Facebook, now known as Meta, hasn’t had the best start to the month of February, especially after it experienced a staggering drop in its stock price last week.
However, the situation for the Big Tech social media giant appears to not be improving much this week, as Fox Business reported that the company might soon have to shut down Facebook and Instagram for users in the European Union over a fight for data, as the EU tightens its already strict data sharing laws.
For the longest time, Facebook was able to pull EU user data across the ocean for processing in the U.S. through a transatlantic agreement called Privacy Shield.
That agreement was ditched by the EU over the summer of 2020 and, so far, those in charge of coming up with a replacement to the agreement have failed to gain any ground.
News of a potential platform shutdown in the EU was revealed in a recent filing to the Securities and Exchange Commission (SEC) from the head of the company, Mark Zuckerberg.
“If a new transatlantic data transfer framework is not adopted and we are unable to continue to rely on [Standard Contractual Clauses] 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,” the filing read.
The filing added that such a drastic move “would materially and adversely affect our business, financial condition, and results of operations.”
While the Privacy Shield agreement was scrapped nearly two years ago, Meta has relied on what’s known as the Standard Contractual Clauses (SCCs), but with that agreement now also potentially in trouble of being eliminated, the situation has become dire.
Data, from its users all around the world, and especially in the EU, is one of Meta’s primary revenue generators that fuels its massively successful ad system. Without the data flowing back to U.S. headquarters, a sizeable chunk of revenue would come to a halt.
“Absolutely no desire”
Making clear that the company doesn’t want to resort to shutting down operations for EU users, which would have untold ramifications, a Meta spokesperson emphasized that its doing all it can to hammer out a fair deal for all parties involved.
“We have absolutely no desire and no plans to withdraw from Europe, but the simple reality is that Meta, and many other businesses, organisations and services, rely on data transfers between the EU and the US in order to operate global services,” the spokesperson told Fox News.
They added: “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.”