Meta: why US tech giant might shut down Facebook and Instagram in Europe - data dispute explained

Meta has warned it could shut down its products and services including Facebook and Instagram in Europe over a data-sharing dispute.

European data regulations prevent Meta, the company formerly known as Facebook, from processing data on US-based services which the company said is crucial for business and advert targeting.

On Thursday 3 February, in its report to the US Securities and Exchange Commission, the country’s financial authority, Meta warned that if no new framework is adopted it would probably have to walk away from the continent.

What is the data dispute?

Regulators in Europe are currently drawing up new legislation that will dictate how EU citizens’ user data gets transferred across the Atlantic.

Meta noted that its operations are subject to regulations on how data can be transferred or processed between different countries, as well as different products.

Any new rules limiting that transfer of data could lead to significant changes in how it operates.

One of those changes is the restrictions on Privacy Shield, a framework it has historically relied on to transfer users’ data between the European Union and the US. The framework was invalidated in July 2020.

Meta also relies on another system called Standard Contractual Clauses, or SCCs, which also regulate such transfer, but it has been similarly criticised by regulators and legal experts.

In 2020, the Irish Data Protection Commission ruled that such agreements are not in line with Europe’s General Data Protection Regulation – and therefore these transfers should be suspended.

This caused the company to suggest that if the final decision did not introduce a new framework for transferring data between the two regions, then it would be forced to shut down apps such as Facebook and Instagram in Europe.

What have Meta said?

In a statement the parent company said: "​If we are unable to transfer data between and among countries and regions in which we operate, or if we are restricted from sharing data among our products and services, it could affect our ability to provide our services, the manner in which we provide our services or our ability to target ads.”

Meta clarified it thinks it will be able to reach a new agreement this year but if it does not, it added: "We will likely be unable to offer a number of our most significant products and services, including Facebook and Instagram, in Europe".

"We have absolutely no desire and no plans to withdraw from Europe, but the simple reality is that Meta, and many other businesses, organisations and services, rely on data transfers between the EU and the US in order to operate global services," a Meta spokesperson told Euronews Next.

The company also noted that other countries have been pursuing similar restrictions on the transfer and processing of data, which could have similar effects.

It said that other data protection regulations in the US, UK, Brazil and elsewhere could force it to make significant changes to the ways it operates its products.

When could the shutdown happen?

A decision on Meta’s use of SCCs is expected as soon as the first half of this year.

This means that any shutdown could come soon after.

However, it is possible that Meta would find a way to continue offering profitable products such as Facebook and Instagram even in the face of changes to data protection regulation.

What did Nick Clegg say?

Nick Clegg, Meta’s Vice President of Global Affairs, argued in 2020 that Europe would face huge consequences without the popular social media apps, Facebook and Instagram

He said it would be detrimental to a lot of businesses in the EU.

In a statement Mr Clegg said: "Thousands of European and US businesses rely on the safe and legal transfer of data between jurisdictions.

International data transfers underpin the global economy and support many of the services that are fundamental to our daily lives.”

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