Meta Threatens Europe Exit for Facebook, Instagram on Data Rules

European regulators are currently re-working regulation on how European data is transferred across the Atlantic, after the previous Privacy Shield agreement with the U.S. was ruled invalid by the European Court of Justice in July 2020.

The logo for Facebook is displayed on a laptop computer in an arranged photograph taken in Little Falls, New Jersey, U.S., on Wednesday, Oct. 7, 2020. Facebook Inc. is tightening its rules on content concerning the U.S. presidential election next month, including instituting a temporary ban on political ads when voting ends, as it braces for a contentious night that may not end with a definitive winner.

In its annual report published Thursday, Meta said that if it couldn’t rely on new or existing agreements — such as so-called standard contractual clauses — to shift data, then it would “likely be unable to offer a number of our most significant products and services, including Facebook and Instagram, in Europe.”

While it is unlikely that Meta would withdraw its flagship products from one of its most lucrative markets, its response highlights the increasing tension between the social media company and lawmakers over the ownership of user data.

The European Commission said negotiations with Washington have intensified, but they “take time given also the complexity of the issues discussed and the need to strike a balance between privacy and national security,” a Commission spokesperson wrote in a statement to Bloomberg on Monday.

“Only an arrangement that is fully compliant with the requirements set by the EU court can deliver the stability and legal certainty stakeholders expect on both sides of the Atlantic,” the spokesperson added.

In August 2020, the Irish protection agency ruled that a company’s use of standard contractual clauses to process European data violated the GDPR and should be suspended. A final decision should come in the first half of this year.

Data protection authorities are increasingly scrutinizing these kinds of supplementary security measures that have allowed companies to send data back and forth in the absence of a new agreement, according to Patrick Van Eecke, a partner and head of cyber and data at law firm Cooley LLP.

“I am not surprised companies outside of Europe are reconsidering whether or not it makes sense to continue offering services to the European market as there are not many options left any longer,” said Van Eecke.

It is not the first time Facebook has threatened to ban its services. In 2020 it said it plans to block people and publishers in Australia from sharing news, in an attempt to push back against a proposed law forcing the company to pay media firms for their articles.