European regulators are making it difficult for Meta Platforms Inc (NASDAQ: FB) to transfer user data back to the United States. Consequently, the American multinational warns, it might have to shut down Facebook and Instagram in Europe.
Data transfer is essential for Meta’s operations
According to Meta Platforms, transfer of user data is crucial for its global business operations, including ad targeting, and if the new legislation from EU regulators stands in the way of that, it’ll have to cut a number of its services in Europe.
If a new transatlantic data transfer framework is not adopted and we’re unable to continue to rely on SCCs or rely upon alternative means of data transfers from Europe to the U.S., we will likely be unable to offer a number of our most significant products and services, including Facebook and Instagram, in Europe.
Such a move will materially weigh on its business and financial stature at large, the tech titan disclosed to the U.S. SEC.
European lawmaker responds on Twitter
Responding to the news on Twitter, European lawmaker Axel Voss – a former contributor to the region’s constitution for data protection said:
Meta can’t just blackmail the European Union into giving up its data protection standards. Leaving the EU will be their loss.
The European Court of Justice had ruled in July 2020 that standards for data transfer from the EU to the U.S. did not sufficiently protect the privacy of European users.
The news comes only days after Facebook reported disappointing results for its Q4 and gave dovish guidance, resulting in a 30% hit to the stock price that wiped over $250 billion off its market cap.
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