Facebook and Instagram may no longer be available in Europe. Here's why

The past weeks have been one of the toughest for tech and social media giant company Meta (formerly Facebook).

Meta has threatened to shut down its Facebook and Instagram services in Europe if not given access to process Europeans' data on US servers. There have been sparks of reactions from everywhere. The company, however, noted in its annual report that the main issue for its decision is transatlantic data transfers, regulated by the "Privacy Shield" and other models the company uses to gather and store data of European users on American-based servers. Meta's concerns arise from ongoing agreements in the EU to impose heavy scrutiny on data transfers.

The company said it previously used the transatlantic data transfer framework called Privacy Shield as the legal basis for executing all data sharing and transfers. The company also uses model agreements, or Standard Contractual Clauses, in addition to the Privacy Shield. In July 2020, the European Court of Justice annulled the treaty due to data protection violations. The US and EU said that a new or updated version of the treaty was being developed.

In its annual report to the US Securities and Exchange Commission, Meta reportedly threatened that failure to adopt a new framework and a prohibition on the company from using the current model agreements or alternatives may cause it to cut many off its “most significant and services,” which would include Facebook and Instagram in the European region.  

In August 2020. The Irish Data Protection Commission also concluded that Meta’s use of the model agreements didn’t comply with the GDPR, hence, the IDPC suspended processing European data on American servers. Despite the decision, there was no change in effect since the suspension was merely a preliminary conclusion.

Meta’s London-based leader and VP of Global Affairs and Communications, Nick Clegg, in a phone call with City. A.M warned that "a lack of safe, secure and legal international data transfers would damage the economy and hamper the growth of data-driven businesses in the EU, just as we seek a recovery from Covid-19." He added that "the impact would be felt by businesses large and small, across multiple sectors."

Due to the nature of Meta’s business, data sharing between countries and regions is necessary for its services and targeted advertising. Clegg emphasized the importance for businesses to have "clear, global rules, underpinned by the strong rule of law, to protect transatlantic data flows over the long term." He said failure to do so would affect many businesses, both large and small.

“In the worst-case scenario, this could mean that a small tech start-up in Germany would no longer be able to use a US-based cloud provider. A Spanish product development company could no longer be able to run an operation across multiple time zones," he said. "A French retailer may find that they can no longer maintain a call center in Morocco."

He urged regulators to adopt a “proportionate and pragmatic approach” to avoid disrupting thousands of businesses that rely on these cloud services. Instead of imposing heavy scrutiny on data transfers, finding a better alternative to transfer and secure data safely is more reasonable.