'No Plans To Withdraw From Europe': Meta Over Data Regulation Tiff

European data regulations prevent companies from sending data generated in Europe to servers based in the US.

Instagram, Facebook.

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Meta on Monday said that it has no plans to pull its services from Europe, after suggesting the possibility in its annual report to the Securities and Exchange Commission (SEC) citing data regulations, AFP reported.

“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 EU and the US in order to operate global services.”

Meta spokesperson in a statement

European data regulations prevent companies from sending data generated in Europe to servers based in the United States (US). Meta, which makes around 98 percent of its revenue from advertising, says this will limit its ability to target ads.

"If we are unable to transfer data between and among countries and regions in which we operate, or if we are restricted from sharing data among our products and services, it could affect our ability to provide our services, the manner in which we provide our services or our ability to target ads," the report said.

Meta is hopeful for a new transatlantic data transfer framework. But if that doesn't materialise, it will "likely be unable to offer a number of our most significant products and services, including Facebook and Instagram, in Europe."

Meta Worried About India, Other Jurisdictions

Meta, in its report, said it has been managing investigations and lawsuits in Europe, India, and other jurisdictions regarding the August 2016 and 2021 updates to WhatsApp's terms of service and privacy policy and its sharing of certain data with other Meta products and services.

The company also expressed concern about the data privacy laws that were being considered by several countries.

"Some countries, such as India, are considering or have passed legislation implementing data protection requirements or requiring local storage and processing of data or similar requirements that could increase the cost and complexity of delivering our services."

Meta

A Personal Data Protection Bill was tabled in Parliament in 2019 and referred to a Joint Parliamentary Committee (JPC). After two years, the JPC report was tabled in Parliament in December, suggesting dilutions to the bill.

What Do European Data Regulations Say?

In 2016, the European Union (EU) and the US had agreed to a transfer framework for data transferred from the EU to the US, called the Privacy Shield.

This was invalidated in July 2020 by the Court of Justice of the European Union (CJEU) which said that the Privacy Shield provided US authorities with the right to collect personal data about EU residents without adequate safeguards, and effective means of redressal.

The judgment, called Schrems II, affects every American company, including Google, Microsoft, and Amazon, whose cloud services have become a crucial part of modern internet usage.

"We urge regulators to adopt a proportionate and pragmatic approach to minimise disruption to the many thousands of businesses who, like Facebook, have been relying on these mechanisms in good faith to transfer data in a safe and secure way,” Meta's VP of Global Affairs, Nick Clegg, told CityAm.

Meta's shares plunged about 26 percent last week, erasing $250 billion or over a quarter of the company's market value. This was a direct reaction to a poor earnings report, a stagnating user base, and a weaker-than-expected outlook.

(With inputs from CityAm and AFP.)