Meta Platforms Inc (NASDAQ: META) is in the red on Monday after the European Commission took an issue with Facebook Marketplace.
Meta stock down on possibility of a hefty fine
According to the region’s executive arm, Meta Platforms is abusing its supremacy in online classifieds in ways that violates the antitrust regulations of the European Union.
Meta ties its online classified ads service with Facebook, which gives Facebook Marketplace a substantial distribution advantage that competitors can’t match. Second, it unilaterally imposes unfair trading conditions on competing services which advertise on Facebook or Instagram.
If substantiated with sufficient evidence, the tech behemoth could face up to $11.8 billion worth of penalty. That’s about 10% of its global yearly revenue.
Meta Platforms has denied these allegations the regulator made in its statement of objections. Nonetheless, they added to the long list of headwinds that have the Meta stock down about 65% for the year.
But will it remain the same next year? Not necessarily – said Ranjan Roy (Editor at Margins) this afternoon on CNBC’s “TechCheck”.
Roy explains what 2023 might look like for Meta
One of the primary reasons why Meta Platforms came crashing down this year is because it continues to overspend on the “metaverse”. According to Roy, though, that could change in 2023.
I think Zuckerberg will deprioritise his metaverse dreams in 2023. Today, their CTO (Andrew Bosworth) posted Meta will spend 18% to 20% [on it]. It’s the first time you’re seeing an admission that there’s a limit to how much they’ll spend.
Even part of that spending, he added, will go to artificial intelligence-driven content discovery that actually benefits the company’s core business. Roy expects the shift also because it will position the multinational to capitalise on the Twitter fallout.
I don’t think Zuckerberg won’t take the opportunity because no longer is Facebook the bad guys. Suddenly, every advertiser who’s had concern around content moderation see that it can be a lot worse.
He’s convinced that it will be a meaningful catalyst for the Meta stock if CEO Mark Zuckerberg so much as hints a refocus on the core business.
The post Meta Platforms could face a big penalty appeared first on Invezz.