Meta Platforms shares tumble on latest regulatory woe

(Alliance News) - Meta Platforms Inc shares slumped on Tuesday as investors were given a grim reminder of the regulatory scrutiny faced by the Facebook and Instagram owner.

The stock tumbled 6.3% to USD114.59 in New York on Tuesday afternoon, on track for its worst day since late October.

The company is expected to be hit with another chunky European fine due to the treatment of personal data. The European Data Protection Supervisor said the ruling concerns the use of data for targeted advertising, AFP reported.

It is not the first time Meta has come under European cross-hairs on data. In September, it levelled a EUR405 million fine over the way in which it handled teenagers' personal data. The penalty was imposed by Ireland's data protection watchdog.

"Reports that EU officials are about to crackdown on Meta's targeted advertising practices pulled the stock price down by more than 6%. Getting the right ads to the right people is a huge selling tool for the platform, particularly at a time when advertisers are cutting back on their spend. The Wall Street Journal's report that there will be a crackdown on Meta's practice of getting users to opt in to receiving targeted ads will cast further doubt on the company's future at a time many investors are already asking questions about where it goes from here," AJ Bell analyst Danni Hewson commented.

In addition, a US oversight panel said Meta has put business over human rights when giving special treatment to rule-breaking posts by politicians, celebrities and other high-profile users, AFP reported.

A year-long probe by an independent panel created by the tech firm ended with it pleading for an overhaul of a system known as "cross-check". The system shields elite users from Facebook's content rules.

"While Meta told the board that cross-check aims to advance Meta's human rights commitments, we found that the program appears more directly structured to satisfy business concerns," the panel said in a report.

"By providing extra protection to certain users selected largely according to business interests, cross-check allows content which would otherwise be removed quickly to remain up for a longer period, potentially causing harm."

By Eric Cunha, Alliance News news editor

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