Meta is considering pulling out both Facebook and Instagram from Europe, should the Union remove its ability to share data gathered in the region to its US servers. The declaration was made in the company‘s recent annual report to US Securities and Exchange Commission, noting that it will shut down operations for both platforms if it fails to comply with the new European Union (EU) regulations.
For context, the Union passed a new law which requires tech companies to only store and process gathered data on local servers in the interest of data protection. In the social media giant’s case, Facebook and Instagram data are processed on both US and European servers. Meta argues that the cross-communication between its servers is crucial for ad targeting and businesses that operate on the platforms.
It added that the new laws and regulations could lead to “unfavourable outcomes” that could potentially affect the development of new products. As such, this would then lead to “negative publicity and reputational harm”, which would force the company to modify or cease its existing business practices.
“If a new transatlantic data transfer framework is not adopted and we are unable to continue to rely on SCCs or rely upon other alternative means of data transfers from Europe to the United States, we will likely be unable to offer a number of our most significant products and services, including Facebook and Instagram, in Europe, which would materially and adversely affect our business, financial condition, and results of operations,” Meta said in the report.
The company said a decision to limit its ability to transfer data to the US could be suspended from the first half of 2022. Provided that Meta actually pulls through with this drastic move when the time comes, the entirety of Europe may no longer have access to two of the world’s widely used social media platforms later this year. This in turn will undoubtedly affect a large scale of individuals, businesses and brands in the region, especially those that heavily rely on the services offered by both Facebook and Instagram.