Meta is dissatisfied with the European rules for storing user data. She warned about the possible closure of a number of services in the region if these rules are not revised. Instagram Facebook, among other things, may come under attack.
This became known from the annual report for the U.S. Securities and Exchange Commission (SEC).
As Meta points out, she started having problems with European regulators a year and a half ago. In July 2020, the European Court of Justice invalidated the Privacy Shield – the transatlantic data transfer agreement under which the company operated. The stumbling block was that this agreement (as well as other similar agreements) did not comply with the GDPR law on the protection of confidential information. Roughly speaking, then officials temporarily banned processing and storing data of Europeans on servers located outside Europe.
Now regulators are working on a new agreement, but whether it will be approved and if so, in what form is still unclear.
Meta believes that transatlantic data transmission is crucial for its business. A full-fledged ban can seriously affect the quality of services, targeted advertising and, ultimately, the company’s revenue.
“We believe that a final decision on this issue can be made already in the first half of 2022. Facebook Instagramming is a major issue. If the new transatlantic data transfer system is not adopted and we cannot rely on data transfer agreements from Europe to the United States, then we probably will no longer be able to provide our most significant products and services in Europe, including Facebook and Instagram. This will significantly affect our business and finances,” the Meta documents say.
Separately, Nick Clegg, Meta’s vice president for global affairs and communications, said that many companies, not just Meta, will suffer because of the European rules.
“If the worst-case scenario develops, a small technology startup from Germany will no longer be able to use the services of a cloud provider from the United States. The Spanish development studio will not be able to operate products in several time zones at the same time, and the French retailer will find that it can no longer support a call center in Morocco,” Clegg said.
Recall that now in Europe they are also working on the so-called Digital Services Law or DSA. In particular, it may prohibit IT companies from collecting some data about users. For example, if it is adopted, it will be impossible to target ads by categories such as race, gender and religion. In addition, companies will be banned from making targeted advertising for minors.
Last week, Meta reported for 2021. She announced that she earned $117.9 billion, which is 37% more compared to 2020. However, as analyst and marketing expert Eric Seufert noted, over the past two quarters, the company’s advertising revenue has sunk — it has received about $10 billion less. The reason for this was partly Apple‘s new privacy policy.