't think the DPC is going to go down that road, so very likely we will see a long and deep investigation and long debates with Facebook.
