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Is Meta withdrawing from Europe?

Meta released its annual report for the fiscal year 2021, immediately giving rise to numerous whispers. One sentence, in particular, has resulted in a lot of head-scratching.

 

The controversial sentence reads:

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.

In between the lines

Meta used the opportunity to emphasize the importance of legally processing user data between countries. The tech giant insists this element is crucial for both its own business, as well as other businesses within Europe and US, to keep up with standard operations and ad targeting.

European laws, while created to protect user privacy by securing user data within the EU's jurisdiction, have rendered previous data-processing systems invalid. It’s been some time since the EU and the US tried unsuccessfully to create a new data-sharing agreement, however. If their efforts fail, Meta said it might have to leave the continent – taking its key platforms with it.

This is not the first time that Meta has warned, via its annual report, that the inability to use standard contractual clauses would make it "unable to operate" its business in Europe. The annual report for the year 2020 contained a similar statement, although it didn’t name any of its social platforms in particular. This time, however, tensions have intensified. This is potentially due to both of the most relevant data exchange laws, Safe Harbour Agreement and Privacy Shield, being stuck with the European Court of Justice while data breach lawsuits keep piling up.

Playing safe or playing the wild card?

What many news reporters called a "Meta threat" allegedly provoked certain EU officials, including French Finance Minister Bruno Le Maire and German Economy Minister Robert Habeck, to declare they would be fine with Facebook leaving. Le Maire commented:

I can confirm that life is very good without Facebook and that we would live very well without Facebook… digital giants must understand that the European continent will resist and affirm its sovereignty.

Bruno Le Maire

Meta, on the other hand, denied it was threatening anyone and suggested that such allegations are untrue. "Much like 70 other EU and US companies, we are identifying a business risk resulting from uncertainty around international data transfers," said Reinisch, Meta’s Vice President for Public Policy in Europe. He reiterated that Meta just wants to see "the fundamental rights of EU users protected" and the internet continuing to operate without frictions and confinement by national borders, as was originally intended.

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 E.U. and the U.S. in order to operate global services.

Meta spokesman

In the meantime, the palpable tension between the social media conglomerate and EU lawmakers over the safe transfer of user data aroused fears concerning Facebook’s outlook and, most likely, led to a 26% plunge in Meta stocks last week – one of the biggest value drops in the stock market history.

Stuck in negotiations

The European Commission spokesman reported to Bloomberg that negotiations with Washington have most certainly intensified, but that they would "take time given also the complexity of the issues discussed and the need to strike a balance between privacy and national security".

Only an arrangement that is fully compliant with the requirements set by the E.U. court can deliver the stability and legal certainty stakeholders expect on both sides of the Atlantic.

European Commission spokesman

Although the battle has escalated, it appears a solution is nowhere in sight – and it remains for all of us to wait patiently for the outcome. But, even if Meta does fulfill its "not-threat", don’t worry! You’ll probably still be able to access all your social platforms accounts from Europe with the help of a VPN.

Written by: Danka Delić

With her BA in English Language and Literature, Private Pilot Licence, and passion for researching and writing, Danka brings further diversity to the team. As a former world traveler, she learned to appreciate cyber security and the necessity for digital privacy. Danka is a nature, animal, and written-word lover. She enjoys staying on the go, both mentally and physically, and spends most of her free time either reading or hiking with her dog.

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