Meta threatens to shut down Facebook and Instagram in Europe over privacy laws: Sudden stock price
Social media giants such as Meta’s Facebook feed on advertisement money showed to its users. Even though CEO Mark Zuckerberg said they do not share or sell data in court, the company is still hesitant on data grabbing. The annual report by Meta said they might pull out Facebook and Instagram, among other meta products.
In a way, the news is huge. But on the flip side, European regulators are not hesitant about it. The regulatory body says if Meta does not comply with the privacy rules of EU citizens, then they can’t conduct business. And if Facebook can’t pull user data, they can’t show advertisements or take in user information for further use. So, the EU regulators called Meta’s report a bluff, and many even went as far as saying, “life is perfect without Facebook and we would live very well without Facebook.”
Europeans are hesitant to share public information to process on US servers, as they may be prone to security issues. So, the tight grip of regulation is not suitable for the company. Along with that, as Meta Inc. is trying to push towards Metaverse, people are moving away from the platform.
A few years back, Facebook was quite an active place for virtual gatherings. Now only people in groups messenger users only use the platform. Marketing without an actual product on hand for an extended period costs the company shares to fall at least 25 per cent even though the share market says that they have to monitor this rate for at least three days.
However, according to Bloomberg, the US and the EU are stuck in negotiations over plans to “replace a transatlantic data transfer pact that thousands of companies relied on.” From the Meta side of things came “If a new transatlantic data transfer framework is not adopted and we unable to continue to rely on SCCs 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.”
What lies ahead of the data-sharing dispute among regulators and Meta is unclear. Still, one thing is pretty straightforward: the EU officials won’t mind having Facebook or Instagram.
In July 2020, the European Court of Justice broke down the privacy shield for existing data transfer arrangements between the US and EU. It came to attention that European people’s privacy was not protected in the former agreement, so the court settled otherwise.
But as a business, Meta needs business in the EU. Otherwise, the share price will gradually settle at a lower price. The meat was evaluated as the first trillion-dollar social media company, which fell badly due to stock price dropping at a crazy rate. Even though it’s a bit settled now, their jump on the Metaverse better come soon than late.
Within the first half of 2022, the Irelands Data Protection Commission is expected to issue a final decision. Both Meta and EU will wait to pass the time in-between until then. One thing is clear that is the European Union is not interested in handling citizen data on US servers.
Meta will now wait for an answer on reviewed privacy law. Though it is doubtful, minds are going to change. The company has to bypass and make an exception for the European Union or lose business in the region. As we said, the company took a hit on shares by multi-billion dollars, and the EU is a tech leader. Many countries may follow suit, which can get troublesome for the social media giant.