Meta is considering shutting down Facebook and Instagram in Europe if the company isn’t allowed to process data from European users in the U.S. The company made this pretty serious threat in its annual report for the Securities and Exchange Commission, where it addressed the “complex and evolving U.S. and foreign laws” that could “harm” Meta’s business.
In the report, the company emphasized the need to find a new transatlantic data framework to transfer data from European users to the U.S. after the Privacy Shield was invalidated by the Court of Justine of the European Union in July 2020. The current Standard Contractual Clauses (SCCs) that Meta currently uses for transatlantic data transfers are also under regulatory and judicial scrutiny in the EU.
“If a new transatlantic data transfer framework is not adopted and we are unable to continue to rely on SCCs or rely upon other alternative means of data transfers from Europe to the United States, we will likely be unable to offer a number of our most significant products and services, including Facebook and Instagram, in Europe, which would materially and adversely affect our business, financial condition, and results of operations,” Meta explained in the report.
It’s pretty hard to imagine Facebook and Instagram halting operations in the European Union, but the impossibility for Meta to transfer user data across regions would hurt the company’s ad targeting capabilities, and ultimately the company’s bottom line. To make things worse, Meta’s latest earnings reports also revealed that Facebook actually lost users for the first time in the company’s 18-year history.
In a statement shared with City A.M., Nick Clegg, Meta’s VP of Global Affairs and Communications reflected on the urgency of the situation. “While policymakers are working towards a sustainable, long-term solution, we urge regulators to adopt a proportionate and pragmatic approach to minimize disruption to the many thousands of businesses who, like Facebook, have been relying on these mechanisms in good faith to transfer data in a safe and secure way,” the exec said.
Tagged with Facebook, Instagram, Meta