By Jim Harper

Especially when you’re a young, market-oriented policy
analyst, you dream of someone in the business community throwing down their
hammer and saying, “ENOUGH! Enough of the regulations, the meddling, the
paperwork! I will stop providing my products unless I can provide them on MY
terms, serving consumer demand and consumer demand alone!”

It never happens. We can be assured that some kind of
compromise will let Meta continue to offer Facebook and Instagram to European
users, surpassing the current privacy impasse.

The threat to Europe’s social media landscape is this: Ireland’s Data Protection Commission recently informed its counterparts on the continent that it will soon block Meta from sending European user data to the United States. It’s another step in a decades-long tug-of-war between Europe and the US over privacy.

Europe has a heavy-handed regulatory regime that America’s
more freewheeling speech, media, and business environment arguably fails to
respect. An important bone of contention is the US government’s practice of
collecting personal information wholesale for national security purposes.
Despite the disagreements, a series of improvisations has allowed transatlantic
social media and other online services to continue.

The latest improvisation, dubbed “Privacy Shield,” was annulled by a European Court of Justice ruling in 2020. That ruling also made it harder for internet companies to comply with European guidelines using “standard contractual clauses,” which more or less replicate Europe’s rules. The next improvisation is in the offing; European privacy advocates have already lodged their objections in an informative open letter. But right now, push is coming to shove, and Meta says it may not be able to offer its most popular services in Europe.

If Europeans want privacy as much as their regulatory system
provides, none of this would matter and the shutoff of these services would produce
a collective shrug or perhaps a sigh of relief from European internet users.
But Europeans enjoy the online version of arguing about God while chain-smoking
Gitanes as much as Americans like the online version of throwing back longnecks
and riding the mechanical bull. People like to get together, even at a cost to
privacy.

Sometime soon, a compromise will be worked out that allows
social media providers to continue serving Europe, if in some slightly
stultified way.

That businessperson throwing down the hammer? We grow up to learn there are no John Galts jumping from the pages of Atlas Shrugged into our reality. The behavior of businesspeople is not Randian but Friedmanite. They assiduously—obsequiously even—seek profits for their firms, compromising like hell, when necessary, to preserve them.

The other compromising party is the European regulatory
community. They are at the table because they know Europeans value the services
Meta and others provide. Europe’s regulators can see down a road where those
services are cut off. They would suffer repercussions from their body politic,
so they must avoid denying Meta’s services on the continent.

It’s a loss to those of us wishing for a natural experiment.
If either side were to be uncompromising, flatly refusing to bargain, European
social media would essentially stop, and the lessons would quickly be clear. I
think one would be: Europeans are better off trading some privacy for richer
and more numerous online relationships and interactions.

H. L. Mencken said, “Democracy is the theory that the common people know what they want, and deserve to get it good and hard.” In the transatlantic privacy version, regulators know what people want, and Europeans deserve to get it good and hard. Alas, the spirit of compromise will deny us any real drama and preserve the privacy tug-of-war for generations to come. 

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