A new European law is putting restrictions on what companies can do with people’s online data. If it went into effect tomorrow, almost 1.9 billion Facebook users around the world would be protected by it. The Silicon Valley company is therefore making changes that would make sure only European users are covered by the EU’s General Data Protection Regulation (GDPR), which takes into effect on 25 May. This change in the terms of service comes as the US company is being scrutinized by regulators and lawmakers around the global following the disclosure last month that the personal data of millions of Facebook users wrongly ended up in the hands of political consultancy Cambridge Analytica. This unleashed concerns about how Facebook handles user data.
Facebook users outside the United States and Canada are currently protected by the terms of service with the company’s international headquarters in Dublin. The social network company is now trying to reduce the number of people that would be protected by GDPR, which allows European regulators to fine firms for collecting or using personal data without users’ consent. This could potentially save Facebook a lot of money as the EU’s fine could go up to 4 percent of global annual revenue, meaning billions of dollars for Facebook.
Meanwhile, Facebook played down the importance of the terms of service change and said that the privacy controls that Europeans will get under GDPR would be available to the rest of the world. “We apply the same privacy protections everywhere, regardless of whether your agreement is with Facebook Inc. or Facebook Ireland,” the company said.Facebook, just like many other US tech companies, opened its European HQ in Ireland, taking advantage of the country’s low corporate tax rates. The Dublin office is, however, covered by the European Union’s regulations. As of December, Facebook had 239 million users in the US and Canada, 370 million in Europe and 1.52 billion elsewhere.