Facebook Inc has warned Europe that if it doesn’t do away with “poorly designed regulation,” it risks being left behind in the global digital race. Speaking to the Financial Times on the sidelines of the World Economic Forum in Davos, Facebook COO Sheryl Sandberg urged countries in the region to avoid impeding “progress” by adopting laws that block tech innovations.
“Well-designed regulation can unlock new opportunities…and help industries to scale,” she said. “Poorly designed regulation can do the opposite.”
Sandberg also allayed fears that new tech will disrupt industries and destroy livelihoods of millions. Instead, she argued that such “innovation can power economic growth if we create the right climate for it to flourish”.
Facebook is Fighting a ‘Battle of Perception’
Sandberg’s comments come at a time when a number of Silicon Valley firms are facing stiff resistance in Europe. Sparked by growing concern of internet surveillance and business dominance, authorities there have made concerted efforts to rein in leading U.S. tech firms. Several U.S. leaders, including President Obama, have termed the efforts as “tech protectionism.”
Sheryl Sandberg is also expected to raise the issue of a new Trans Atlantic data-sharing agreement at Davos. The European Court of Justice had invalidated the current U.S.- EU pact in December. The pact allowed U.S. firms to transfer personal info of European citizens.
The ECJ decision came after Austrian law student, Max Schrems, lodged a complaint against Facebook Inc . The court accepted his plea that letting too much data flow to the U.S. had exposed Europeans to the risk of spying.
U.S. and EU policy makers are negotiating a new pact. But talks remain deadlocked over Europeans concerns on how data will be used. The ongoing uncertainty has left U.S. tech firms fretting over whether they can legally handle personal data.
Besides Sandberg, Microsoft CEO Satya Nadella and Uber chief Travis Kalanick will also be in Davos this week. Tech execs have privately told FT that they are bracing themselves for a hostile reception from leaders in Europe.
Facebook Q4 Earnings Preview
Facebook Inc is scheduled to report fourth quarter results on January 27. The consensus estimate is for non-GAAP EPS of $0.68. That will mark a 26% year-over-year growth. On the revenue front, analysts are expecting $5.4 billion for the quarter. Y-o-y, that represents an almost 40% increase. Analysts have however warned that the firm may not be able to sustain its high monthly active user growth rate in Q4.
Shares of Facebook Inc closed Tuesday at $95.26. The stock is down 7% year to date.