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Meta Platforms (META) Risks Daily Fine Over Privacy Breaches
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Meta Platforms (META - Free Report) is expected to face a daily fine of nearly $100K for violating user privacy in Norway. The ban shall start on August 4 and last for three months or until Meta complies with the law.
Norway's data protection authority has banned Meta from using behavioral advertising, which profiles users based on their personal data, without their consent. However, the ban will not affect the availability of Facebook or Instagram in Norway, but aims to protect the rights of the users.
Meta said it will review the regulator’s decision and is working with its lead regulator the Irish Data Protection Commission, in the EU, to comply with its decision from December.
Meta has faced several privacy challenges in the EU, including a record $1.3 billion fine and an order to stop transferring user data across the Atlantic. Its new app, Threads, has also been delayed in the EU due to privacy concerns.
Earlier this month, Meta lost a legal battle in the European Union’s highest court over a German antitrust decision. The ruling restricted Meta from exploiting its dominance in social media by forcing users to share data through its services and third-party websites.
Meta Faces Stiff Competition in the Ad Space
Meta’s prospects in the ad business is unappealing due to stricter privacy regulations and stiff competition. The recent ban by the authorities can lead to regulating its ad business in Norway, thereby inching towards a wider ban across the European continent.
On a user geography basis, ad revenue growth in Europe dropped 1% in the first quarter of 2023. Foreign currency remained a headwind to advertising revenue growth in all international regions.
Intense competition for ad dollar has been a major concern for Meta. It faces stiff competition from other social media players like Alphabet (GOOGL - Free Report) , Amazon (AMZN - Free Report) , and Snap (SNAP - Free Report) .
In the ad space, Alphabet’s Google continues to have a significant competitive edge, owing to its scale and diversified product offerings. Strength in Amazon’s online advertising business has contributed to the company in recent times.
Snap’s Snapchat offer tough competition as far as user growth is concerned. The company has made considerable progress in diversifying revenues with Snapchat+ and sponsored AR advertising.
Meta’s Performance to Aid Prospects
The Zacks Internet Software market in the United States is expected to perform well in the rest of 2023, driven by strong demand for cloud-based, AI-enabled and data-driven software solutions. The adoption of cloud-native and platform, continuous technological innovations, emergence of metaverse and increased spending have been major headwinds.
Shares of Meta have gained 158.1% year to date compared with the Zacks Internet – SoftwareIndustry’s 56.8% increase in the same time frame. The uptick was primarily due to strong product pipeline, increased user engagement and constant innovation.
Earlier this month, Meta further expanded its portfolio with the new Threads app. Since launch, Threads have gained an estimated 114 million users and crossed 100 million within five days.
Meta Platforms’ generative AI tools are expected to bolster the advertising market. Significant investments and updates in Facebook, Instagram and WhatsApp is expected to drive its user base in the near term.
The Zacks Consensus Estimate for Meta Platforms' second-quarter 2023 revenues has been pegged at $30.85 billion indicating a year over year growth of 7.02%. Earnings estimates have increased 0.35% to $2.85 per share in the past 30 days.
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Meta Platforms (META) Risks Daily Fine Over Privacy Breaches
Meta Platforms (META - Free Report) is expected to face a daily fine of nearly $100K for violating user privacy in Norway. The ban shall start on August 4 and last for three months or until Meta complies with the law.
Norway's data protection authority has banned Meta from using behavioral advertising, which profiles users based on their personal data, without their consent. However, the ban will not affect the availability of Facebook or Instagram in Norway, but aims to protect the rights of the users.
Meta said it will review the regulator’s decision and is working with its lead regulator the Irish Data Protection Commission, in the EU, to comply with its decision from December.
Meta has faced several privacy challenges in the EU, including a record $1.3 billion fine and an order to stop transferring user data across the Atlantic. Its new app, Threads, has also been delayed in the EU due to privacy concerns.
Meta Platforms, Inc. Price and Consensus
Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote
Earlier this month, Meta lost a legal battle in the European Union’s highest court over a German antitrust decision. The ruling restricted Meta from exploiting its dominance in social media by forcing users to share data through its services and third-party websites.
Meta Faces Stiff Competition in the Ad Space
Meta’s prospects in the ad business is unappealing due to stricter privacy regulations and stiff competition. The recent ban by the authorities can lead to regulating its ad business in Norway, thereby inching towards a wider ban across the European continent.
On a user geography basis, ad revenue growth in Europe dropped 1% in the first quarter of 2023. Foreign currency remained a headwind to advertising revenue growth in all international regions.
Intense competition for ad dollar has been a major concern for Meta. It faces stiff competition from other social media players like Alphabet (GOOGL - Free Report) , Amazon (AMZN - Free Report) , and Snap (SNAP - Free Report) .
In the ad space, Alphabet’s Google continues to have a significant competitive edge, owing to its scale and diversified product offerings. Strength in Amazon’s online advertising business has contributed to the company in recent times.
Snap’s Snapchat offer tough competition as far as user growth is concerned. The company has made considerable progress in diversifying revenues with Snapchat+ and sponsored AR advertising.
Meta’s Performance to Aid Prospects
The Zacks Internet Software market in the United States is expected to perform well in the rest of 2023, driven by strong demand for cloud-based, AI-enabled and data-driven software solutions. The adoption of cloud-native and platform, continuous technological innovations, emergence of metaverse and increased spending have been major headwinds.
Shares of Meta have gained 158.1% year to date compared with the Zacks Internet – SoftwareIndustry’s 56.8% increase in the same time frame. The uptick was primarily due to strong product pipeline, increased user engagement and constant innovation.
Earlier this month, Meta further expanded its portfolio with the new Threads app. Since launch, Threads have gained an estimated 114 million users and crossed 100 million within five days.
Meta Platforms’ generative AI tools are expected to bolster the advertising market. Significant investments and updates in Facebook, Instagram and WhatsApp is expected to drive its user base in the near term.
This Zacks Rank #2 (Buy) company expects second-quarter 2023 revenues between $29.5 billion and $32 billion. Foreign currency headwinds are expected to be less than 1% year-over-year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Meta Platforms' second-quarter 2023 revenues has been pegged at $30.85 billion indicating a year over year growth of 7.02%. Earnings estimates have increased 0.35% to $2.85 per share in the past 30 days.