Facebook may shut down in EU without new data-transfer agreement
Meta may have to shut down Instagram and Facebook in Europe if the European Union and the U.S. can't reach a new agreement on rules for data-sharing, the company disclosed in a Securities and Exchange filing last week.
Driving the news: Europe and the U.S. are working on a new data-sharing agreement to allow for the legal transfer of personal information across the Atlantic. It isn't done yet. The previous agreement, Privacy Shield, was struck down in 2020.
- In the meantime, tech companies like Meta rely on individual contracts to ensure they're following the law as they send data back and forth, and those contracts can be deemed illegal by European data protection authorities.
Why it matters: The company's warning about closing down the two apps shows the real threat to businesses that exists without a new agreement in place.
Reality check: Meta made the statement as part of a financial filing that lists risks to its business in the future, and the company says it has no immediate plans, per a statement issued to CNBC.