Shut Down Threats Loom for Facebook and Instagram in Europe

After years of ongoing court battles, the Irish Data Protection Commission (DPC) sent a draft decision to its European counterparts opening a process of consultation that it will block Facebook-owner Meta from sending people’s data to the U.S. from Europe. This crackdown by DPC means Europeans may see Meta’s services like Facebook and Instagram shut down. A data cut-off between the regions risks losing millions of potential customers, ultimately resulting in revenue loss for U.S. businesses. However, the likelihood of this happening is still slim. A final decision about the transfer of data is not expected before the end of the year. “This draft decision, which is subject to review by European Data Protection Authorities, relates to a conflict of EU and U.S. law which is in the process of being resolved,” a Meta spokesperson told Adweek. “We welcome the EU-U.S. agreement for a new legal framework that will allow the continued transfer of data across borders.” How Trusted Media Brands Is Getting Advertisers to Ditch Third-party Cookies The DPC's draft will not lead to a stop of data transfer, but it does give EU regulators a month for their input, according to a statement by Max Schrems, the privacy advocate who filed the original Facebook data transfer complaint back in 2013. Top line In 2020, the European Court of Justice nullified the Privacy Shield that allowed EU-U.S. data transfer, spurred by concerns of the U.S. government’s access to data. As a result, Meta and other businesses in the U.S. complied with Standard Contractual Clauses (SCCs) to continue the trans-Atlantic data transfer. Although at a political level, the EU and U.S. reached a political agreement for a transatlantic data privacy framework earlier this year, this week’s decision by Irish regulators means Meta is forced to stop relying on SCCs too. The current blocking order, if agreed upon by EU regulators, could have a domino effect on other businesses who have been struggling to continue data transfer since the court ruling in 2020. Between the lines With this draft decision by DPC, there will likely be delays before any decision is made over a series of objections by EU regulators concerning issues that are not dealt with in the draft. The regulators did not share the details of the draft. “This will lead to another draft and then a vote," said Schrems. "In other cases, this took another year overall, as the DPC did not implement comments from other DPAs voluntarily and took more than half a year to forward the case for a vote.” Schrems also pointed out that the draft decision by the DPC is not a decision on his original complaint. The DPC opened its own volition inquiry—the current draft decision—alongside his complaint. This means that Schrems’ complaint that underscores the European's privacy rights against tech giants is unresolved. Bottom line In the meantime, Meta is expected to highlight how this draft is a dangerous precedent, bad for users and will continue to threaten to cut its services in Europe, according to Stephanie Liu, privacy and marketing analyst at Forrester. “In some ways, they aren't wrong—the internet wasn't designed with borders in mind, so the technical hurdles of trying to build an EU-specific instance of Meta's platforms, while still monetizing users, would be significant,” she told Adweek. However, Schrem questions the extent of the draft, limiting it to only a ban on data transfer or whether any fines for the “illegal data transfers of the past years,” would be included. "Facebook will use the Irish legal system to delay any actual ban of data transfers. Ireland will have to send the police to physically cut the cords before these transfers actually stop,” he said. "You could get the impression that the DPC just wants to have this case go in circles again and again."