Meta Renews Warning to EU It Will Be Forced to Pull Facebook

Meta Platforms Inc. has threatened to withdraw Facebook and Instagram from Europe if it is unable to continue transmitting user data back to the United States, amid talks between authorities to replace a canceled privacy accord.

For months, European Union regulators have been locked in negotiations with the United States to replace a transatlantic data transfer pact on which thousands of companies relied, but which was struck down by the EU Court of Justice in 2020 over concerns that citizens’ data would be compromised once it was shipped to the United States.

In its annual report, Meta stated that if it couldn’t rely on new or current agreements to shift data, such as so-called standard contractual clauses, it would “likely be unable to offer a number of our most major products and services, including Facebook and Instagram, in Europe.”

In its previous annual report, Meta cautioned that if it is not allowed to employ conventional contractual clauses, it will be “unable to operate” elements of its company in Europe, without mentioning its two core social media platforms.

“We have absolutely no desire and no plans to withdraw from Europe,” a Meta spokesman said in an emailed statement. “But the plain reality is that Meta, and many other businesses, organizations, and services, rely on data transfers between the EU and the US in order to operate worldwide services.”

The recent comments show the growing schism between the social media corporation and lawmakers over user data control. Fears about Facebook’s prognosis caused a 26% drop in the shares on Thursday, resulting in the largest value wipeout in stock market history. On Monday, Meta shares slid as much as 4.5 percent in New York trading.

“Digital behemoths must understand that the European continent will resist and affirm its sovereignty,” said French Finance Minister Bruno Le Maire on Monday in Paris.

The European Commission said data transfer talks with Washington have heated up, but they “require time given especially the complexity of the topics discussed and the necessity to strike a balance between privacy and national security,” a commission official told Bloomberg on Monday.

“Only an arrangement that is completely compatible with the EU court’s standards can give the stability and legal certainty stakeholders expect on both sides of the Atlantic,” the statement continued.

According to Patrick Van Eecke, a partner and head of cyber and data at law firm Cooley LLP, data protection authorities are increasingly scrutinizing these types of extra security measures that have permitted corporations to move data back and forth in the absence of a new agreement.

“I am not surprised that enterprises outside of Europe are evaluating whether or not it makes sense to continue supplying services to the European market because there aren’t many options left,” Van Eecke added.

This is not the first time Facebook has threatened to discontinue its services.