Meta threatens EU to pull Facebook, Instagram on failure to scrap privacy pact

Meta Platforms Inc has threatened the European Union that it will be forced to pull Facebook and Instagram if the bloc fails to scrap the privacy pact.

''The simple reality is that Meta, and many other businesses, organisations and services, rely on data transfers between the EU and the US in order to operate global services,'' the firm said in a statement.

Europe's top court in 2020 scrapped a transatlantic data transfer deal known as the Privacy Shield and relied on by thousands of companies for services ranging from cloud infrastructure to payroll and finance because of similar concerns.

The United States and the EU have been trying to come up with a new pact in the two years since then. USCommerce Secretary Gina Raimondo said she was confident there would be a new accord which takes into account the EU court's concerns.

"If a new transatlantic data transfer framework is not adopted... we will likely be unable to offer a number of our most significant products and services, including Facebook and Instagram, in Europe," Meta wrote in its Securities and Exchange Commission filing.

The social media giant recently saw its worst-ever plunge in market value, after disappointing quarterly results that raised questions about its future.

The huge drop, erasing over $200 billion from Meta's market capitalization and around $29 billion from Chief Executive Officer Mark Zuckerberg's net worth, spilled over to the broader technology sector and dragged the Nasdaq Composite Index lower.

Fewer people checked their Facebook every day per quarter than they did the year before for the first time ever during the last three months of 2021, as per Meta.

Meta Chief Financial Officer Dave Wehner told financial analysts part of the usage decrease for the main Facebook app and website came from fewer COVID-19 lockdowns, which have tended to generate a boom in online activity.

He also blamed rising internet costs for consumers in India and increasing interest in ByteDance Inc's video-sharing app TikTok.

(With inputs from agencies)