Stock prices plunged more than 5% after Meta Platforms (formerly Facebook) reportedly warned that it could suspend Facebook and Instagram services in Europe if information sharing negotiations with European authorities fail.
On the 7th (local time), Meta plunged 5.14% from the previous trading day to $224.91.
This is attributed to Meta’s warning that if negotiations on information sharing with European regulators fail, Facebook and Instagram may be suspended in Europe.
CNBC of the U.S., an economic media outlet, said in its financial report on the 3rd that Meta warned that it could close European Facebook and Instagram services if it becomes impossible to continue moving user data in Europe to the U.S. as it is now.
Earlier, the European Court of Justice (ECJ) ruled in July 2020 that data movement standards between Europe and the United States did not adequately protect the personal information of European citizens.
As a result, European regulators have currently entered into legislation that newly regulates the process of EU users’ information being handed over to the United States.
The ECJ took such measures because the U.S. government authorities can access user information that has moved to the U.S. In fact, U.S. intelligence agencies can request user information from Internet companies such as Facebook.
As a result of this, Meta’s stock price seems to have been on a sharp decline that day. Meta’s stock price has recently plunged day after day, plunging more than 26% due to earnings warnings on the 3rd.
As a result, the market capitalization also decreased to $6121 billion. Meta’s market capitalization once exceeded $1 trillion.