Threads, Meta’s new microblogging app, launched worldwide this week, except for countries in the European Union, where strict privacy laws make it unclear when or if Twitter’s competitor app will see the light of day.
Meta is reluctant to launch Threads in the EU until it is assured that the app doesn’t violate European law, as Meta’s other platforms – including Facebook, Instagram and WhatsApp – have done in the past.
“Meta’s failure to start threads in the EU has more to do with the issue of European regulation than the business case for adoption,” says Niamh Burns of Enders Analysis, a based media research group in London. Burns points out that setting up the new app, which bundles Instagram and Threads together to create a “captive audience” (users set up Threads using their existing Instagram accounts, and you can’t delete your Threads account, without deleting Instagram), “the kind is. What European regulators hate.”
Mark Zuckerberg is betting consumers fed up with the chaos and toxicity of Twitter will flock to his new microblogging app, touted as a “friendlier” and “healthier” alternative to the Elon Musk-powered platform. But its appeal to advertisers is even more ominous, according to critics: Threads is designed to track everything about its users, from location and browsing history to health and financial data, to better enable more targeted advertising.
EU regulators won’t like that, as in January they found the legal basis Meta had used to process its personal data of European Facebook and Instagram users to serve targeted ads unlawful, and fined Meta 435 million US dollars (400 euros) occupied million). Meta is appealing this ruling, but it is just one of several legal attacks by the EU on the fundamentals of its business model.
On July 4, the European Court of Justice, the EU’s top court, issued a ruling that supported an earlier decision by the German Cartel Office (BKartA) that required Meta to obtain user consent before collecting data for their targeted ads behavior. That ruling also reinforced the FCO’s contention that antitrust authorities can take privacy concerns into account when determining whether a company is exploiting its competitive advantage. Some said the decision could spell the end of Meta, at least in Europe “Surveillance Capitalism” business model.
“This week’s ruling strengthens the position of regulators when it comes to Meta’s core business,” Burns said. “It is important in terms of enforcement powers, although it is not yet clear how it will be interpreted to impact Meta’s broader data practices. Meta’s business model could be at risk here.”
Also on American Independence Day, Thierry Breton, EU Commissioner for the Internal Market, announced in a LinkedIn post that Meta was one of seven companies (alongside Amazon, Apple, Google parent Alphabet, TikTok owner ByteDance, Microsoft and Samsung) identified as “digital gatekeepers” under the new Digital Markets Act (DMA). The designation means that the companies have to comply with stricter regulations in order to operate in the EU because of their perceived market dominance. The new rules include: They can’t onboard users into their digital ecosystem — like Meta currently does with threads — and share information between the two services.
Breton said Meta and the other global tech giants need to learn that “with great power comes great responsibility — and impeccable conduct.” Companies appointed by the EU as gatekeepers have until early next year to comply with the new rules or face hefty fines if they do not.
“If Meta wanted to play well with the EU, they would have to launch Threads as a completely separate service in Europe,” says Burns. “Would it be worth it for Meta? Threads is currently piggybacked on Instagram, and it wouldn’t take off anytime soon if Meta couldn’t take advantage of this existing audience. [Remember] that Instagram already has far more users than Twitter ever has. Without this benefit, it becomes more difficult for users to connect, it takes longer to build a network, and it becomes more difficult for the organization to tailor recommended content to users without using their existing user credentials. If Threads can’t capitalize on Instagram’s strength in Europe, they don’t have their secret weapon. Meta would merely rely on escapees from Twitter’s self-destruct.”
Instagram’s European user base is substantial. Meta has announced that it currently has nearly as many Monthly Active Users (MAUs) on Instagram in the EU, at 250 million, as Facebook (255 million).
“If Meta can’t take advantage of its quarter billion European Instagrammers, it might be a better strategy to wait until Threads has gained some traction in the US and UK,” says Burns. “Then it can be launched in the EU when the app has more content and a larger existing network.”
However, that assumes the EU would further tighten regulations to make life harder for Meta. Just last month, EU regulators slapped Meta with a record €1.2 billion ($1.3 billion) fine for “repeated and continuous” violations of European law related to the transfer of European user data to the US. The ruling is part of a long-running legal battle over where Facebook stores its data and whether US intelligence agencies can access European users’ data. The court order applies specifically to Facebook, but could theoretically also apply to other meta-services, including threads, if they fail to adequately protect Europeans’ personal data. Threads’ currently conceived data-scraping business model precludes this type of data protection. Meta has appealed the decision.
This long list of court decisions and regulations points to that fact — correctly highlighted by Meta’s President of Global Affairs, Nick Clegg in an answer on last month’s $1.3 billion fine – that Europe and the US have “a fundamental legal conflict” over privacy issues.
Meta’s gobble-up and sell-to-advertiser approach works well in America (and the UK and most of the rest of the world), but not in the EU, where regulators tend to want to make it even harder for the big platforms to collect and Sharing User Data. Given this pan-Atlantic divide and the regulatory threat Meta faces from the Digital Markets Act, the future of Threads in Europe is a small matter. Meta’s complaint about “regulatory uncertainty” slowing the launch of its new app is just a “poor score,” Burns notes. “The regulatory threat is much bigger than threads.”