Meta considers shutting down its services in the EU

style="float: right; margin-bottom: 10px; font-weight: 600;"Mon 7th Feb, 2022

European data protection rules are a high priority in Germany and the European Union. For some time now, this standard has not suited the US technology company Meta. An annual report from the tech company to the U.S. Securities and Exchange Commission (SEC) now reveals that the company is considering shutting down certain services in Europe.

It states, among other things: "If we are unable to transmit, process and/or receive data between the countries and regions in which we operate, or if we are prevented from exchanging data between our products and services, it could adversely affect our ability to provide our services, which could negatively impact our financial results."

In the report, Facebook Group describes the problems that arose for it in the EU: the exchange of user data between meta-servers in the EU and the United States. Thus, the group has relied on the EU-US Privacy Shield for the transfer of data from the European Union to the United States, Meta writes.

The so-called EU-US data protection agreement regulated the use of data away from the General Data Protection Regulation (GDPR). However, in July 2020, this was declared invalid by the Court of Justice of the European Union (CJEU).

At the time, the ECJ ruled that personal data could no longer be transferred to the U.S. without verification. In concrete terms, this means that if the standard of protection for personal data in third countries does not meet EU legal requirements or can be guaranteed by other means, then the transfer of the data must be suspended or prohibited, according to the ECJ.

This was preceded by a complaint filed by Austrian data protection activist Max Schrems with the Irish data protection authority back in 2014. As a result, the ECJ ruled for the first time that the U.S. data protection standard was not equivalent to that of the European Union. The U.S. was no longer considered a so-called "safe haven" in data matters.

At the time, Schrems objected with reference to the revelations of former NSA employee Edward Snowden that the law and practice of the United States did not offer sufficient protection of data transferred to that country from surveillance activities of the authorities there, he informed the ECJ.

If a "new transatlantic framework for data transfer" does not materialize, Meta "is unlikely to be able to offer a number of our key products and services, including Facebook and Instagram, in Europe," the group now wrote in its report.Recently, the bad news around the Facebook Group accumulated. For the first time, the social media platform hardly gained any new users in the past quarter. The number of daily active members even fell. In terms of monthly activity, there was a meager increase of two million by Facebook standards.

Together with the disappointment about the revenue forecast for the current quarter, the figures drove investors into flight: Shares in Meta, the umbrella company, lost nearly 23 percent in a spectacular plunge in after-hours trading Wednesday.

Photo by Brett Jordan


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