San Francisco Mark Zuckerberg has probably had the most difficult year of his career so far. His Facebook group, which recently traded under the name Meta Platforms, was under attack like never before.
The advertising business is paralyzed because Apple’s data protection rules make it difficult to display targeted advertising. The user base is aging noticeably because younger users often prefer the platforms of the competition.
Most dangerous for the group, however, is the current raging battle for reputation: In recent months, high-ranking managers have had to justify the conduct of their company several times in hearings before the US Congress – and gave a less than convincing picture.
Adam Mosseri was last hit. A few days ago, the Instagram boss suggested establishing a kind of self-regulation through the tech industry, in which users should be better protected against harmful influences through common standards. The hearing committee, consisting of several US senators, brusquely threw off the idea.
“There will be no self-regulation,” announced Republican Senator Marsha Blackburn from Tennessee. “It will be the US Congress that sets these standards.” It has happened too often in the past that the tech industry has promised change that then failed to materialize.
The year 2022 should therefore be a turning point for Meta with its Facebook, WhatsApp and Instagram platforms, but also for the entire industry. Because the expected regulatory projects are aimed at the core business of the digital corporations and overshadow attempts to score points with new technologies such as the Metaverse.
In a hearing before the US Congress, the Instagram boss came under pressure.
(Photo: TJ KIRKPATRICK / The New York Ti)
The focus of politics is on algorithms – and thus control over which content users are given preference. The corporations come under pressure from both sides.
On the one hand, Republican states like Texas and Florida have introduced laws that are supposed to make it more difficult for operators to block users for political content. This should not least be aimed at the case of Donald Trump, whose Facebook and Twitter accounts were deleted from the platforms after several false reports from the then US President.
Senators draw parallels with the tobacco industry
On the other hand, the US Congress wants to regulate even more strictly what content users can see in the networks. Because a core reproach in the hearings was: Meta does too little to protect its users from false information, radicalization and addictive behavior. This is especially a shame for children and adolescents, whose judgment is not yet so well developed.
The senators have already drawn a parallel several times with the tobacco industry, which, despite better knowledge of the health risks of smoking, had long resisted stricter rules. Democrat Richard Blumenthal said Facebook and Big Tech were going through the same thing as the big tobacco companies once were. “It’s a moment of reckoning.”
Because Meta is said to have known exactly about the problems with its own products for a long time. Internal documents that the whistleblower and former Facebook manager Frances Haugen made available to several media and politicians around the world paint the image of a company for which its own profit is paramount.
Facebook threatens the fate of the tobacco industry.
(Photo: imago images / UPI Photo)
For example, technical adjustments that were introduced to protect users are said to have been withdrawn if they had a negative impact on the figures. The management is also said to have known that many young girls suffer from severe pressure because of the ideal of beauty propagated on Instagram, which is reflected in mental illness.
In its battle of retreat, the group cites its own studies, which also indicate that the platform helps many young people to deal with problems such as depression and loneliness. Instagram also promotes diversity.
“The definition of beauty in the US was very limited and unrealistic,” said Instagram boss Mosseri in the hearing. “Social media like Instagram have helped important movements for positive body image emerge and grow.”
Access to young users at risk
Nevertheless, the group has paused work on its Instagram Kids platform for the time being. The offer should be aimed specifically at under 13-year-olds who have not yet been allowed to register on Instagram. However, the company has announced that it will continue to work on the planned control functions for parents, which are now to be introduced on the mother platform Instagram instead.
This case will also be a crucial milestone for the coming year. Because it shows how public pressure on the group can lead to important strategic projects being weakened or not even started. Access to younger users is central to the platforms in order to prevent competitors from establishing themselves too strongly.
A cautionary example of this is the Chinese rival Tiktok, which belongs to the tech group Bytedance and is currently experiencing high growth rates worldwide, especially among teenagers. The meta-daughters Facebook and Instagram suffer from the biggest problems in this age group, according to internal documents cited in the US media.
The Chinese company Facebook is overtaking the young target group.
(Photo: Reuters)
It is not without reason that the meta share has been traded with some caution since the stock market revelations began. The price has fallen by more than eight percent since the beginning of September – although the stock market is currently still evaluating the outlook as rather positive. Almost all analysts recommend the share as a buy.
Metaverse threatens to be overshadowed
This probably has to do with the strategic long-term vision that Mark Zuckerberg proclaimed with the Metaverse: a kind of virtual extension of reality that can be entered with devices such as VR glasses and position meters. The group plans to invest more than ten billion US dollars annually in the development.
Analyst Douglas Anmuth from JP Morgan writes in a recent study that the Metaverse does not yet exist, but that the first building blocks are emerging. “The early developers of offers include game producers, but also virtual fitness, the world of work and education are conceivable fields for new social worlds.”
According to the unanimous opinion of the industry, it could well be another ten years before the plans become reality. And so the major project threatens to be overshadowed by the public debate, at least in the short term. Because the US Congress has already indicated that new whistleblowers may report in addition to Frances Haugen.
“We’re not done here,” said committee chairman Blumenthal after the latest hearing at a press conference. “I assume that we will potentially hear from other former Facebook employees.”
More: Facebook group: 50,000 users targeted by surveillance companies