The European Union has been looking into Privacy Shield and other agreements that allow for transatlantic data transfers, particularly on how data from European users is stored and processed on US-based servers.
The EU is increasing regulations into how users data is stored and processed which could affect how Meta operates in the region. Meta which is Facebook and Instagram parent company is considering shutting them down in Europe if they are not given the choice to transfer, store and process data from users in Europe on US-based servers.
The Privacy Shield framework allowed for transatlantic data transfers and Meta warns that if they’re no longer allowed to use this framework or if a new one is not adopted, they will probably stop offering its most significant products and services which includes Instagram and Facebook. This was shared in the company’s annual report to the U.S. Securities and Exchange Commission.
Data protection violations made the European Court of Justice annul this treaty in July 2020. The EU has also been probing Standard Contractual Clauses that allow for data from users in Europe to be processed on US-based servers.
“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. The impact would be felt by businesses large and small, across multiple sectors,” warned Meta’s VP of Global Affairs and Communications Nick Clegg confirming the reports.
“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 continues.
The Irish Data Protection Commission also decided that data transfer frameworks like Privacy Shield and other model agreements were not in line with the GDPR. Meta had to suspend processing European user data on US-based servers in August 2020 as investigations continued.
The verdict will be published later this year and Meta may consider not offering some of its services across the EU.
It’s going to be interesting to see if Meta follows through and it will set precedence on how it processes non-EU and Non-US user data. In December 2019, Twitter, another US-based social media company decided to move its non-EU and non-U.S user accounts from Ireland to California to allow for more flexible experimentation without running into GDPR laws.
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