Meta: Withdrawal from Europe would cost Facebook 25% of revenue
No more Instagram, no Facebook, no more WhatsApp for European users? This dark scenario is currently being painted in media.
An annual report from parent company Meta Platforms, which said it was “likely” unable to offer its “key products and services, including Facebook and Instagram” in the EU if it stopped using the current model agreements may. These are currently intended to ensure legal certainty because when Facebook or Instagram is used, data is sent across the Atlantic to the USA for evaluation.
This is the current opinion of many data protection and legal experts, who refer to the end of “Privacy Shield” and the use of the disputed Standard Contractual Clauses (SCC). However, if data can no longer be sent to the USA under the SCC or comparable rules, then advertising-financed services such as Facebook or Instagram would not be legal in Europe – and Zuckerberg’s meta-group would have to shut them down.
19 billion dollars from Europe
But what does the European business mean for Meta/Facebook? In short: a lot. Revenue in Europe in 2021 totaled around $29 billion and grew by almost half compared to 2020 (2020: $19.1 billion). The most important market for Facebook is the USA (USA & Canada revenue 2021: $55.5 billion). About 25 percent of the total turnover (2021: $118 billion) comes from Europe. Asia-Pacific (including Australia) makes up significantly less, South America and Africa go under “Rest of World,” and China (the home of TikTok) doesn’t get Meta into it anyway.
Meta is used to heavy losses lately – the new data protection guidelines of the iPhone cost the Internet company $10 billion, and the stock market crash wiped out more than 200 billion in market value. But giving up the second most important market after the US is unlikely to be an option for Zuckerberg. Therefore, it is much more likely that there will be changes in digital ads and privacy rules. After all, Amazon and Google also manage to continue offering advertising in Europe.
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“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,” Meta Platforms told British newspaper City AM . It is pointed out that there are also other companies that rely on transatlantic data transfers, also in the other direction. In addition, the relevance of Facebook, Instagram, and WhatsApp for SMEs to be able to advertise online should not be underestimated.
