Facebook to put 1.5B users out of reach of new EU privacy law
san francisco — If a new European law restricting what companies can do with people’s online data went into effect tomorrow, almost 1.9 billion Facebook users around the world would be protected by it.
The online social network is making changes that ensure the number will be much smaller.
Facebook members outside the United States and Canada, whether they know it or not, are currently governed by terms of service agreed with the company’s international headquarters in Ireland.
Next month, Facebook is planning to make that the case for only European users, meaning 1.5 billion members in Africa, Asia, Australia and Latin America will not fall under the European Union’s General Data Protection Regulation (GDPR), which takes effect on May 25.
The previously unreported move, which Facebook confirmed to Reuters on Tuesday, shows the world’s largest online social network is keen to reduce its exposure to GDPR, which allows European regulators to fine companies for collecting or using personal data without users’ consent.
That removes a huge potential liability for Facebook, as the new EU law allows for fines of up to 4 per cent of global annual revenue for infractions, which in Facebook’s case could mean billions of dollars.
The change comes as Facebook is under scrutiny from regulators and lawmakers around the world since disclosing last month that the personal information of millions of users wrongly ended up in the hands of political consultancy Cambridge Analytica, setting off wider concerns about how it handles user data. The change affects more than 70 per cent of Facebook’s 2 billion-plus members. As of December, Facebook had 239 million users in the United States and Canada, 370 million in Europe and 1.52 billion users elsewhere.
Facebook, like many other US technology companies, established an Irish subsidiary in 2008 and took advantage of the country’s low corporate tax rates, routing through it revenue from some advertisers outside North America. The unit is subject to regulations applied by the 28-nation European Union.
Facebook said the latest change does not have tax implications. Meanwhile, Facebook is building a team to design its own semiconductors, adding to a trend among technology companies to supply themselves and lower their dependence on chipmakers such as Intel and Qualcomm, according to job listings and people familiar with the matter.
The company is seeking to hire a manager to build an “end-to-end SoC/ASIC, firmware and driver development organisation”, according to a job listing on its corporate website, indicating the effort is still in its early stages.
The Menlo Park, Californiabased company would join other technology giants tackling the massive effort to develop chips. In 2010, Apple started shipping its own chips and now uses them across many of its major product lines. Alphabet’s Google has developed its own artificial intelligence chip as well.
Facebook could use such chips to power hardware devices, artificial intelligence software and servers in its data centres. — Reuters/Bloomberg