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Meta, the parent company of Facebook and Instagram, threatened with the possibility of closing its services in the countries of the European Union (EU) due to a court ruling that prevents it from transferring data from European users to its headquarters in the U.S.
In its latest report before the U.S Securities and Exchange Commission (SEC), the company from Menlo Park, California, explains that the decision of the Court of Justice of the European Union (CJEU) of July 16, 2020, could have consequences for its “ability to provide services.”
“If we are not allowed to transfer data between countries and regions in which we operate, or if we are restricted from sharing data between our products and services, the ability to provide our services could be affected,” the company led by Mark Zuckerberg said.
The fundamental reason for this possible “impact” on its services is the difficulty that the greater privacy restrictions pose in order to be able to personalize online ads, which is Meta’s main source of income.
The firm, which until October of last year was called Facebook, cited the invalidation by the European Justice of the so-called “protection shield,” an agreement between the EU and the U.S. that enables companies to transfer data of users between continents.
The “privacy shield” was invalidated by the CJEU in July 2020, considering that it allowed interference with the fundamental rights of European citizens whose data is transferred to the U.S., and did not grant the adequate level of guarantees that the General Data Protection Regulation (GDPR) of the European Union seeks to ensure.
Under this agreement, U.S. companies that processed personal data coming from the EU had to be registered in the system at the U.S. Department of Commerce and respect commitments such as informing the data owner of the right, if they intended to transfer them to third parties and the reasons, or never use the data for a purpose other than the original.
The court decision forces the European Commission (EC) to review the regulations, which is working to adapt the GDPR to the specific case of the United States, where a large part of the technological multinationals are based, including Meta.
The Commission is also holding open negotiations with the U.S. government to reach a new successor agreement to the “protection shield” that complies with the court ruling, according to the latest information on its website.
