Meta fine includes a meta lesson for every business
It would be fair to say that 2022 has not been a great year for Facebook, or Meta Networks as it is now known. Roundly mocked for the Nintendo 64-style graphics on its metaverse demo while Apple’s new privacy policies cut into its profit-making abilities, it is hard to remember the joy with which users once responded to the platform. The company’s share price has also taken a battering, dropping over 64% this year alone, far more than most tech companies have suffered even in 2022’s down market.
Almost every move the company makes seems to alienate more users and the old strategies to combat churn appear to be failing. While younger users have Facebook accounts under sufferance, if at all, Instagram remained popular with this cohort. Until Meta decided to rejig it to compete with TikTok, that is, in the process loading it up with advertisements and pushing ‘engagement’ with sponsored ‘influencer’ content in the process.
The latest blow to Meta’s ambitions is a €265 million fine from the Data Protection Commissioner (DPC).
Once decried as toothless by its critics, Ireland’s office of the DPC is beginning to reveal its incisors. It makes sense. Following the writing into law of the EU’s General Data Protection Regulation (GDPR) in 2018, the DPC not only had to ramp up operations, it was only fair to give businesses, particularly smaller ones, some time to comply. Four years down the line, however, businesses, particularly the tech behemoths, have had all the time they need, and few of us will be unhappy to see Silicon Valley get its wings clipped.
In Facebook’s case, the fine relates to a 2019 data breach that saw data relating to 50 million users leaked. Nor, indeed, is this Meta’s first fine. Last year, the DPC fined WhatsApp, also owned by the company, €225 million for violating rules on sharing people’s data
It would be foolhardy to declare Meta a beaten docket. Despite the headlines, the company remains profitable. It also has a large user base that will not drop off overnight, even if it is subject to metaphorical coastal erosion over time. On that basis alone, Meta is not going anywhere. Moreover, it may yet pull a rabbit out of the hat, whether based on the metaverse or otherwise.
It is, however, looking like a perfect storm for social media.
The success of social media is based on the very human need to connect, something that will never change as we are fundamentally social beings. However, the social media companies have overplayed their hand: advertising overload, egregious data harvesting and obvious attempts to stoke psychological and neurological responses hauled in great gobs of cash for a decade, but the law of diminishing returns applies. More and more of us who were happy to sip from a babbling brook now find social media akin to attempting to drink from a firehose.
Facebook is hardly alone, either. Twitter, never truly important as tribune but to journalists, policy wonks and sundry hawkers and propagandists, has become deeply unstable under the leadership of Elon Musk and, in truth, was already, at best, stagnant before he took over.
Add to this increased regulatory scrutiny – the DPC currently has some 40 inquiries open into tech giants, including thirteen involving Meta alone – and the phenomenon we used to call social networking appears to have lost a lot of its lustre.
There is also a wider lesson to be learned, though, and it applies to all businesses, not just the Californian info harvesters: get your data in order.
After a decade of businesses cheering on data as ‘the new oil’, stricter regulation is to be welcomed. Businesses would do well to consider what data they collect, process and store, and perhaps do less of it, lest they become the Exxon Valdez of personal information the next time a poorly configured server yields up its secrets.
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