Meta mulls shutting down Facebook, Instagram in EU after privacy protection ruling

Meta, the parent company of Facebook and Instagram, is threatening to close down its services in EU countries because of a European Court of Justice ruling that prevents it from transferring data from European users to the company’s headquarters in the USA.

In the latest report to the US Securities and Exchange Commission (SEC), Meta, which is based in Menlo Park (California), indicated that a ruling by the Court of Justice of the European Union dated July 16 2020 could have consequences for its “ability to provide services.”

“If a new transatlantic data transfer framework is not adopted, and we are unable to continue to rely on [Standard Contractual Clauses] or rely upon other alternative means of data transfers from Europe to the USA, we will likely be unable to offer a number of our most significant products and services, including Facebook and Instagram, in Europe,” stated Meta.

The key reason for this possible disruption to Meta’s services is the difficulty that more stringent privacy protection rules would cause to the customisation of online advertising, Meta’s main source of revenue.

Meta, until October last year called Facebook, specifically cited the European Court of Justice’s July 2020 ruling, which invalidated the so-called ‘privacy shield’, an agreement between the EU and the USA enabling companies to transfer user data between continents.

The ruling was prompted by the consideration that the ‘privacy shield’ could still allow for the fundamental rights of European citizens to be impacted when their data was transferred to the USA, and did not provide a level of privacy protection consistent with Europe’s General Data Protection Regulation (GDPR).

Under the ‘privacy shield’ agreement, US companies that process personal data coming from the EU are required to be registered with the US Department of Commerce, and to comply with requirements such as informing the data owners of their rights if the companies intend to transfer the information to third parties, stating also the reasons for doing so, and to never use the data for a purpose other than the original one.

The court’s decision has forced the European Commission (EC) to initiate a review of GDPR rules, in order to adapt them to the specific case of the USA, where the majority of digital tech multinationals, including Meta, are based.

The EC is also in open negotiations with the US government to strike a new agreement replacing the ‘privacy shield’, one that would comply with the EU court ruling, according to the latest information published on the EC’s website.