Facebook’s parent company Meta has threatened to pull some of its biggest services out of Europe due to a data-sharing dispute. In an annual report that it submitted to the Securities and Exchange Commission on Thursday, Meta noted that it will “likely be unable to offer a number of our most significant products and services, including Facebook and Instagram, in Europe” if its platforms are unable to transfer data from the region back to the U.S. On Monday, however, Meta seemed to waver on this ultimatum, with a spokesperson telling Bloomberg, “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 U.S. in order to operate global services.” As Business Insider put it: “Meta appears to be heading for another stand-off with the European Union.”
At the heart of Meta’s gripes are ongoing negotiations between the European Union and the U.S. to instate a new transatlantic data transfer pact. The previous pact, known as the Privacy Shield, was invalidated by the EU Court of Justice in 2020 over concerns that it did not protect European citizens from U.S. government surveillance when it came to personal data stored on U.S. shores. In particular, the court was concerned that U.S. agencies are able to retrieve large swaths of personal data collected by U.S. companies, and that European citizens do not have an effective way to seek redress if their information is inappropriately accessed. Ireland’s Data Protection Commission also initiated an investigation into Meta’s data transfers from the EU to the U.S. a couple months later. Meta already noted that it would be “unable to operate” in Europe in its last annual report to the SEC, though it did not specify that Facebook and Instagram were on the chopping block at the time. The company has interestingly not threatened to shut down WhatsApp on the continent, where the service is extremely popular.
According to Gabriela Zanfir-Fortuna of the Future of Privacy Forum, a think tank and advocacy group that includes Meta among its corporate supporters, the absence of a new pact leaves thousands of companies in hazy legal territory, and the U.S. Congress doesn’t seem particularly motivated to address the EU’s concerns. “In this environment, companies face a lot of legal uncertainty and a lot of regulatory risk, because data protection authorities in Europe can assess on a case-by-case basis international transfers of data from the EU to the U.S.” she said. “There doesn’t seem to be an appetite for legislation in the U.S.” Meta is basically trying to get regulators to hurry up. Nick Clegg, the company’s vice president of global affairs, wrote in a 2020 blogpost, “Businesses need clear, global rules, underpinned by the strong rule of law, to protect transatlantic data flows over the long term.”
While this situation may pose some risks for Meta, the notion that it would actually shut down Facebook and Instagram in Europe is likely overblown. Indeed, European leaders are already calling its bluff. “After being hacked I’ve lived without Facebook and Twitter for four years and life has been fantastic,” Germany’s economy minister Robert Habeck told reporters during a press conference on Monday. “I can confirm that life is very good without Facebook and that we would live very well without Facebook,” said France’s finance minister Bruno Le Maire during the same conference. The European Commission also told Bloomberg that the negotiations will take time due to their complexity.
“My assessment of chances are zero that they will pull out,” said Marietje Schaake, an international policy director at the Stanford University Cyber Policy Center who formerly served as a member of the European Parliament from the Netherlands. “The European market is simply too significant for them, unlike Australia for example.” Europeans make up about 15 percent of Meta’s user base, though these fairly high-income consumers account for roughly a quarter of the company’s revenue. Meta did in fact temporarily prevent users in Australia from sharing news articles on Facebook in 2021 after the country proposed a law to force platforms to pay for content they hosted from publishers. Meta eased up once the Australian government promised that the company could instead negotiate directly with publishers. Australia accounts for about half a percent of Facebook users worldwide.
Meta has tried to throw its weight around in a number of other countries and regions as well. In July, the company reportedly joined Twitter and Google in warning that they would stop offering services in Hong Kong if local authorities put them on the hook for doxing that occurred on their platforms. The trio of companies also warned that they would leave Pakistan in 2020 over policies granting the country’s telecommunication authority to remove content that promotes “disaffection” toward the government. The government said it would review the policies after the corporate backlash.
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