Meta threatens to shut down Facebook and Instagram in Europe

Meta CEO Mark Zuckerberg has threatened to shut down its social media platforms Facebook and Instagram in Europe if Meta, can't process, store and transfer data from European users on US-based servers, the tech giant reportedly warned.

The company has submitted a report to Securities and Exchange Commission, in which it has explicitly mentioned that it will be forced to suspend its products and services if a new transatlantic data transfer framework is not adopted, report India Today.

Europe's General Data Protection Regulation (GDPR) law, apparently the world's toughest privacy and security law, imposes a set of obligations onto the foreign organisations that target or collect data related to EU citizens. GDPR law would levy a heavy fine on Meta for violating its privacy and security standards if it diverts EU customer data on international US servers. Monetary penalties can shoot up to tens of millions of euros.

The issue is the latest EU law requires companies like Facebook to gather and process user data within the union, basically on European servers. However, this isn't the case with Facebook and Instagram. Both the services process user data on US and European servers, which the company says is vital for its overall business and ad targeting.

But, if the social media giant is not able to comply with the new European rules regarding data-sharing agreements, it will then be forced to cease its significant services in Europe, which includes both Instagram and Facebook.

"If a new transatlantic data transfer framework is not adopted and we are unable to continue to rely on SCCs 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, which would materially and adversely affect our business, financial condition, and results of operations," the report stated.

Following this, Meta's VP of Global Affairs, Nick Clegg, told London-based CityAM newspaper that the new EU rules would badly impact a lot of businesses in Europe, who rely on the services and ads offered by Facebook.

It seems that both Meta and Facebook are having a hard time. The company recently made headlines after it reported that Facebook's DAUs (Daily Active Users) have decreased by a big margin in Q4 2021. When the company announced the quarterly report, Facebook's shares also crashed by around 25 per cent, which reportedly wiped off around $200 billion in stock market value.

The social media giant revealed its revenue growth is also hit by several factors. One of them is the privacy changes that Apple made with iOS 14.5. Apple introduced an ATT (App Tracking Transparency) feature back in April 2021, which allowed people to prevent apps from tracking them across services.

Meta and Facebook's revenue is mostly generated through targeted or personalized ads. However, Apple's new privacy policy barred companies from tracking users' behaviour, which resulted in a major loss. Other social media platforms like YouTube, Twitter and Snap were also hit by this privacy change, which was enabled by around 80 per cent of iOS users. Meta and Facebook's revenue is also affected by the change in choices of the younger generation. People these days are more interested in making Reels on Instagram and spend less time on Facebook, which generates less revenue.