Meta, the parent company of Facebook, is warning that many of its services in the European Union could soon be shut down.
In its annual report recently filed with the Securities and Exchange Commission, the company said if the trajectory of EU policies on trans-Atlantic data transfers does not change, it might not be able to offer the Facebook and Instagram platforms in Europe.
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“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,” a spokesperson for the company told the Washington Examiner. “Fundamentally, businesses need clear, global rules to protect trans-Atlantic 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.”
The company said it has faced significant regulatory and oversight problems in the EU that threaten its ability to store, transfer, and process data between the United States and the EU. The company said it is dependent on those data transfers to keep its services in the EU operational. Without a new framework, EU requirements would likely force the company to manage all of its data on European servers — something the company is unprepared to do.
The company said the Privacy Shield framework for data transferred between the U.S. and the EU was invalidated in July 2020 by the Court of Justice of the European Union. The court concluded the Privacy Shield did not give EU civilians enough privacy protection — particularly from possible U.S. government surveillance, the New York Times reported.
A month after the ruling, the Irish Data Protection Commission recommended data transfers between the U.S. and EU should be suspended. The company said it expects a final decision could be made during the first half of 2022.
“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 said in its SEC report.
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The U.S. and the EU have been attempting to negotiate a new data transfer arrangement since the Privacy Shield collapsed, the New York Times reported. So far, none have been announced.
Last week, Facebook suffered the largest single-day loss of any U.S. company in history, losing $220 billion in market capitalization. The loss came after the company’s annual report showed it lost daily users for the first time in its history.
