Facebook Issues Grave Advisory on Potential Exodus from Europe, Deserving of Considerable Attention from Decision Makers

In a recent disclosure, Meta, the parent company of Facebook and Instagram, has highlighted potential risks and uncertainties that could impact its bottom line, particularly concerning transatlantic data flows. The issue is not unique to Meta, as it affects a multitude of companies operating across the Atlantic.

The European Union-United States Data Privacy Framework (DPF), introduced in July 2023, has served as the main mechanism for legally transferring personal data from Europe to the U.S. since its inception. The DPF replaced the invalidated Privacy Shield and was designed to address the deficiencies highlighted by the landmark Schrems II ruling, including enhanced U.S. government surveillance limitations and creating stronger redress mechanisms for EU citizens [1][4].

However, the legal status of the DPF remains uncertain. A key ongoing development is a court case (Latombe v. European Commission) with a judgment expected on September 3, 2025, where the EU General Court may annul the DPF adequacy decision, potentially invalidating the framework and forcing companies to seek alternative data transfer mechanisms such as Standard Contractual Clauses (SCCs) [3]. Even if the Court annuls the DPF, the decision can be appealed to the Court of Justice of the EU (CJEU), meaning a final resolution could take longer [3].

In light of this uncertainty, companies, including Meta, continue to implement fallback measures like well-documented SCCs combined with Transfer Impact Assessments (TIAs) to ensure compliance with EU data protection regulations in their transatlantic operations [1]. Meta is currently appealing a €1.2 billion GDPR fine related to its data transfer activities, highlighting the ongoing regulatory and litigation risks in this area [1].

As we approach the first half of 2022, a final decision in an inquiry by the Irish Data Protection Commission (IDPC) about Meta's use of SCCs is anticipated. The European Union, as a significant internal market, has shown resilience in the face of such challenges. European leaders have responded indignantly, arguing they would be fine without the social network, and numerous articles this week have debunked misinformation about Meta threatening to shut down Facebook and Instagram in Europe [2].

The ongoing uncertainty around transatlantic data transfers particularly impacts large data exporters like Meta operating in Europe. If Meta cannot transfer data between Europe and the United States, it may not be able to offer its services in the region. Digital giants must understand that the European continent will resist and affirm its sovereignty, as evidenced by statements from the German Economy Minister, Robert Habeck, who has lived without Facebook for four years and found life to be fantastic [2].

The EU must expedite its efforts to craft a successor to the EU-U.S. Privacy Shield and updated SCCs that will withstand future court challenges to ensure the continued smooth operation of the transatlantic digital economy. If policymakers do not create a successor to the EU-U.S. Privacy Shield and maintain the validity of SCCs, thousands of businesses in various industries will face similar legal challenges, harming transatlantic digital trade [2].

MEP Axel Voss has argued that Meta cannot blackmail the EU into giving up its data protection standards, and companies are now relying on SCCs, but these are also facing new scrutiny and at risk of being deemed unacceptable by regulators [2]. As the situation develops, it is clear that the EU will need to be chiefly responsible for a solution to the data transfer issue, unless it plans to turn its back not just on Meta but the entire transatlantic data economy.

Facebook Issues Grave Advisory on Potential Exodus from Europe, Deserving of Considerable Attention from Decision Makers