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Facebook parent Meta faces setback in challenge to German antitrust order

Yahoo Finance’s Dan Howley joins the Live show to discuss Meta’s EU setback against German antitrust and privacy rules as well as reports that Mark Zuckerberg lost $70 billion in net worth this year.

Video Transcript

JULIE HYMAN: Facebook's parent company Meta faced a setback overseas after the European Union's top court ruled that Germany's Protection Association could bring a legal challenge against the company over data privacy. Yahoo Finance's Dan Howley has the details on this one for us. I mean, Europe has been tougher on big tech far and away. So this is the latest example of that.

DAN HOWLEY: Yeah, I mean, they're doing stuff. And we're just like, I don't know, guys. We'll figure something out at some point maybe. Who knows? But this has to do with an antitrust challenge that Germany has brought basically in the course of this antitrust fight. They had said-- Facebook had said, look, Germany is trying to bring not just antitrust issues to the front here, but privacy issues as well.

And so Meta, Facebook, said that's not Germany's purview. That's up to Ireland. They are where our data privacy issues lie. That's supposed to be the organization that takes care of that. But now the top court put down this kind of opinion. It's not the law of the land. It's just an opinion at this point. But it could lead to the ability for Germany to continue forward with antitrust, while including the idea of consumer privacy within that.

So really, Meta was trying to bank on this as a means to get out of this issue with Germany as far as antitrust goes. But it doesn't look like that's going to happen because past precedent is that when these kinds of opinions come down, they end up becoming the law of the land eventually. So that will be the way that it likely goes for Facebook.

And I think-- or Meta. And I think in addition to that, we obviously have here, the FTC going after them as far as antitrust goes. And basically, any organization around the world that deals with competitiveness is likely looking at Facebook, if-- Meta, if they aren't already.

BRAD SMITH: OK, so what kind of revenue implications might this have for Facebook? And I guess, in turn, some wealth implications for Mark Zuckerberg, too, who's seen his wealth decline over the course of the past several months, at least with the decline in Facebook's stock valuation as well.

DAN HOWLEY: Yeah, I mean, look, Germany kind of wants them to change how they do business entirely, right? So that-- I mean, that's unlikely to happen, right? I think for Meta, they collect people's data. They use that data to then sell ads. They don't sell your data. You know, it's kind of-- they don't, but it's kind of hazy, the kind of correlation there between whether or not they do.

But I think Europe is much stricter on whether or not user data can be sold, how it can be sold, how it can be collected. And, you know, I think that eventually, Europe's just going to come down harder still on Meta and companies that do the same thing. And I think for Zuckerberg, you know, he's been hemorrhaging money, right? His value, at least, as a result of Meta's stock drop. You know, I think last time I checked, they were down 50% year to date. So not doing too hot.

And a lot of this has to do with, obviously, issues in the ad sales market. We've seen that with other companies like Snap. But then there's Apple's privacy changes. That's been a big problem for them as well. Same thing with Snap. Google not so much because they can glean data from users using their own service, Google search, which is arguably better because that's what people are honestly interested in. And then there's the pivot to the Metaverse that's really draining some of their funds.

So, for Zuckerberg, I think this is just-- Facebook's not going to go anywhere. Meta's not going to go anywhere. But for now, it looks like they're kind of on their back foot and don't know how to respond.

BRAD SMITH: It might not go anywhere, but maybe the other issue, too, is with some of the new platforms that the next generation or the cohort of spenders that would be spending a lot of time and perhaps even money as well through some of the social media platforms and apps-- BeReal, that seems to be taking off even more, and then of course, ByteDance's own TikTok-- they're really vying for that next generation and that cohort, particularly, of time consumption on apps.

DAN HOWLEY: Well, it's interesting because it's not just the sharing, right? There was an article-- I think Mashable had done an article and "The New York Times" did an article basically saying how TikTok is the new search engine because younger users use it to find things like reviews on products or ideas for home renovation or cooking. And my wife just made a damn good Greek salad based on a recipe that she found on TikTok. And I'm just throwing a shoutout to my wife.

But I think that's something that a lot more users are getting used to. And so that makes TikTok even more useful than just sitting there and scrolling while you're waiting for your bus or something. Now it's the ability to look up individual things, look up how can I change my oil in my car, and that's something you used to use Google for.

So I do think that the usefulness of TikTok is becoming greater, whereas when you look at something like Meta, Instagram, nobody wants Instagram to be TikTok. They damn sure want to try to be TikTok. I just don't think that's going to happen. And that's where their big moneymaker is right now. So it really is kind of they're on their back foot. And how they're going to continue to grow, or at least, try to monetize better, still remains to be seen.