According to parent company Meta, Facebook and Instagram may be shut down across Europe. The problem stems from European data restrictions that ban Meta, formerly known as Facebook, from transporting, storing, and processing Europeans’ data on servers in the United States.
Meta warned last Thursday in its annual report to the US Securities and Exchange Commission, the country’s financial regulator, that if no new framework is adopted and the firm can no longer use the current model of agreements, it will be forced to leave the continent. Processing user data across borders is critical for business and ad targeting, according to Meta.
“It could affect our ability to provide our services, the manner in which we provide our services, or our ability to target ads if we are unable to transfer data between and among countries and regions in which we operate, or if we are restricted from sharing data among our products and services,” the statement read. Meta added that it expects to negotiate a new agreement this year, but that if it does not, “we will likely be unable to offer a number of our most important products and services in Europe, including Facebook and Instagram.”
Meta, on the other hand, stated on Monday that it had no plans to remove Facebook and Instagram from Europe. “We have no desire and no plans to leave Europe,” a Meta representative said in a statement. “However, the plain reality is that Meta, like many other businesses, organizations, and services, relies on data transfers between the EU and the US to operate global services.”
Meta, like other companies, stated it operated a global service by following European standards and relying on Standard Contractual Clauses and proper data security. ”Fundamentally, businesses need clear, global rules to protect transatlantic data flows over the long term,” the spokesperson added. “We, along with more than 70 other companies across a wide range of industries, are closely monitoring the potential impact on our European operations as these developments progress.”
What is the data dispute about?
Previously, Meta could have used the Privacy Shield data transfer framework as the legal basis for transatlantic data transfers. But The European Court of Justice declared the pact null and void in July 2020, citing data protection concerns. The criterion, according to the EU’s highest legal authority, does not effectively protect European residents’ privacy. As a result, US corporations have been limited in their ability to transport European customer data to the US, forcing them to rely on SCCs (standard contractual clauses). The EU and the US have stated that they are working on a new or amended pact.
How has the European Commission reacted?
A European Commission official told Euronews Next via email that “securing a new framework for safe transatlantic data flows is a priority for us and our US partners.” The talks have heated up in recent months, with technical and political discussions taking place. They went on to say that this involves regular meetings between Commissioner Reynders and his counterpart, US Secretary of Commerce Gina Raimondo.
“On both sides of the Atlantic, only an agreement that is completely consistent with the EU court’s standards can provide the stability and legal certainty that stakeholders expect.” “These conversations take time, given the intricacy of the issues at hand and the necessity to find a balance between privacy and national security,” says the author.
Meanwhile, Meta announced on Monday that billionaire venture capitalist Peter Thiel will resign from the company’s board of directors. According to the Wall Street Journal and the New York Times, he will focus on assisting Republican candidates in the midterm elections who support ex-president Donald Trump’s agenda.
On Monday, Meta’s stock dropped by another 5%. Meta’s stock dropped by 25% in response to its financial report last week, as the social media company lost daily active users for the first time in its history.