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Meta Warns It May Shut Down Facebook and Instagram

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  • Last Thursday, the social media giant warned that it would not be able to meet its annual reporting deadline.
  • The European Regulators are currently drafting new legislation to regulate how EU citizens’ data is transferred across the Atlantic.
  • The European Court of Justice ruled that the standard for data transfer between the EU and the U.S. does not adequately protect the privacy of European citizens in July 2020.

Meta stated that it will shut down Facebook and Instagram in Europe if it cannot continue transferring user data to the U.S.

Last Thursday, the social media giant Twitter issued the warning in its annual reports.

The European Regulators are currently drafting new legislation to regulate how EU citizens’ data is transferred across the Atlantic.

Facebook stated that “if a new transatlantic framework is not adopted, and we are unable to rely on SCCs or other alternative means for data transfers from Europe and the United States (or both), we will likely not be able to offer a number our most important products and services, such as Facebook and Instagram in Europe.

This could have a “material adverse effect” on the company’s operations, results of operations, and financial condition.”

Axel Voss, a European lawmaker, stated via Twitter that “Meta cannot blackmail the EU into giving up its data protection standards.” Voss had previously written some EU data protection legislation.

CNBC was informed Monday by a Meta spokesperson that it does not intend to leave Europe and added that it had raised similar concerns in past filings.

They stated that Meta and other organizations, businesses, and services rely on data transfers to the U.S. for global services.

CNBC reached out to the European Commission for comment but they did not respond immediately.

According to a report by The Wall Street Journal, Facebook received a preliminary order from Ireland’s Protection Commission in August 2020 to stop user data from being transferred from the EU to the U.S.

Nick: “The Data Protection Commission of Ireland conducted a probe into Facebook’s European data transfer. It suggested that SCCs could not in practice be used for EU data transfer.”Clegg (Facebook’s vice president for global affairs and communications), stated in a blog entry at the moment

He said that while this approach remains to be refined, it could have a profound effect on businesses that depend on SCCs as well as on many online services businesses and individuals rely upon.

The final decision of Ireland’s Data Protection Commission will be made in the first half of 2022.

Facebook would need to segregate the vast majority of European user data it collects if SCCs are not allowed to be used as a legal basis for data transfers. If Facebook fails to comply, the DPC could fine it up to 4% of its annual revenues of $2.8 billion.

Court ruling

The European Court of Justice ruled that the data transfer standards between the EU and U.S. does not adequately protect European citizens’ privacy in July 2020.

After concluding that EU citizens could not challenge American surveillance, the court, which is the highest legal authority in the EU, limited the U.S.’s ability to send European user data to the U.S.

U.S. agencies like the NSA could theoretically request internet companies such as Facebook and Google to give data on EU citizens. That EU citizen would not be the wiser.

After Max Schrems, an Austrian privacy activist filed a lawsuit against Facebook in light of Edward Snowden’s revelations. He argued that U.S. law didn’t offer enough protection against surveillance by public officials. Schrems filed a complaint against Facebook, which, like many other companies, was transferring his data and other users to the U.S.

The EU-U.S. Privacy Shield Agreement, which allowed firms to transmit EU citizens’ data across the Atlantic, was invalidated by the court ruling. Companies have been forced to rely upon SCCs.

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