What Meta Threatening to Leave Europe Means for the Continent
Meta, the new name for the company Facebook, is one of the largest companies in the world. When they announced their potential plan to pull out of the European Union nations, many were left confused and scared. Though originally Facebook was simply a social media site, Meta, the parent company of Instagram and Facebook, is introducing ideas previously unimagined, such as virtual reality and other concepts of the metaverse. The metaverse is a way to redefine the internet and make virtual experiences seem physical. The December 2021 rebranding of the company was to appeal to a wider audience and if they were to leave Europe, more than 200 million people would be left without Meta’s services.
The issue of Meta leaving Europe started with concerns surrounding data transfer laws. In an annual report, the company said that “- we will likely be unable to offer a number of our most significant products and services, including Facebook and Instagram, in Europe” … “if a new transatlantic data transfer framework is not adopted". Right now, the company is relying on the Standard Contractual Clauses to transfer data from EU member nations and to non-EU countries, but uncertainty regarding compliance with EU’s General Data Protection Regulation has made Meta hesitant of the company’s involvement in Europe.
How will Meta’s departure actually affect European countries? Some leaders seem unphased. French and German Economic Ministers, Bruno Le Maire and Robert Habeck, respectively, have both commented on the issue saying that they are not concerned about the threat. They attempted to reassure the public by saying that as long as Europe stays united, it will emerge stronger than before. While these leaders may not be worried about what this means for their countries, smaller companies who rely on Meta for advertising purposes have a valid reason to be anxious. In an Ipsos study, it was reported that 73 percent of small businesses surveyed in the EU used Facebook and Instagram to help them launch. The key issue is a valuable lesson for European businesses: diversify your markets. Becoming too dependent on one company is dangerous because if something like this happens, there are limited options on how to proceed.
The problem becomes even blurrier, as the company is restating their stance and making the claim that they never threatened to pull out of Europe in the first place. Due to this statement, it appears that Meta put out an empty threat, and the company can not afford to reject access to services to Europe. While the ambiguity of the future of the data transfer laws may be making the Fortune 500 company weary, leaving Europe would have dire consequences. To make the rebranding as seamless as possible, Meta decided to create 10,000 jobs in Europe in order to develop the platform for the new version of the internet. Instead, it seems plausible that this controversy was just a stunt to stress the importance of the data transfer laws and how seriously Meta takes them. Once Meta saw the backlash it received, they had to save face and took to explaining the importance of more open data transfer laws.
While this circumstance might be alarming, it is important to know that this is not the first time the company has threatened to limit access to some clients. In 2020, Facebook pushed to block news articles in Australia due to disputes surrounding paying publishers. This conflict sparked concerns over censorship and showed just how much power the company has. It was resolved by talks between Australian Treasurer Josh Frydenberg and Facebook founder Mark Zuckerberg.
Due to the rather composed reaction from EU officials, the supranational organization should consider how much it truly benefits from Meta and the Tech Giant should continue and expand lobbying efforts to push for the legislation they want. At this point in time EU member nations seem to be in a position free of real concern, but it is imperative that negotiations between EU representatives and Mark Zuckerberg take place to avoid Meta having no choice but to leave Europe.
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