Meta, the parent company of Facebook and Instagram, has warned that Europeans may lose access to both services if the European Union (EU) and the U.S. fail to strike a digital privacy deal.

This possibility came to light in a security filing by Meta with the U.S. Securities & Exchange Commission (SEC). According to the company, pending legislation in the EU that may further restrict personal data flows between the U.S. and Europe may force it to withdraw its operations in Europe altogether.

“If a new transatlantic data transfer framework is not adopted and we are unable to continue to rely on SCCs [standard contractual clauses] 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,” Meta wrote, in part, in the filing.

Data privacy has been a stumbling block for U.S. social media companies operating in Europe since NSA whistleblower Edward Snowden portrayed a global surveillance apparatus run amok with no checks in place to protect digital privacy.

Previously, data transfers were regulated by a pact known as Privacy Shield that was designed to facilitate transfers of Europeans' data to the U.S. with the same protections required under EU law. This framework collapsed in July 2020 after the European Court of Justice struck it down, arguing that it did not provide adequate privacy protections.

Meta’s legal woes in Europe come after a plunge in its stock value last week, handing the company its latest challenge to grapple with.

In its most recent earnings call, Meta reported that its base of users on Facebook declined and that its revenue was lower than anticipated. The challenges were chalked up to the company’s shift to investing more in the metaverse and new advertising rules enacted by Apple which it said are cutting into Meta’s bottom line.

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