The threat of Facebook-Instagram's exit from Europe and the US-EU rivalry.

Within two weeks, Meta managed to monopolize the attention of the technological -and not only- news, while recording the first ever loss of users (losing around 500 million users in 2021) and the biggest daily loss of its stock market value (over $220 billion).

Then, threatened to «exit» the EU if there is no satisfactory agreement on the transfer of data from the EU to the US. And all this shortly after the renaming of the company from Facebook to Meta and the publication of the Metaverse manifesto.

Of course, this is not surprising as we are now used to confusing the internet with the big oligopoly digital platforms. Therefore, any new development concerning these platforms seems de facto to be linked to the internet as a whole. It is, however, worthwhile, to dwell a little more on these four points, which sum up the existential crisis that Meta is experiencing. 

The company has been growing rapidly for 18 years, reaching almost 1.93 billion users. But it seems to have reached the peak of its growth: the onslaught of TikTok, Apple's privacy policy change on its devices, the «ageing» of its users, the shift of content to short videos and the inefficiency of their capitalisation in terms of advertising, but and the revelations of Frances Haugen, are some of the main reasons that led Facebook to become Meta in its «coming of age» year.

However, Metaverse's rebranding and vision does not seem to have convinced either shareholders or users. This is not only because many of the problems plaguing the platform are being transferred and inflated into the virtual world of Meta, but also because the project will be slow - if it ever does - to bear the fruits the company seeks.

In addition, a judgment of the Court of Justice of the EU, following appeals by the well-known Austrian lawyer and activist, Max Schrems, annulled the legal framework under which European users' data was transferred to the US.

For the record, the decision called «Schrems II» was issued in July 2020 and essentially demonstrated that the US cannot adequately protect the privacy of European users' data under the standards of the General Data Protection Regulation (GDPR).

In the absence of an alternative framework, companies now had to get approval from the European Commission for data transfers by entering into Standard Contractual Clauses - a kind of legal «window».

However, the Irish Data Protection Authority, despite the criticism it has rightly received for inaction, stepped on this decision and ruled in August 2020 that these clauses are not sufficient either and, in effect, froze them.

In an ironic turn of events, the ball was also in the court of the European Parliament, which was convicted for using services on its website that illegally transferred data to the US.

The whole debate has in fact become a game of geopolitical strategy.

On the one hand, we have the EU, exercising a kind of «legislative expansionism», wishing to establish its «digital sovereignty», shaping the global regulatory frameworks and operating principles of the digital world. This has been called the «Brussels effect» by Professor Anu Bradford: the EU constantly contrasts some supposedly superior European authorities against the «uncontrolled» USA or «authoritarian» China.

On the other hand, we have the United States, which in the light of the change of course towards «rationality» with President Biden, wish to reassure the Western world that America has become an open country again, away from Trump's «outbursts».

The US, of course, is not yet able to protect the privacy of its citizens from exploiting their data, as they have not adopted a federal framework along the lines of the GDPR.

Furthermore, the latest update on a new transatlantic data transfer agreement states that it will be announced next May and that European citizens will have more rights over how their data is processed and managed in the US than US citizens (!).

Therefore, taking all the above into account, we can say with certainty that Meta's threat to leave the EU is a «firework», aimed at pressuring political leaders on both sides of the Atlantic - especially the US, as the European authorities seem adamant - to design and implement a new legal framework for data transfer immediately. The company's existential crisis, moreover, would not be able to withstand the blow of a possible cessation of services in the EU.

However, this threat is indicative of the power that big digital companies have gained, from Amazon and Meta to Spotify and Netflix, which have radically transformed the capitalist means of exploiting the mode of value production.

A possible withdrawal would mean the the loss of thousands of jobs in the EU and, in particular, Ireland which is the European base of the American companies. Thus, the threat alone is enough to mobilise the competent authorities to consider such a development.

Therefore, it seems that we have reached the point where these companies have become too big, but also too intertwined with the governmentality of the internet to «separate» them, so that any solutions require structural changes in the way the internet is organized and operated, which would of course mean changing the neoliberal doctrine of uncontrolled and unconditional and unregulated expansion.

Analysis by Harry Papayevangelos, PhD Candidate in Platform Regulation at the University of Toulouse 3 - Paul Sabatier, for the Institute for Policy Alternatives ENA