Meta (formerly Facebook) threatened to remove Facebook and Instagram from EU users in its annual report on February 2nd. This comes as EU regulators work on new legislation to prevent Meta from transferring, storing, and processing Europeans’ data on servers based in the United States.
Users in the European Union are being barred from using Facebook and Instagram
According to Meta, the problem with EU legislation is that it would severely limit or restrict the company’s ability to share data with its products and services. This, in turn, may have an impact on how Meta provides its services as well as its ability to target advertisements.
Given that Facebook and Instagram rely on advertising for revenue, offering the services in the EU would be unprofitable if the legislation is passed.
Prior to this, companies based in the United States could use Privacy Shield, a data transfer framework, for transatlantic data transfers. However, the European Court of Justice invalidated the treaty in 2020 due to data protection violations. This prohibited American companies from sending data from European users to the United States. In the meantime, Standard Contractual Clauses (SCCs) have been used as a workaround.
The United States and the European Union are currently working on a treaty to address the concerns of companies such as Meta and others. Companies that fail to comply with the General Data Protection Regulation (GDPR) will continue to receive warnings, fines, and even bans. However, this is not limited to large corporations. Small businesses whose websites are accessed from the EU or by EU customers must also comply with the regulation.
Small Businesses and the General Data Protection Regulation (GDPR)
Are you GDPR compliant as a small business? If your business includes a website and/or digital commerce, you must ensure that you are in compliance.
“The GDPR not only applies to organizations located within the EU, but it will also apply to organizations located outside of the EU if they offer goods or services to, or monitor the behavior of, EU data subjects,” according to the GDPR EU site. It applies to all companies, regardless of location, that process, and stores personal data of data subjects residing in the European Union.”
The EU has tiered fines, which means that not everyone is fined the same way. Noncompliance, on the other hand, will result in a fine of up to 4% of annual global turnover, or €20 million (or $23.9 million). So, if you have EU customers, make sure you are in compliance.
Instagram and Facebook Leaving the EU
With millions of people and businesses using both platforms, cutting off Facebook and Instagram will have a significant impact on EU citizens.
The ramifications for Meta, on the other hand, will be enormous. WhatsApp, in addition to Facebook and Instagram, will most likely be blocked. And it is possible that Meta will lose 25% of its revenue as a result of this. When you consider that Meta recently lost $230 billion after its stock fell 26%, the company can ill afford to be without the revenue that the EU provides.
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