Meta says it may shut down Facebook and Instagram in Europe over data transfer dispute

Facebook and Instagram may be shut down across Europe, parent company Meta has said.

The issue comes down to European data regulations that prevent Meta, the company formerly known as Facebook, from transferring, storing and processing Europeans’ data on US-based servers.

In its annual report to the US Securities and Exchange Commission, the country’s financial authority, Meta warned last Thursday that if no new framework is adopted and the company could no longer use the current model of agreements it would probably have to walk away from the continent.

Meta stated that processing user data between countries is crucial for business and advert targeting.

"​If we are unable to transfer data between and among countries and regions in which we operate, or if we are restricted from sharing data among our products and services, it could affect our ability to provide our services, the manner in which we provide our services or our ability to target ads," the statement read.

Meta clarified that it thinks it will be able to reach a new agreement this year but if it does not, it stated: "We will likely be unable to offer a number of our most significant products and services, including Facebook and Instagram, in Europe".

Meta could previously use a data transfer framework called Privacy Shield as the legal basis to carry out transatlantic data transfers.

But In July 2020, the European Court of Justice annulled the treaty due to violations of data protection. The bloc's highest legal authority argued the standard does not adequately protect European citizens’ privacy.

As a result, US companies were restricted in sending European user data to the US and have had to rely on SCCs (standard contractual clauses).

The EU and US have said they are working on a new or updated version of the treaty.