Facebook has been experiencing a difficult streak in recent years. Since the 2018 Cambridge Analytica scandal revealed the British company’s unauthorized collection of personal data on millions of American Facebook users for targeted political advertising from presidential campaigns, Mark Zuckerberg’s crowning achievement has found itself acquiring an increasingly negative perception in popular culture.
Despite data collection of this kind having been widespread and even continuing after the scandal in less blatant forms, public attention began to expose the damaging effects of the Facebook experience. Advertisements in Facebook’s business model and its negative impact on individuals’ privacy and psychological health soon reached mainstream attention as waves of people began leaving the platform and deleting their accounts.
Photo Courtesy: European Union
Amidst these negative headlines though, Facebook continued to prosper economically. In 2021, Zuckerberg made the controversial decision to rebrand Facebook as “Meta” in an effort to not only orient the company towards the singularity-like vision of the “metaverse,” but also potentially shed an untrustworthy reputation by changing its name. Despite these efforts, Facebook/Meta still seems far from escaping public controversy.
In early February, Meta faced its greatest single-day drop in market value and one of the largest in history: around $230 billion in value was wiped away, which is larger than the entire value of the fast food company McDonald’s. This massive dip comes as the company breaks one more personal record, reporting a loss in its daily active users for the first time.
While only less than a million people in total are reported to have stopped using Facebook daily, from 1.930 billion to 1.929 billion, loss of confidence in Meta goes far beyond the company’s apparent stagnation. Challenges from Apple in its new privacy policies, which identify tracking like the kind used by Facebook and prompt the user whether to block it or not, may negatively impact total Meta revenue by around $10 billion this year.
Meta has also cited ongoing macroeconomic issues such as supply-chain hiccups and rising inflation. However, investors and non-investors alike are aware of the incredible competition posted by TikTok to Meta’s business model which Mark Zuckerberg himself acknowledged in his most recent company earnings call.
Particularly unfavorable developments for Meta in the recent past do not end here. European Union officials recently directed their attention to some questionable comments made in Meta’s latest annual report to the US Securities and Exchange Commission (SEC). In this detailed report, the company expressed doubts about its ability to continue operating within Europe due to the EU’s annulment of the Privacy Shield last year, an EU-US data sharing policy. The annulment comes as EU regulators have lost confidence in the US’s ability to comply with the Union’s strict data privacy protections, mounting concerns for technology firms abroad that must make the expenses necessary to establish EU-based hosting.
While TikTok and Microsoft have since announced adjustment plans in response to EU changes, Meta seemed more stubborn in its annual report. In response, German economic minister Robert Habeck remarked in a recent meeting,“After I was hacked, I have lived without Facebook and Twitter for four years and life has been fantastic.”
Bruno Le, the French Finance Minister, stated supportingly that he “can confirm that life would be very good without Facebook and that we would live very well without Facebook.” Unsurprisingly, the anti-Meta comments expressed by EU officials led to a rapid response from the company, which affirmed its commitment to continue operations in the union.
An official response by Meta, which aimed to challenge the sovereignty of the European Union, quickly led to a pivot in its own posture under the reality of European indifference. If the company seeks to remain afloat while facing mounting challenges, Meta will not only need to formally comply with EU expectations, but also garner as much acceptance as it can get on a global-scale.