EU fines Meta $1.3 billion for user data transfers

Yahoo Finance Live discusses Meta receiving a $1.3 billion fine from the EU over data transfers to the U.S.

Video transcript

SEANA SMITH: Let's take a look at Meta because the company hit with a huge fine from the EU, a record $1.3 billion over the transferring of European user data to the US. Now, the crackdown also includes a deadline after regulators said that it failed to protect personal information from the American security services here. It's not having much of an impact on the stock today. But, of course, Akiko, this points to a larger discussion here, just the implications of this fine, what it not only means for Meta, but what it means for the broader tech players, a number of companies as well.

AKIKO FUJITA: Yeah, not seeing a whole lot of stock move there. We've come to learn that with regulation, these things don't really swing the stock in a significant way because the expectation is that this is a very long conversation or a conversation that's going to happen over a very long period of time. Important to note, though, when you look at what happened today, I mean, this shows that the EU is really starting to step up enforcement of GDPR. And remember, that has been in effect for about five years now.

Certainly, when you think about the fine itself, yes, it's a lot of money. Is it significant for Meta overall? Well, not monetarily maybe. But the reality is this points to the fact that Meta, at least the ruling from the EU is that they have not been securing that data from European users, which they're ruling essentially says you can't freely send the information across the Atlantic. Because there is concern about that data being accessed by American spy agencies, at least that's how the Europeans describe it.

So Seana, it's interesting to me in the context of so many countries, in the case of the EU, really stepping up data collection. And that's something the US has been doing as well. But this is just one example of how we're starting to see these lines get divided.

SEANA SMITH: And we know Europe, the EU has certainly been one of the leaders here in this space just in terms of the crackdown of these tech giants. When it comes to the pressure, though, that the US now faces-- and you're better to speak to this than I am-- just in terms of the pressure mounting pressure that the US government faces in order to reach that deal and also just the significance, the fact that this was a $1.3 billion fine, what signal do you think that this sends, kind of, to those other players out there? Yes, it's not huge for Meta. But for a smaller company, a massive fine like this could be devastating.

AKIKO FUJITA: Yeah, well, you can bet that these big tech companies are definitely amping up the pressure to the US government to sign some kind of deal between the US and the EU about data sharing. Because the reality is because those guardrails haven't been established, the EU has been leading the conversation on this. Today is just yet another example.

But, you know, Seana, worth discussing that this is, kind of, again, another example of how data has really become the heart of concerns around national security. We've seen it here in the US with data collection concerns around TikTok. We've seen it in other countries as well. And you can bet that it's going to only, only become a bigger issue because of all that data that's collected. And the reality is it's a tough thing to enforce because, as you know, in the internet, when you're talking about data being stored, it's very hard to put up those walls between countries, between regions.

SEANA SMITH: Yeah, certainly. And there was an analyst quoted here in a journal piece saying that the next few months are going to be very critical here when it comes to the debate around data and exactly what that looks like for many, many companies. All right--