Meta might shut down Instagram and Facebook in Europe if the company isn’t allowed to process data from its European users on its U.S.-based servers, a change that is currently under regulators’ scrutiny.
Under current agreements, Meta is allowed to process the data of its European users in the United States, but the rules involving data transfers are under review by the European Union and they could change.
Meta May Cease Instagram and Facebook Operations in Europe
The EU-US Privacy Shield was a framework that regulated transatlantic exchanges of personal data and allowed U.S. companies to more easily receive the personal data of EU entities under EU privacy law. However, the European Court of Justice declared the agreement invalid in July of 2020 but did not stop the transfer of the data while a new framework is developed.
During its annual report, Meta’s CEO Mark Zuckerberg warned that if the new framework that was being developed no longer allowed the company to use the current model agreements or a similar alternative, it would “probably” no longer be able to provide its products and services to the region, City A.M. reports.
Meta stressed that its ability to share data between countries and regions was critically important to keep its services and targeted advertising operational.
If the company could not continue to transfer data between regions, Meta says it would have to shut down Facebook and Instagram in Europe, EuroNews reports.
Meta Spokespeople Issue No Denial
City A.M. spoke with Meta’s London-based tech media and advertising communications lead John Nolan did not deny the reports.
“A lack of safe, secure, and legal international data transfers would damage the economy and hamper the growth of data-driven businesses in the EU, just as we seek a recovery from Covid-19,” Nolan says. “The impact would be felt by businesses large and small, across multiple sectors. In the worst-case scenario, this could mean that a small tech start-up in Germany would no longer be able to use a US-based cloud provider. A Spanish product development company could no longer be able to run an operation across multiple time zones.
“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.”
A second Meta contact told City A.M. that while Meta did not want to pull out of Europe, it may be forced to.
“We have absolutely no desire and no plans to withdraw from Europe, but the simple reality is that Meta, and many other businesses, organizations, and services, rely on data transfers between the EU and the U.S. in order to operate global services.
“Like other companies, we have followed European rules and rely on Standard Contractual Clauses, and appropriate data safeguards, to operate a global service.
“Fundamentally, businesses need clear, global rules to protect transatlantic data flows over the long term, and like more than 70 other companies across a wide range of industries, we are closely monitoring the potential impact on our European operations as these developments progress.”
Last week, Facebook revealed that it had lost users on its platform for the first time in its 18-year history. The platform’s active users went down by about 500,000 people to 1.93 billion at the end of 2021, The Hill reports.
Update: Meta says that it did not “threaten” to leave Europe, clarifying that it may be forced to do so if rules regarding data transfer and storage are changed.
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