The parent company of Facebook and Instagram, the Meta, threatens to shut down its European operations if EU regulators do not allow the company to share users' personal data with the United States.
The move is related to a ruling by the Court of Justice of the European Union (Shrems II case), which declared the sharing of data (Privacy Shield) between the EU and the US, no longer legal.
Will Meta finally withdraw Facebook and Instagram from Europe?
Why is Meta threatening to withdraw its services from Europe?
The Meta Reported that the recent changes to the Privacy Shield will radically change its business model, making it impossible to offer existing "products and services" to its European users.
Meta's main business is selling ads based on data it collects from its users. So losing this data would be extremely damaging to Meta targeted advertising.
Why is the Privacy Shield no longer legal?
In 2011, an Austrian lawyer (Maximillian Schrems) analyzed 1.222 pages of information that Facebook had about him, after requesting his data from the company. He found that Facebook was holding information that he believed he had deleted from the service as well as information that had been disclosed without his permission. Schrems has filed a complaint with the Irish Data Protection Company, where Facebook is registered for tax purposes.
In 2020 (9 years later) the EU Court of Justice found that the Privacy Shield, the law that allows US companies and authorities to collect information about EU citizens, was defective. Privacy Shield did not provide adequate protection for EU user data (in the EU, user data protection laws are much stricter than in the US) and did not provide sufficient guarantees to EU citizens on how data is used by the EU government. USA.
As the "data vehicle" or Privacy Shield is no longer legal, companies such as Meta, Google, Amazon and Microsoft will have to reconsider their European operations. Considering that cloud computing services offered by Google, Amazon and Microsoft are a huge part of the Internet as we know it today, Meta is not the only large technology company facing the data transfer problem.
Will Meta withdraw Facebook and Instagram from Europe?
Most industry experts believe that Meta's statement is just a threat. European Union regulators have been working with their US counterparts in a months-long effort to reach a new agreement. It just hasn't passed yet.
A Meta spokesman said:
"We have absolutely no desire and no plan to leave Europe, but the reality is that Meta, and many other companies, organizations and services, rely on data transfers between the EU and the US to act as global services," he said. the company's desire to assist in the completion of the new data agreement.
In short, there is no benefit to Meta leaving Europe. It would further reduce its share price, eliminate billions from its value and "cut" millions of users from its services.
There is no doubt that a new Privacy Shield law will come into force soon, but it will most likely be stricter on EU citizens' data than the previous bill.
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