International
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An American musician with the Russian rock group LoviNoch (Catch the Night) has been arrested in Moscow on suspicion of drug trafficking, according to media reports.
Michael Travis Leake, whose Instagram account identifies him as the band’s singer (his last post was on Feb. 3), is suspected of selling mephedrone, a drug with similar effects to cocaine and MDMA, CNN and the Associated Press reported, citing Russian media reports and a statement on Telegram from a Moscow.
Leake faces charges for the distribution or production of drugs, which carry a sentence of up to 20 years in prison. A Moscow court has ordered him to be held for two months in pre-trial detention, the reports say.
CNN reported that Russian media outlets, including Ren TV, a tabloid outlet, published a video of Leake’s arrest at his home and a mug shot from a Russian police station on Thursday (June 8). “I don’t understand why I’m here. I don’t admit guilt, I don’t believe I could have done what I’m accused of because I don’t know what I’m accused of,” Leake reportedly said.
A former paratrooper with the U.S. military who has lived in Moscow since 2010, Leake appeared on a 2014 episode of Anthony Bourdain: Parts Unknown in Moscow and St. Petersburg after being handpicked by Bourdain to appear on the show. In the episode, he half-joked that the KGB was listening in on their conversation and tailing Bourdain.
The episode’s producer, Darya Tarasova, told CNN that Leake and his friends were vocal critics of Russian state censorship and advocates for free speech in the country.
The U.S. State Department confirmed Leake’s detention in a statement sent to Billboard, with a spokesperson writing, “The Department of State takes seriously its commitment to assist U.S. citizens abroad. It is our standard practice to reach out to the families of U.S. citizens detained overseas as soon as we are provided permission by the individual. We have attempted to reach out to Mr. Leake’s family. We stand ready to provide all appropriate consular assistance to Mr. Leake and his family.”
On Sunday, the State Department told CNN that U.S. embassy officials had attended Leake’s arraignment the day prior. “We will continue to monitor the case closely,” a State Department spokesperson told the outlet.
Leake is the latest American to be detained by Russian officials since the country’s military forces invaded Ukraine in February 2022. Punitive economic sanctions by the United States and its Western allies have further strained tensions with Russia.
In another drug-related case, WNBA star Brittney Griner was arrested the month of the invasion after vape canisters containing cannabis oil were found in her luggage at a Moscow airport. A Russian court sentenced her to nine years in prison, but she was released in December in exchange for U.S.-imprisoned Russian arms dealer Viktor Bout.
And in March, Russian officials detained Wall Street Journal correspondent Evan Gershkovich, accusing him of espionage, which he denies. On May 23, a Russian court extended his arrest by three months.
Plans are afoot for a “modern reimagining” of the 1985 classic “We Are the World” — dubbed “We Are the World NOW” — as a multi-country, live recording and televised music event. In the words of the project’s producer, Jeffrey Weber: “We are taking “We Are the World NOW” to the world.”
Separate recordings of the song will be produced in Korea, China, Japan, Australia, England, Italy, France, Germany, Brazil, Mexico, Spain and one or more African countries. Additional countries may be announced later.
The original 1985 recording of the humanitarian anthem “We Are the World,” by USA for Africa, was designed to alleviate starvation on the African continent. With “We Are the World NOW,” “a percentage of the revenue from the sale of the recordings and associated products will be split between a noted charity in each country devoted to ending world hunger and a third-party charity devoted to the same goals on a global basis,” according to a statement.
“We Are the World” — co-written by Michael Jackson and Lionel Richie and produced by Quincy Jones — was a global smash in 1985. It topped the Billboard Hot 100 for four weeks and went on to win Grammys for record and song of the year. “We Are the World 25″ — a cover version by another all-star grouping, Artists for Haiti — reached No. 2 on the Hot 100 in 2010, though it didn’t have anywhere near the same cultural impact as its predecessor. That one was produced by Jones, Richie, RedOne, Mervyn Warren, Patti Austin, Humberto Gatica, Wyclef Jean and Rickey Minor.
Weber says that he has not yet connected with Richie, the Jackson estate or Jones about the project. He wouldn’t need permission, beyond a compulsory license, to cover the song, but adds, “Once there is a broadcaster in place, we would have to strike a deal for publishing rights to the original song with Lionel as well as the Jackson estate if the project were to be shown on any device that has a visual image, such as a DVD, television, computer screen, movie theater, etc.”
The project’s creator and executive producer is Sunny Ogbamichael, a Korean entrepreneur. “Never before in our history are we, as a people, more divided on so many levels,” she said in a statement. “We are divided socially, economically, racially, religiously and politically. In what I hope will be a unifying effort, we are producing reimagined and modernized versions of the song, ‘We Are the World,’ in over a dozen countries, while aligning with indigenous charity partners dedicated to ending world hunger.”
Pre-production is set to begin on July 1, at which time Weber will start to gather musicians and singers from each country. The first recording session is expected to be in Seoul, South Korea in the first quarter of 2024.
Each country’s session will be recorded live, but not on the same day.
Weber says the “We Are the World NOW” live event series will be recorded in over a dozen countries: “We are assembling the finest local arrangers, musicians and vocalists in each country to record contemporary versions of the song in the language of each country and incorporating the indigenous instruments of each country. The project will be recorded live, in world-class studios in each country.”
To assist the various arrangers in each country, Weber will initially record a modern take on the original song that can be augmented by the arrangers in each country or used as an example for each country’s selected arranger to create their own arrangement. Weber’s recording will feature a band that Weber has assembled, including Gregg Bissonette (Ringo Starr), Matt Bissonette (Elton John), Tariqh Akoni (Josh Groban), Dapo Torimiro (John Legend) and Troy Laureta (Ariana Grande). The song will also feature rappers, including Prodigal Sunn (Wu-Tang Clan, Sunz of Man) and Anacron.
“I expect that each country’s arranger will have a different approach to what a modern version of the song will be,” says Weber. “I am going to leave the arrangement up to each arranger, but when you add the indigenous instruments to the mix, it promises to be interesting, at least. I do expect rap to be a part of some of the versions. We will be doing a symphonic version of [the arrangement] in China which will be arranged and conducted by Christina Liang.”
Weber has worked as a concert, event and music festival producer and has also produced hundreds of albums. He teamed with Morgan Ames to produce the album Diane Schuur and the Count Basie Orchestra, which was a double Grammy winner in 1988 for best jazz vocal performance, female (for Diane Schuur) and best instrumental arrangement accompanying vocals (for arranger Frank Foster).
Grammy and Emmy-winning engineer, Clark Germain, will record and mix the entire project. Germain won a Grammy in 2004 for best jazz instrumental album, individual or group for his work on Wayne Shorter’s Alegría. He won an Emmy in 2017 as a scoring mixer on Amazon’s Mozart in the Jungle, which was awarded outstanding sound mixing for a comedy or drama series (half-hour) and animation.
Broadcast and distribution partners for “We Are the World NOW” have yet to be finalized.
HYBE is reportedly in talks with investors to raise around $380 million (500 billion won) to fund acquisitions outside of the South Korean entertainment market, according to a report by Bloomberg. The agency and entertainment company is exploring taking on strategic and financial investments in exchange for equity, the outlet reported Thursday, citing sources who […]
Three HYBE employees could be prosecuted for insider trading in South Korea for allegedly using non-public information about K-pop group BTS’ planned hiatus before the news was given to investors, according to multiple reports out of South Korea. South Korea’s Financial Supervisory Service (FSS), the equivalent of the Securities Exchange Commission in the U.S., […]
LONDON – Key players from the United Kingdom’s music industry have pledged to improve the digital metadata for song recordings to help ensure that artists and rightsholders are paid fairly.
Under the voluntary two-year agreement published Wednesday (May 31) by the U.K. government’s Intellectual Property Office (IPO), the U.K. industry commits to progressively improve metadata for new music recordings and to accurately award credits on streaming services.
Signatories include representatives of major and independent record labels, publishers, creators and streaming services. Trade bodes BPI —which represents more than 500 labels, including the U.K. arms of Universal Music Group, Sony Music Entertainment and Warner Music Group — and the Association of Independent Music (AIM), which acts on behalf of U.K. independent record labels and music companies, are among the music groups backing the pledge
The U.K. government also says that it will be setting up a new working group with music business stakeholders “to explore and consider industry-led actions on remuneration for existing and future creators” over the coming weeks. The working group will review a range of issues facing creators and rightsholders, says the IPO, including the impact of artificial intelligence.
“The U.K. is a hotbed for world-beating musical talent but as technology advances we need our thriving music industry to continue to offer viable career opportunities,” John Whittingdale, a U.K. government minister for the creative industries, says in a statement.
Whittingdale calls the metadata pact a “landmark agreement” that will help ensure musicians “in the digital age are fairly credited and compensated for their contributions and creativity.”
As streaming has grown to become the dominant mode of music consumption globally, the need for accurate metadata — the descriptive data underlying music recordings detailing who contributed what to a song’s creation and who owns it — has grown in importance in determining who gets paid what share of a track’s streaming royalties. But digital platforms, artists and rightsholders have complained that streaming metadata is often incomplete or inaccurate, which delays payments to songwriters and labels.
“Currently a fraction of recordings being streamed properly credit the people that wrote and published the song,” says Graham Davies, CEO of U.K. songwriters trade group The Ivors Academy, which has also signed the metadata agreement.
In 2021 the Ivors Academy estimated that at least £500 million ($625 million) in global streaming royalties a year were being wrongly allocated or not being paid at all due to missing or incomplete metadata. In a statement, Davies says the pledge “gives us the first proper step on a journey of closing the metadata gap.”
Sophie Jones, BPI interim CEO, says she hopes the agreement will lead to “immediate improvements” in the “speed and accuracy of songwriter payments.”
Other music groups and companies backing what is officially titled the United Kingdom Industry Agreement on Music Streaming Metadata include The Digital Entertainment and Retail Association (ERA), whose members include streaming services; Hipgnosis Songs Fund; the Music Publishers Association (MPA); Musicians’ Union (MU); Featured Artists Coalition (The FAC) and U.K. collecting societies PRS for Music and Phonographic Performance Limited (PPL).
Wednesday’s metadata agreement is the latest in an ongoing series of government-led interventions into the U.K. music industry that spun out of a Parliamentary inquiry into the economics of the music streaming business.
That initial review concluded in July 2021 with the Department for Digital, Culture, Media & Sport (DCMS) Select Committee calling into question the major record labels’ dominance of the industry and branding the global streaming model as unsustainable in its current form, saying it “needs a complete reset.”
Since then, the government has initiated multiple investigations and inquiries into the U.K. music industry, including a market study review of the record business by the U.K. competition regulator. That ended in November when the Competition and Markets Authority (CMA) determined that low returns from streaming for most artists “are not the result of ineffective competition” between the three major labels.
Last year the British government set up two working groups – led by the IPO and made up of industry stakeholders — looking at issues raised by the Parliament probe. One focused on metadata, which has now concluded. A second working group is looking at improving transparency around licensing and royalties for artists. The IPO says it is due to publish the second group’s findings, including a code of practice, in the coming months.
A South Korean law firm representing three members of K-pop boy band EXO says the singers are pursuing legal action against their longtime label and management agency SM Entertainment over contractual issues related to “slave contracts.”
In a press release, Lin Law Firm claims it has represented K-pop stars Baekhyun, Chen and Xiumin — who are members of EXO and also perform together in a splinter trio unit named EXO-CBX — since March over pay and contract disputes with SM Entertainment, who debuted EXO in 2012 and are home to acts like TVXQ!, Girls’ Generation, SHINee, NCT and aespa.
Baekhyun, Chen and Xiumin (whose full names are Byun Baekhyun, Kim Jongdae and Kim Minseok, respectively) claim SM has shown a lack of payment transparency and required unreasonably long contracts extending beyond 12 years, according to a five-page document reviewed by Billboard that was sent by Lin Law Firm attorney Lee Jaehak.
The firm alleges that despite the trio signing exclusive, long-term contracts with SM, the K-pop company has not provided full data about the artists’ payments as they recently requested. Lin Law adds that the artists have always trusted SM’s payments despite Korean law requiring entertainment companies to provide updates on payment settlements twice a year.
Lin Law Firm also claims that SM has used its position in the K-pop market to force artists to sign with the company for longer than the industry standard seven years — deals it calls “slave contracts.” The firm says that SM automatically extends artist contracts by three years if the artist works overseas, which applies to Chen and Xiumin, as the two were originally part of the China-focused group EXO-M. Meanwhile, Baekhyun has released solo music in Japan and was a part of the U.S.-focused, Billboard 200-topping “supergroup” SuperM.
The final point in Lin Law’s document includes an apologetic message to fans and a pledge to resolve the dispute.
SM Entertainment has not responded to Billboard‘s request for comment. Baekhyun, Chen and Xiumin have not publicly commented on the matter, either.
Alleged “slave contracts” are a historically sensitive spot for SM Entertainment. In 2009, three of the original five members of boy band TVXQ! asked Korean courts to examine their 13-year contracts, citing extreme length and worries about payment distribution. Over the course of three-plus years of legal battles, singers Kim Jaejoong, Park Yoochun and Kim Junsu won the right to work independent of their SM deals and formed a new boy band named JYJ. By November 2012, the two parties mutually agreed to terminate the SM contracts, which would have expired in 2016 at the earliest.
As a result, South Korea’s Fair Trade Commission created a rule in 2010 that did away with so-called “slave contracts,” requiring entertainment companies to sign individuals for a maximum of seven years initially. Lin Law does not explain how SM could legally surpass the rule.
As members of EXO, Baekhyun, Chen and Xiumin helped lead K-pop’s international expansion with the group’s dual focus on releasing music in both Korean and Chinese. In April 2015, EXO set a new record for the largest sales week for K-pop artists in America at the time when its Exodus album sold 6,000 copies, according to Luminate. It held that record until late 2016.
EXO has scored five No. 1s on Billboard‘s World Albums chart, while EXO-CBX also topped the chart with its debut record Hey Mama! from 2016. All three members have also released solo albums, with Chen releasing a new song, “Bloom,” on May 30 through SM Entertainment. After several EXO members fulfilled their South Korean military duties, the group reunited for the first time in years. SM has confirmed the group would release a new studio album together this year.
Reservoir Media on Wednesday reported that revenues grew by 13% during its most recent fiscal year, as investments in record labels and artists rights in the Middle East added to its growth from acquiring works by North American artists like Louis Prima and Dion.
Reservoir reported $122.3 million in revenue for their fiscal year 2023 ending March 31, driven by a 9% increase in music publishing revenue and an 18% increase in recorded music revenue, both helped by the digital release of De La Soul‘s first six studio albums in early March. The legendary rap trio’s catalog netted 12.5 million U.S. song streams and sold 28,000 albums in its first week streaming, according to Luminate.
Founded in 2007, Reservoir said it grew by 8% organically and finished at the top-end of its financial targets in fiscal 2023 despite a 1%-decline in fourth quarter revenue driven by lower performance, sync and other revenues in its music publishing division, which suffered from a tough comparison to a strong year-ago quarter.
Fourth quarter music publishing revenue of $23.2 million was off 8% from the year-ago quarter when Reservoir benefitted from a one-off event in Dubai. Recorded music revenue in the quarter rose 10% to $10.8 million, in part due to the outsized performance of De la Soul’s catalog.
Reservoir has made investing in emerging markets a key prong of its growth and diversification strategy, and on a call with analysts, Reservoir CEO Golnar Khosrowshahi referred to it as “highly important to our overall strategy … as we work to become the largest holder of Arabic music copyrights.”
With its partner PopArabia, an independent music company headquartered in the United Arab Emirates, Reservoir has acquired stakes in the Egyptian label 100COPIES, the Lebanese label and music publisher Voice of Beirut and signed publishing deals with Egypt’s Mohamed Ramadan, Lebanon’s Zeid Hamdan and Moroccan hip-hop star 7liwa. In January, Reservoir announced signed publishing deals for the catalogs and future works of Indian rappers MC Altaf and D’Evil and the producer Stunnah Beatz.
Funds like Reservoir also grow inorganically through acquisitions of song catalogs, and over its past fiscal year it acquired rights by “the Saxophone Colossus” Sonny Rollins and Dion, best known for “Runaround Sue” and “The Wanderer.”
Reservoir’s chief financial officer Jim Heindlmeyer told analysts that the company expects 6% revenue growth f 9% growth for adjusted earnings before interest, tax, depreciation and amortization for this fiscal year, compared to midpoint of its 2023 guidance ranges.
“Our outlook includes strong top-line growth expectations and margin expansion across our business segments as we continue to see a positive impact on profitability from our strategic acquisitions and benefit from secular tailwinds across the music industry,” Heindlemeyer said.
The U.K. organization Women in CTRL is the second recipient of IMPALA’s Changemaker award, it was announced on Tuesday (May 30). The not-for-profit organization, founded by Nadia Khan, seeks to advance gender equality in the music industry.
Women in CTRL encourages women and non-binary persons to find their strengths, develop their own personal brands and build the tools and confidence to become leaders. The organization runs creative growth programs, community workshops, mentoring, training, organizing events and more.
Women in CTRL also publishes research and reports, such as the “Seat at the Table” report looking at the representation of women, with an intersectional focus on Black women, in the boardroom of U.K. music trade bodies. They also released the “Women in Radio” report looking into the experiences of women in the radio industry to identify the barriers women face.
Women in CTRL has also partnered with AIM and Amazon Music to launch a new apprenticeship program, “Amplify,” which aims to improve access to music industry careers for women and non-binary people.
“It’s an honor for Women in CTRL to be chosen as the second recipient of the Changemaker award,” Khan said in a statement. “This recognition affirms our work, inspires us to continue and highlights the independent community’s collective determination and passion in driving positive change within the music industry. Women in CTRL firmly believe in the transformative power of sharing best practices and learning from the exceptional organizations that IMPALA champions.”
“Women in CTRL is an inspiration to all in the sector who seek to bring change,” Helen Smith, IMPALA’s executive chair, said in a statement. “It’s an honor to be able to showcase their work through our Changemaker Award.”
The Changemaker Award puts the spotlight on projects that champion DEI work (dubbed “equity, diversity and inclusion” in Britain). The recipient is selected yearly by IMPALA’s DEI task force. Launched in May 2022, the award highlights projects that have an impact on the independent music sector. It is presented yearly during European Diversity Month.
The POWER UP initiative was the inaugural recipient last year. Launched in January 2021, POWER UP provides mentoring, support and grants for 40 Black music creators and industry professionals.
IMPALA was established in 2000 and now represents nearly 6,000 independent music companies. IMPALA’s mission is to grow the independent music sector sustainably, return more value to artists, promote diversity and entrepreneurship, improve political access, inspire change and increase access to finance.
Now that the pandemic is over, “it is anything but ‘business as usual’” at CISAC, the international trade organization for copyright collecting societies, according to director general Gadi Oron in its 2023 annual report.
In a time of change for collecting societies, which bring in a combined 9.6 billion euros a year, CISAC’s priorities include lobbying governments in support of member societies, continuing its campaign to support the ISWC code system to identify works, and navigating the challenges of AI, which Oron calls “our biggest priority now in terms of policy.”
The biggest news in the report about a particular market is the success of Autodia, the Greek collecting society that has become prominent since the 2018 dissolution of AEPI. “In 2018, I gave a presentation to the board [of CISAC and said we must do something,” Oron remembers. AEPI’s collapse was epic, complete with a 2017 police raid and a failure to pay out 42.5 million euros (more than the total amount it distributed some years), according to an audit ordered by the Greek Ministry of Culture. Oron feared the potential collapse of a market that had been worth about 50 million euros a year in the late 1990s, so he asked the CISAC’s board to support a plan to fund and help Autodia, which was then a small nonprofit society that in 2018 collected less than a million euros.
In 2022, Autodia collected 16.2 million euros, and it now collects for all three major publishers, BMG, and many of its sister societies, according to CEO Margarita Panagiotopoulou. “We are growing fast and gaining market share,” Panagiotopoulou says, “and that is on track to continue.”
Autodia now faces competition from EDEM, which mostly represents Greek repertoire and took in about 8 million euros last year.
The first phase of CISAC’s plan was to get Autodia loans from its member societies and send to Athens consultant Declan Rudden, who became interim CEO of Autodia to get the society running. He helped make reciprocal agreements with international societies and court publishers, as well as compete with EYED, a government-controlled entity that was designated as the temporary successor to AEPI. (Some major publishers originally signed with EYED but most of them are now with Autodia.) One day, as Rudden and team were putting together desks in the Autodia office, it was raided by the Greek department of labor and fined for keeping employees after 5pm without notifying them in advance. (This is illegal in Greece, but raids are uncommon.) “They did everything to make our life difficult,” remembers Rudden, who runs the consultancy SaorServices.
Gradually, the local team took over, and Autodia took in more than 4 million euros by 2019, then more than 12 million euros by 2022, as the pandemic subsided. “The contribution of CISAC was very important,” Panagiotopoulou says, in terms of funding, legitimacy and lobbying both the Greek government and songwriters themselves.
Greece is still a contested market. “Market share is a matter of disagreement,” says EDEM COO George Myzalis. (Panagiotopoulou says Autodia has more than 85% market share, but the respective royalty collection numbers imply a lower number.) Along the way, the technology company Orfium, which has some operations based in Athens, almost entered the market as well, but it ultimately withdrew. (The company operates in other sectors and did not respond to a request for comment.) Right now, venues and broadcasters in Greece need licenses from both Autodia and EDEM, especially if they want to play both the international repertoire that Autodia dominates as well as the Greek compositions that EDEM tends to have.
Some big publishers believe that the growing success of Autodia limits the possibilities for the kind of direct licensing model that they see as more efficient. One idea that at least some of them favored was to establsh EDEM as an organization that would offer more optionality by requiring less exclusive grants of rights – and a model for what they believe could be a more efficient future for the publishing business. As Autodia grows, that is becoming less likely – which some publishers see as a wasted opoortunity and other societies and some other publishers and songwriters see as a win for the current structure, which for all of its complexity offers more of a balance of power between big players and small ones.
The only things most executives seem to agree on is that the situation in Greece is far better than it was under AEPI and that it is getting better, even if it’s not where it should be. “AEPI was a disaster,” says Peermusic European president Nigel Elderton. “Autodia have their act together and they’re paying royalties through and they’re starting to grow.”
At a time when the traditional collecting society model is being challenged by direct licensing and a growing number of for-profit royalty organizations, both the other societies that supported Autodia and the publishers that favored another model agree that the implications of the society’s success go beyond Greece. Now that CISAC has showed it can help turn around a society in a market that’s perceived to be dysfunctional, it could potentially do so again.
“This was 10 times harder than I could have imagined,” Oron says. “But we’ve proven to ourselves that we can do it. Whether we can do it in other countries depends, but we have proof that we can do it.”
The European Union slapped Meta with a record $1.3 billion privacy fine Monday and ordered it to stop transferring users personal information across the Atlantic by October, the latest salvo in a decadelong case sparked by U.S. cybersnooping fears.
The penalty of 1.2 billion euros is the biggest since the EU’s strict data privacy regime took effect five years ago, surpassing Amazon’s 746 million euro fine in 2021 for data protection violations.
Meta, which had previously warned that services for its users in Europe could be cut off, vowed to appeal and ask courts to immediately put the decision on hold.
The company said “there is no immediate disruption to Facebook in Europe.” The decision applies to user data like names, email and IP addresses, messages, viewing history, geolocation data and other information that Meta — and other tech giants like Google — use for targeted online ads.
“This decision is flawed, unjustified and sets a dangerous precedent for the countless other companies transferring data between the EU and U.S.,” Nick Clegg, Meta’s president of global affairs, and chief legal officer Jennifer Newstead said in a statement.
It’s yet another twist in a legal battle that began in 2013 when Austrian lawyer and privacy activist Max Schrems filed a complaint about Facebook’s handling of his data following former National Security Agency contractor Edward Snowden’s revelations of electronic surveillance by U.S. security agencies. That included the disclosure that Facebook gave the agencies access to the personal data of Europeans.
The saga has highlighted the clash between Washington and Brussels over the differences between Europe’s strict view on data privacy and the comparatively lax regime in the U.S., which lacks a federal privacy law. The EU has been a global leader in reining in the power of Big Tech with a series of regulations forcing them police their platforms more strictly and protect users’ personal information.
An agreement covering EU-U.S. data transfers known as the Privacy Shield was struck down in 2020 by the EU’s top court, which said it didn’t do enough to protect residents from the U.S. government’s electronic prying. Monday’s decision confirmed that another tool to govern data transfers — stock legal contracts — was also invalid.
Brussels and Washington signed a deal last year on a reworked Privacy Shield that Meta could use, but the pact is awaiting a decision from European officials on whether it adequately protects data privacy.
EU institutions have been reviewing the agreement, and the bloc’s lawmakers this month called for improvements, saying the safeguards aren’t strong enough.
The Ireland’s Data Protection Commission handed down the fine as Meta’s lead privacy regulator in the 27-nation bloc because the Silicon Valley tech giant’s European headquarters is based in Dublin.
The Irish watchdog said it gave Meta five months to stop sending European user data to the U.S. and six months to bring its data operations into compliance “by ceasing the unlawful processing, including storage, in the U.S.” of European users’ personal data transferred in violation of the bloc’s privacy rules.
If the new transatlantic privacy agreement takes effect before these deadlines, “our services can continue as they do today without any disruption or impact on users,” Meta said.
Schrems predicted that Meta has “no real chance” of getting the decision materially overturned. And a new privacy pact might not mean the end of Meta’s troubles, because there’s a good chance it could be tossed out by the EU’s top court, he said.
“Meta plans to rely on the new deal for transfers going forward, but this is likely not a permanent fix,” Schrems said in a statement. “Unless U.S. surveillance laws gets fixed, Meta will likely have to keep EU data in the EU.”
Meta warned in its latest earnings report that without a legal basis for data transfers, it will be forced to stop offering its products and services in Europe, “which would materially and adversely affect our business, financial condition, and results of operations.”
The social media company might have to carry out a costly and complex revamp of its operations if it’s forced to stop shipping user data across the Atlantic. Meta has a fleet of 21 data centers, according to its website, but 17 of them are in the United States. Three others are in the European nations of Denmark, Ireland and Sweden. Another is in Singapore.
Other social media giants are facing pressure over their data practices. TikTok has tried to soothe Western fears about the Chinese-owned short video sharing app’s potential cybersecurity risks with a $1.5 billion project to store U.S. user data on Oracle servers.