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In paper submitted to the U.S. Securities and Exchange Commission, Meta said Facebook and Instagram will cease to operate in Europe unless new transatlantic transfer rules for user data are created.
The company told the Washington Times on Monday that it does not want to leave Europe, but the paperwork it submitted to the SEC last week is aimed at accepting the consequences of laws and regulations governing user data transfers to the United States.
Meta’s paperwork makes it clear that if pushed, it will exit Europe.
“If a new transatlantic data transmission framework is not adopted and we cannot continue to rely on it, [Standard Contractual Clauses] or if we rely on other alternative means of transferring data from Europe to the United States, we may not be able to offer some of our most important products and services in Europe, including Facebook and Instagram, which will materially and adversely affect our business, financial condition and results of operations”, Meta’ Read the 10-K submitted by the SEC to the SEC.
The data transfer framework in which Facebook operates has changed in recent years. A ruling by the European Union’s supreme court in July 2020 invalidated a data transfer agreement with the US amid Europe’s concerns that private data is not safe in the US and put the pressure on Facebook.
Meta told the SEC that the Irish Data Protection Commission said in an August 2020 draft resolution that the transfer of people’s data from Europe to the US should be suspended because Meta’s adherence to standard contractual clauses does not comply with European regulations.
A final European decision on the standard contractual clauses Meta uses to transfer data could come “as early as the first half of 2022”, according to Meta’s papers.
Meta said on Monday it has no exit strategy.
“We have absolutely no desire or plans to withdraw from Europe, but the simple truth is that Meta and many other businesses, organizations and services rely on data transfers between the EU and the US to operate global services.” Meta spokesperson said in a statement.
The pressure from European regulators comes as federal policymakers in the US are also following proposals to place new restrictions on Meta’s social networking giants, Facebook and Instagram.
Lawmakers are discussing several plans that will change the business of Facebook and Instagram, including new antitrust policy, changes in legal liability protections related to online speech, and guidelines for social media platforms that offer their services to children.
Facebook was rebranded as Meta in October 2021 and announced the transition to metaverse products focused on augmented and virtual reality experiences over social networking businesses.
The shift coincided with an unprecedented drop in users worldwide, as Meta reported last week that the number of people using Facebook daily in the last three months of 2021 had dwindled by nearly 500,000 worldwide.
According to Bloomberg, the Facebook exit rounded out Meta’s stock, which fell 26% last Thursday alone and wiped out more than $250 billion in market capitalization.
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