New EU Data Standards Threatening Meta's European Presence
Meta, the artist formerly known as Facebook, recently warned that it would shutter both Instagram and Facebook in Europe if a new data standardization process for sharing data back to its U.S. mothership could not be agreed upon. "If a new transatlantic data transfer framework is not adopted and we are unable to continue to rely on SCCs (standard contractual clauses) or rely upon other alternative means of data transfers from Europe to the United States, we will likely be unable to offer a number of our most significant products and services, including Facebook and Instagram, in Europe," Meta said.
Regulators in Europe are currently drawing up new legislation that will dictate how EU citizens' user data gets transferred across the Atlantic.
This news came after several countries in the EU, including Ireland, had raised questions about GDPR-related issues. "The Irish Data Protection Commission has commenced an inquiry into Facebook-controlled EU-U.S. data transfers, and has suggested that SCCs cannot in practice be used for EU-U.S. data transfers," Nick Clegg, Facebook's Vice President of Global Affairs and Communications, said in a blog post at the time.
"While this approach is subject to further process, if followed, it could have a far-reaching effect on businesses that rely on SCCs and on the online services many people and businesses rely on," he added.
Meta is banking on a shift that is generally inevitable to a more virtual currency and virtual world. Some say that allowing people to live in this virtual world is bad for mental health and for the population at large. This negative news along with other compounding factors is starting to present itself in the stock price of Meta, which recently lost 1/3 of its market cap. Depending on where you sit in the ecosystem, you may be rooting for or against Meta, but there is no doubt that if this posturing on behalf of Meta turns into reality, it could signal the beginning of the end of the giant.
Meta is hoping that pressure from users in the EU who value Instagram and Facebook will call their regulators asking for change that could result in a framework that everyone can live with. But with U.S. pressures from D.C. surrounding targeted ads and EU pressure, only time will tell whether Meta can survive these changes.
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Gabe Greenberg
Greenberg, a 25+ year media and marketing veteran with tenure at Microsoft, Autobytel, Delivery Agent and Vibrant, is CEO of Octillion, a platform as a service company serving local and mid-market brands and agencies and of GABBCON (aka Los Angeles TV and In…
