Facebook’s parent company Meta has threatened to shut down its most popular platforms in Europe over a data-processing dispute with the European Union.
Meta says it will close down Facebook and Instagram’s service in Europe if it is not able to transfer, store and process data on its US-based servers.
The threat comes despite a California-based company making $6.8billion a year in advertising revenue from European countries.
The move comes amid plans to introduce a new EU law that restricts Meta’s use of European users’ data.
If the new law comes into effect, the social media company warned it could walk away from countries in the European Union – which does not include Britain after Brexit.
In its annual report to the US Securities and Exchange Commission, the tech giant said current EU regulations are preventing data transfer which it says is essential for its operations.
European regulators are currently drafting new laws which will decide how users’ data is transferred to the US.
Current agreements allow data to be transferred but the arrangement is under heavy scrutiny, which could threaten Mark Zuckerberg’s current business model.
It is not the first time that Facebook has tangled with regulators and governments over the way it is regulated.
In 2021, the social media network banned users in Australia from sharing news articles for several days because it objected to a law designed to force them to pay publishers for content.
It reactivated news stories after negotiations with the Australian government resulted in tweaks to the law.
Meta said: “If a new transatlantic data transfer framework is not adopted and we are unable to continue to rely on SCCs (standard contractual clauses) 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.
“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 company added that any changes “would materially and adversely affect our business, financial condition, and results of operations.”
Meta’s data had been regulated via a data transfer framework known as the Privacy Shield and other model agreements.
But this treaty was annulled by the European Court of Justice in July 2020 because of violations of data protection.
Since then, the EU and the US have tried to work on a new version but it is yet to be implemented.
Meta has been relying on standard contractual clauses to transfer the data.
Meta said in its report it hopes to reach an agreement with the EU this year.
Nick Clegg, Meta’s VP of Global Affairs and Communications, said in a statement according to City AM: “A lack of safe, secure and legal international data transfers would damage the economy and hamper the growth of data-driven businesses in the EU, just as we seek a recovery from Covid-19.”
“The impact would be felt by businesses large and small, across multiple sectors.
“While policymakers are working towards a sustainable, long-term solution, we urge regulators to adopt a proportionate and pragmatic approach to minimize 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.”
In August 2020, Ireland’s Protection Commission ordered Facebook to stop transferring data to the US.
A final decision is expected in the first half of this year.
If standard contractual clauses cannot be used, Facebook would have to get rid of the majority of the data it holds on its European users.
The company could even face fines of up to $2.8billion if it fails to comply.