Meta Platforms Fined €405 million for Not Having Protected Children’s Data on Instagram

Meta Platforms NASDAQ:META

Ireland’s data regulators have fined Meta Platforms’ (NASDAQ:META) Instagram €405 million for failing to comply with the General Data Protection Regulation (GDPR) of the European Union (EU) and failing to safeguard children’s data.

Meta Platforms Gets One of the Largest Fines Under GDPR

Following a two-year inquiry, Instagram was fined by the Irish data protection authorities. The investigation was conducted in response to complaints about Instagram’s default settings for all users, including those under the age of 18, which are public settings. The complaint contained other allegations that details about kids using business accounts on the platform were made public.

The present sanction, the third largest that the Irish authority has given to Meta Platforms, is one of the largest under GDPR. Following an inquiry into a data breach on Facebook, the Irish regulator fined Meta Platforms €17 million in March. It received a €225 million penalties last year for breaking WhatsApp’s privacy policies. The company has complied with the Facebook judgment, but it is contesting the ruling on WhatsApp.

The Australian competition watchdog filed similar legal actions for publishing phoney celebrity adverts on its social media site.

According to Independent, the Australian Competition & Consumer Commission (ACCC) claimed that Meta Platforms had done nothing to stop con artists from spreading false adverts with famous people supporting dubious goods.
Legal Issues Are Negatively Impacting Meta Platforms’ Shares

Legal issues for Meta Platforms are getting worse and worse, which is having a negative effect on share price movement. The Russian government launched one of the biggest legal threats the company had to deal with. Russian prosecutors requested that Meta be designated as an extremist group in court. Since March 11th, Instagram is prohibited in the nation.

The Russia-Ukraine war and other geopolitical concerns decreased Meta Platforms’ monthly active users across its family of platforms, including Facebook and Instagram. In addition, escalating inflation reduced the value of digital advertising. The current state of the global economic crisis is worse than it was a quarter ago. In turn, this damaged investors’ perceptions of businesses depending on advertising revenue.

Ad targeting-related challenges brought on by Apple’s (NASDAQ:AAPL) iOS modifications are another factor affecting Meta Platforms’ ad revenue growth.

Ad targeting has become more challenging as a result of Apple’s iOS innovations, raising the cost of delivering results. It is very difficult to measure these results, and Meta Platforms anticipates that they will negatively impact advertising growth in the third quarter and into 2022.

Shares of Meta Platforms are down more than 52% year to date.

Meta Platforms Will Introduce Paid Features on Facebook, Instagram, WhatsApp

A business representative announced last Wednesday that Meta was launching a new group with the goal of developing features and goods that users would be able to buy for its Facebook, Instagram, and WhatsApp platforms.

Any new products will complement our current advertising business, the official told Reuters in an email.

By making the change, Meta Platforms would follow in the footsteps of businesses like Snap Inc (NASDAQ:SNAP) and Twitter Inc (NASDAQ:TWTR), which have introduced paid tiers to unlock extra services.

According to John Hegeman, Meta’s head of ads and business products, the company has no intentions to charge customers to turn off ads and is committed to expanding the ads business. 

According to Hegeman, Meta anticipates paid features becoming a more significant component of its company over time.

In July, Meta Platforms saw its first-ever quarterly revenue decline as a result of slumping ad sales and competition challenges.

Featured Image-  Megapixl @Waingro

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About the author: Stephanie Bedard-Chateauneuf has over four years of experience writing financial content for various websites. Over the years, Stephanie has covered various industries, with a primary focus on consumer stocks, cannabis stocks, tech stocks, and personal finance. This stock lover likes to invest for the long-term. Stephanie has an MBA in finance.