A court document released this week seemed to suggest that Facebook might be forced to close its European operations. However, the company said that this outcome would not happen.
At the beginning of this month, Ireland’s Data Protection Commission investigated Facebook and found that the company was not doing enough to protect EU users from the U.S. government’s intelligence-gathering operations.
The outcome was initially going to be a fine, equal to about 4% of Facebook’s global revenue. Facebook responded soon after, with the company’s Head of Data Protection in Ireland, Yvonne Cunnane, writing an affidavit that stated the decision put the social media giant in a difficult position.
Facebook wants to serve the EU economy
The possibility that the company would have to leave the EU was all over the news. It was a shock to many because Facebook has about 410 million users in the EU alone, forming a significant piece of the revenue pie.
Nick Clegg, Facebook’s head of global policy, spoke at an EU policy debate on Tuesday and said Facebook would not be leaving the EU. The reasoning behind this was that; the company wants to continue serving small and mid-size businesses in the EU market.
He avoided mentioning the billions of dollars in ad revenue that Facebook gets from Europe.
A challenging future for Facebook
Nick said that it is a big issue with questions raised about the Trans-Atlantic data transfers done by the company.
If the data is completely stopped, it could have a profound effect on Facebook’s business model. He blamed over-enthusiastic reporters for the ‘Facebook is leaving the EU’ reports and added that if no solutions are found that still allow the data transfers, the company will be in a tough spot.
The provisions that allowed the data transfers were invalidated by the European Union Court of Justice, with some unclear loopholes in the mix. In time, we’ll see how this plays out.