Meta warns it may leave Europe over data-sharing dispute
Meta Platforms Inc. posts revenue of $117.929 billion for 2021, up 37 percent compared with 2020. /CFP

Meta Platforms Inc. posts revenue of $117.929 billion for 2021, up 37 percent compared with 2020. /CFP

Meta Platforms Inc. once again warned to shut down Facebook and Instagram in Europe if it cannot keep transferring data back to the U.S., while European officials gave cold responses on Monday.

"After being hacked I've lived without Facebook and Twitter for four years and life has been fantastic," German Economy Minister Robert Habeck said at an event alongside French Finance Minister Bruno Le Maire in Paris on Monday, Bloomberg reported on Tuesday.

"I can confirm that life is very good without Facebook and that we would live very well without Facebook," Le Maire also told reporters at the event, "Digital giants must understand that the European continent will resist and affirm its sovereignty." 

The social media giant issued the warning in its annual report last Thursday but in an interview with CNBC on Monday, a Meta spokesperson said that the company has no desire and no plans to withdraw from Europe, adding it has raised the same concerns in previous filings.

"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," the spokesperson said.

Foregoing Europe, such a major source of revenue, will be painful, if not impossible, for Meta, especially in light of Facebook disappointing earnings for the fourth quarter that resulted in a steep decline in stock price last Wednesday, Andy Mok, senior research fellow at the Center for China and Globalization, told CGTN on Monday. 

In 2021, Europe represents about 24.6 percent of Facebook's revenue, according to its earnings report.

When governments around the world recently piled on new tech regulations, global companies must find a way to adapt to these emerging structural changes, he said.

Intensified negotiation

The European Commission has been in hard negotiation with the U.S. on the data transfer issue. Europe is drawing up new legislation on how EU citizens' data gets transferred across the Atlantic.

Meta previously used the transatlantic data transfer framework called the "Privacy Shield", which enables U.S. companies to receive personal data from EU entities under EU privacy laws.

However, the Court of Justice of the European Union, the EU's highest legal authority, ruled in July 2020 that the data transfer standard between the EU and the U.S. does not adequately protect European citizens' privacy and invalidated the EU-U.S. Privacy Shield agreement.

Therefore, U.S. companies have had to rely on standard contractual clauses (SCCs), which are designed for the transfer of personal data to third countries.

In August 2020, Ireland's Data Protection Commission, the Irish supervisory authority for the General Data Protection Regulation, sent a preliminary order to stop Facebook's data transferring from the EU to the U.S. and suggested that SCCs cannot in practice be used for EU-U.S. data transfer, according to media reports.

Ireland's Data Protection Commission is expected to issue a final decision in the first half of 2022, CNBC reported.

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