Court ruling could force Facebook out of Europe

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What would happen if the world’s biggest social media company pulled out of an entire continent overnight? That’s exactly what some are now wondering in the wake of a court ruling that puts Facebook’s European future in jeopardy.

The European Court of Justice ruled in July that Facebook doesn’t do enough to protect users from surveillance by U.S. intelligence agencies when shipping data across the Atlantic. If enforced, it would require social media companies to stop sending European data to the U.S.

This is a major component of how these companies operate and would be a major problem. In response, Facebook has warned that it may be forced to leave Europe entirely if the ruling is enforced.

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Major Loss

The ramifications of this news are certainly huge. Although it’s unlikely, the thought of Facebook shutting down across an entire continent is hard to fathom.

Yet, that’s exactly what the company’s associate general counsel Yvonne Cunnane is thinking about. She says, “In the event that [Facebook] were subject to a complete suspension of the transfer of users’ data to the U.S., it is not clear… how, in those circumstances, it could continue to provide the Facebook and Instagram services in the EU.”

At the same time, the social media giant clarified the filing, saying, “Facebook is not threatening to withdraw from Europe.”

That’s good news considering the strongarm actions that some tech companies have taken recently in response to political pressures. However, it doesn’t change the fact that Facebook’s European operations could be in jeopardy.

This issue date back to 2011, when an Austrian lawyer named Max Schrems first filed privacy complaints about the company. Things have escalated since then, eventually leading to the overruling of a so-called privacy shield earlier this year that served as a workaround.

This month, the Irish data protection commissioner began the process of enforcing the ruling, which would force Facebook to stop transferring data to the U.S.

A Facebook spokesperson said, “Facebook, and many other businesses, organizations and services, rely on data transfers between the EU and the U.S. in order to operate their services.”

Far-Reaching Effects

Interestingly, this ruling could also extend beyond Facebook. The company’s head of global affairs, Nick Clegg, pointed out in a blog post earlier this month that smaller businesses could also be affected.

He writes, “In the worst-case scenario, this could mean that a small tech start-up in Germany would no longer be able to use a US-based cloud provider. A Spanish product development company could no longer be able to run an operation across multiple time zones. A French retailer may find they can no longer maintain a call center in Morocco.”

The internet has globalized the world in a way that no one could have imagined. Limiting data sharing between countries—especially tech hubs like the U.S.—stifles innovation and collaboration. Perhaps some form of security agreement would work better than an outright ban.

This situation is worth monitoring as it unfolds given its major implications for Europe, Facebook, and the rest of the world.

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