Meta, the parent company of Facebook and Instagram headed by Mark Zuckerberg, has stated that it may be forced to shut down its two major social media platforms in Europe in the next months.
The shocking allegation was made in Meta’s annual filing with the Securities and Exchange Commission, which requires publicly traded firms to identify risks that could affect profits and losses.
What exactly is the problem?
While it is commonly known that social media sites such as Facebook and Instagram rely largely on user data, Europe may soon shut off this source.
It all began in 2016, when Europe tightened its data security standards by enacting the General Data Protection Regulation (GDPR).
Following the law’s implementation, firms such as Facebook relied on the EU-US Privacy Shield, a system that governed data transfer across the Atlantic, to conduct business on the continent.
However, in July 2020, the European Union’s Court of Justice declared that the EU-US Privacy Shield agreement was illegal. Nonetheless, the court permitted the corporations to apply the Standard Contractual Clauses (SCC), which allow data to be moved from the EU to another nation while being GDPR compliant.
Meta has been running the two platforms under these terms for about a year and a half, but even the SCC may be scrapped by the court soon.
Max Schrems, an Austrian privacy activist, filed a petition against the SCC. Hearing the petition, the European Union’s Court of Justice concluded that US law did not provide a “sufficient level of protection.” “For the data transfers to be legitimate, US legislation would have to be fundamentally equal to those needed under EU law,” the court said.
