According to reports, Facebook parent company Meta issued a warning today that in terms of data protection, it is likely to be subject to huge fines by the European Union in the future. Today, the company said in its Q1 2022 report that the European Commission is investigating the company under the General Data Protection Regulation (GDPR). When the investigation is over, Meta is likely to be hit with a hefty fine.
“We believe there is a reasonable possibility that the additional losses associated with these matters will be significant,” Meta said.
The GDPR, which came into effect in 2018, empowers EU regulators to fine violators up to 4% of their annual sales. The regulation also gives regulators the power to monitor breaches and investigate complaints.
The Irish Data Protection Commission (DPC) is Meta’s primary supervisory authority in the European Union, as Meta’s European headquarters are in Ireland. By the end of 2020, the DPC had launched 14 major investigations into Meta and its WhatsApp and Instagram subsidiaries.
The company said the DPC could issue a key decision on the use of so-called “standard contractual terms” as early as the second half of 2022.
Gizchina News of the week
Meta shares surge more than 18% as revenue growth slows down
Facebook parent company Meta announced its first-quarter financial report today. The report reveals the slowest revenue growth since its listing. Still, Meta shares rose as Meta reported better-than-expected first-quarter profits in the face of multiple headwinds.
In the first quarter of this year, Meta’s profit was $7.5 billion, down 21 per cent from a year earlier. However, it is still above the $7.1 billion expectation. Meta’s first-quarter revenue of $27.9 billion is up just 7% year-over-year, missing analysts’ expectations. The Russian-Ukrainian conflict, growing market competition and Apple’s tweaks to privacy settings have weighed on social media platforms such as Facebook.
The company said it expects the negative trend to continue in the second quarter. This is due to the continued weakness in the company’s performance as a result of the situation in Russia/Ukraine. The company expects second-quarter revenue of $28 billion to $30 billion, compared with analysts’ expectations of more than $30 billion.
Still, surprisingly strong profits and forecasts of lower costs this year appeared to cheer investors up in after-hours trading. Meta shares rose more than 18 per cent in after-hours U.S. stock market trading on Wednesday. The company expects spending for the full year to be $87 billion to $92 billion. This is down from an earlier forecast of $90 billion to $95 billion. Jefferies analyst Brent Thill noted that, overall, Meta’s performance was better than the worst-case scenario that Wall Street feared.
