India operations to get costlier, more complex due to data protection law: Meta

Meta (formerly Facebook) has said in its filings to the US Securities and Exchange Commission (SEC) that their India operations are now going to become costlier and more complex due to the legislation regarding data protection and local storage and processing of data, which is in the pipeline. The company further stated in its filing that the new legislation or regulatory decisions may impact its ability to collect and use information about minors, which would limit its advertising services or offering products and services targeted towards minors.

“In addition, some countries, such as India, are considering or have passed legislation implementing data protection requirements or requiring local storage and processing of data or similar requirements that could increase the cost and complexity of delivering our services. New legislation or regulatory decisions that restrict our ability to collect and use information about minors may also result in limitations on our advertising services or our ability to offer products and services to minors in certain jurisdictions,” Meta’s filing read.

Meta’s recent filing said that the company has been facing investigations and lawsuits in India, Europe and other jurisdictions regarding the August 2016 update to WhatsApp’s terms of service and privacy policy and sharing of certain data with other Meta products and services. These lawsuits also include a pending plea before the Supreme Court of India and government enquiries and lawsuits regarding 2021 update to WhatsApp’s terms of service and privacy policy.

The US-based tech giant further said in its filing, “If we are unable to transfer data between and among countries and regions in which we operate, or if we are restricted from sharing data among our products and services, it could affect our ability to provide our services, the manner in which we provide our services or our ability to target ads, which could adversely affect our financial results.” Meta’s financial results are likely to be impacted by these litigations as legislations in India and Germany have resulted in or will, in future, lead to imposition of fines or penalties for failure to comply with content removal, law emforcement cooperation and disclosure cooperation."

How important is the India market for Meta?

Meta COO Sheryl Sandberg told Business Today in a recent interaction that India is the company’s largest and most important community. She added, “India is one of the places where we wound up doing a lighter version of Facebook many, many years ago because there were people who were connected to the Internet but didn’t have the same Internet connectivity. There’s a lot we’ve learnt in India which we will be able to translate globally.”

She also said that India has a unique creator ecosystem which can help it boost the number of active users for Meta in India. Sandberg also talked about Meta’s partnerships with Reliance Jio, Meesho and Unacademy. She explained, “We are deep in with local companies to build the products that people are going to most use. Our goal is to enable new opportunities for businesses of all sizes, especially the nearly 16 million SMBs across India.”
 
The Meta COO also called the Meta-Jio partnership “one of the most important and deepest partnerships we’ve ever done” as there are two different spectrums of commerce in the country – digital savvy shoppers of online marketplaces, ride shares and food ordering on the one hand and people shopping in kirana stores due to the lack of access to banking systems.

Also read: Meta threatens to shut down Facebook and Instagram in Europe, here's why

Also read: Jio one of Meta’s most important partnerships: Sheryl Sandberg