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This reads less of a threat from Meta, and more of outlining all possible outcomes in an annual report - one they have to do, else risk shareholders suing, and

This reads less of a threat from Meta, and more of outlining all possible outcomes in an annual report - one they have to do, else risk shareholders suing, and winning, in the extremely unlikely case they would restrict some of their product offering in Europe as a flex. This is similar to how, if you read S1 filings, they will list all possible things that could go wrong, and ways the business can stumble, for the same reason. Meta is reasoning how they would be unable to do cross-region ad targeting with the current regulation. None of what they write has anything to with Instagram or Facebook's ability to operate. It all has to do with how accurate and profitable Facebooks' cross-region ad targeting would be. An underlying story not reported by Mashable is how the increasingly restrictive EU regulations do, in fact, present more cost and headaches for all companies operating globally. For any small and medium-sized business, it's increasingly not economical to implement adhering to regulations themselves: and it increasingly makes sense to use middlemen who provide these services - from payments processing to user data storage. It feels we're entering a time when operating globally will mean investing resources and custom development to operate within the regulations in the EU, in India (also pushing for more EU-style regulations) and in China (a different beast altogether). The regions who have not yet implemented similar regulations and are more of an "operate however you want" model are the US, Canada, LatAm and Africa.

hrbf 5y ago
Precisely. It’s about managing investor expectations. They will never leave the European market and therefore lots of money on the table. They do feel the effects of privacy laws and tracking prevention though. It further betrays the entitled arrogance of exclusively ad-run businesses. It’s still profitable, just not as profitable as before.
Isinlor 5y ago
It's actually USA law that is the problem here. Specifically, the fact that USA agencies can do whatever they want whenever they want with EU citizens data and have 0 accountability to EU citizens. Basically, we have as much rights as USA intended for terrorists. We had "Privacy Shield" framework that was allowing to transfer data to USA, but the framework (and the one before that) was invalidated by the European Court of Justice in Schrems II ruling due to lack of protections for EU citizens in USA law.
marcyb5st 5y ago
The thing I am failing to understand is if users embeddings can be moved across the Atlantic. The regulation is really not clear about that. I mean, if my browsing habits / purchase preferences can be compressed in an array of 512 floats that is gibberish (and for all intense and purposes a 1 way function unless you have the other tower of two towers model for recommenders) does that break regulations? If it doesn't, I am failing to see the technical problem that Meta is facing, especially considering all the resources and engineering manpower they have. A quick back of the envelope calculation for a worst case scenario tells me that assuming 1B users and 1B ads corpus * 512 * 32 bits that's around 30 TBs to move to keep US and EU users and ads portfolio in sync. Considering the connectivity that Facebook already has between US/EU and the future capacity (https://www.zdnet.com/article/nec-scores-deal-to-build-facebook-transatlantic-half-petabit-cable/ https://www.zdnet.com/article/nec-scores-deal-to-build-faceb...) these can be recalculated and synced multiple times per day. And if moving embeddings outside of the EU is not allowed, they could create temporary ones for the users when they are browsing in the US. Considering that the vast majority of EU users in the US are there for holidays/short stays I would also expect the purchasing habits to change since they are in a different mood/context. So I think this is a PR stunt to avoid doing the extra engineering work and managing investors expectations.
fxtentacle 5y ago
I believe this is exactly what the EU intended. Currently, Facebook is profiting handsomely off EU users but using every loophole in the book to avoid paying taxes. If they make it difficult to run operations that cross the EU-US border, then that's a problem for Facebook, but EU-only startups will be just fine. In effect, it shields EU companies from US competition.
- Isinlor 5y ago
  This is not what EU political bodies intended. In fact EU made agreements with USA twice to avoid this situation. And EU courts decided twice that the agreements were invalid due to lack of protections to EU citizens in USA. EU commission wants to sign new agreement with USA, but they do not want to be found incompetent by EU courts for the third time. So, this time EU negotiates for meaningful protections, but USA does not want to provide them.

hrbf 5y ago

Precisely. It’s about managing investor expectations. They will never leave the European market and therefore lots of money on the table. They do feel the effects of privacy laws and tracking prevention though. It further betrays the entitled arrogance of exclusively ad-run businesses. It’s still profitable, just not as profitable as before.

Isinlor 5y ago

It's actually USA law that is the problem here. Specifically, the fact that USA agencies can do whatever they want whenever they want with EU citizens data and have 0 accountability to EU citizens. Basically, we have as much rights as USA intended for terrorists. We had "Privacy Shield" framework that was allowing to transfer data to USA, but the framework (and the one before that) was invalidated by the European Court of Justice in Schrems II ruling due to lack of protections for EU citizens in USA law.

marcyb5st 5y ago

The thing I am failing to understand is if users embeddings can be moved across the Atlantic. The regulation is really not clear about that. I mean, if my browsing habits / purchase preferences can be compressed in an array of 512 floats that is gibberish (and for all intense and purposes a 1 way function unless you have the other tower of two towers model for recommenders) does that break regulations? If it doesn't, I am failing to see the technical problem that Meta is facing, especially considering all the resources and engineering manpower they have. A quick back of the envelope calculation for a worst case scenario tells me that assuming 1B users and 1B ads corpus * 512 * 32 bits that's around 30 TBs to move to keep US and EU users and ads portfolio in sync. Considering the connectivity that Facebook already has between US/EU and the future capacity (https://www.zdnet.com/article/nec-scores-deal-to-build-facebook-transatlantic-half-petabit-cable/ https://www.zdnet.com/article/nec-scores-deal-to-build-faceb...) these can be recalculated and synced multiple times per day. And if moving embeddings outside of the EU is not allowed, they could create temporary ones for the users when they are browsing in the US. Considering that the vast majority of EU users in the US are there for holidays/short stays I would also expect the purchasing habits to change since they are in a different mood/context. So I think this is a PR stunt to avoid doing the extra engineering work and managing investors expectations.

fxtentacle 5y ago

I believe this is exactly what the EU intended. Currently, Facebook is profiting handsomely off EU users but using every loophole in the book to avoid paying taxes. If they make it difficult to run operations that cross the EU-US border, then that's a problem for Facebook, but EU-only startups will be just fine. In effect, it shields EU companies from US competition.

Isinlor 5y ago
This is not what EU political bodies intended. In fact EU made agreements with USA twice to avoid this situation. And EU courts decided twice that the agreements were invalid due to lack of protections to EU citizens in USA. EU commission wants to sign new agreement with USA, but they do not want to be found incompetent by EU courts for the third time. So, this time EU negotiates for meaningful protections, but USA does not want to provide them.