Following an unprecedented stock market collapse, Facebook may be forced to boot more than 300 million European users from its platform.
The move would follow a court ruling requiring the company to process its data in the European Union.
The Big Tech company, which rebranded as Meta late last year, has admitted that a July 2020 ruling in the European Court of Justice could compel it to pull Facebook out of Europe.
In its 2021 annual report provided to the Securities and Exchange Commission on Wednesday, Meta warned investors of the risk to its business model.
“We will likely be unable to offer a number of our most significant products and services, including Facebook and Instagram, in Europe,” the company said.
The development is the latest in a series of blows for Meta. The Big Tech giant has faced criticism from either side of the political aisle, both for allegedly censoring conservative viewpoints and for declining to suppress even more content.
The company lost $200 billion off its market capitalization after the release of the annual report, which also revealed that Facebook had lost users for the first time ever.
CEO Mark Zuckerberg lost $29 billion off his net worth, with the value of Meta’s stock declining by more than 20 percent.
The European court decision annulled a treaty between the U.S. and the EU that permitted technology companies to send data across the Atlantic, according to the New York Post.
The court ruled that the arrangement didn’t protect the privacy of European consumers.
Facebook had 309 million daily users in Europe in the fourth quarter of 2021, according to data published by Statista.
If Meta follows through on its threat to pull the platform from Europe, it could negatively impact the company’s finances further and cost Zuckerberg even more money.
In a statement, a Meta spokesperson acknowledged that the company relies on data transfer agreements in order to operate in Europe.
“We have absolutely no desire and no plans to withdraw from Europe, but the simple reality is that Meta, and many other businesses, organizations and services, rely on data transfers between the EU and the US in order to operate global services,” the spokesperson said.
Meta is seeking to keep using Privacy Shield, the transatlantic agreement that enabled it to process European data at the company’s facilities in the U.S., Euro News reported.
Meta will have to develop the infrastructure to process users’ data in Europe without Privacy Shield. Its threats suggest it’d sooner pull its services.
