Meta, the parent company of Facebook, WhatsApp and Instagram, has had another bad week, with news breaking on Monday that it has been hit with a huge fine from Irish regulators for failing to protect user data.
The executives and middle management at Facebook HQ must be reeling, even if Instagram users are decidedly not. See what I did there? It’s a pun. On Reels. It’s an Instagram thing ... oh, never mind.
Earlier in November Meta announced its intent to cut 11,000 jobs worldwide as the advertising revenues across the company’s various platforms took body blows. In an open letter to staff in early November, CEO Mark Zuckerberg wrote: “I’ve decided to reduce the size of our team by about 13% ... We are also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through Q1.”
Those steps include stopping the development of two smartwatches and Portal video-chat devices, according to Reuters and The Verge. Portal was already on shaky ground. In June 2022 leaks said the target market had shifted from consumer to business, suggesting it was seeking a smaller likely user base for the product, and one that was more price-tolerant too.
Meta’s “EMG wristband” technology — an electromyography input device for augmented reality (AR) environments — was expected to be bundled into watches, but is likely to be a stand-alone project along with the AR headset “Project Nazare” — both of which are expected to come to market in 2026 only.
Now, under the auspices of the General Data Protection Regulation (GDPR), the Irish Data Protection Commission — which Bloomberg calls “the lead watchdog for ... Silicon Valley’s biggest tech firms that have set up an EU base in the country” — has levied a fine, reprimand and order to comply with safeguards within a specified time frame.
Meta has received multiple fines in Europe for various regulation failures since 2020, which commentators see as a signal of how seriously Europe views its role in the regulation of data privacy and digital company behaviour. The fine itself is serious too, a whopping €265m. That is R4,663,487,248.85 (at the time of writing), about what it would cost to install enough solar for your house, plus a fire pool in readiness for the coming climate apocalypse.
I jest, but the breach this fine relates to is no laughing matter: the offence is the failure to protect about 500-million plus users from a third-party data scraping incident in April 2021. The scraped data included a glut of personal information such as birthdays, emails, and phone numbers, among other things. That’s just the kind of stuff that makes a little identity theft or bank fraud all the easier. This trove of information — relating to half a billion or so people — was then published on an online forum.
Speaking back in 2021, a spokesperson for then Facebook characterised the scrape as consisting of “old data”, and it is just this kind of minimising that particularly cheesed off the fine-calculating regulators.
Irish data protection commissioner Helen Dixon said the size of the fine was informed by the size of the data set, as well as by previous scraping incidents, which meant the failures and risks could have been identified and mitigated earlier.
All in all, the fine ranks as the third highest penalty under GDPR to date, after the €746m fine imposed on Amazon.com by a privacy watchdog in Luxembourg, among others. It must be stated, though, that the imposition of a fine does not equal its inevitable payment. Appeals and talks will follow.
Still, these kinds of successive setbacks are why CNET included Meta in its latest roundup of “annual Tech Turkeys”. Coming in at lesson number three for 2022, CNET writes: “The metaverse hasn’t taken off as expected, and Meta has felt the pain in a real way.” It counts off a lot of the same missteps as above, but adds in this delicious, if petty, dig: “Also, the company’s sales pitch kind of fell flat when, during a keynote demonstration, it presented pre-rendered, motion-captured digital legs as ‘real’ virtually rendered ones in an attempt to suggest the tech is further along than it really is. If you’re going to bring digital legs to a party, they better be legit.”
Jibes aside, it really is time to wonder if the problem isn’t so much the public’s lack of enthusiasm for $1,500 headsets, and more about the disconnection of its chief. Zuckerberg is not just a cofounder of the company but its chair, CEO and controlling shareholder. He says repeatedly in his aforementioned missive — published on the Meta news blog — that he takes responsibility for the miscalculations (read: overinvesting, overhiring) and the adjustment (read: mass layoffs) that result from them.
“Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that,” the post reads.
How, exactly, he’s “taking it” remains to be seen. He is increasingly under pressure to bring on new leadership to work alongside with — at least. The metaverse — and Meta’s investment in it — was supposed to be the answer, but even Zuckerberg says it is only expected to pay (metaphorical and real) dividends towards the end of the decade.
Meanwhile, the platform seems to be struggling to attract youthful users and its middle-aged users — yes, that includes many Millennials — are increasingly disconnecting. They keep their profiles, but never check in. For a model built on engagement, that incentivises platforms to participate in the digital equivalent of ambulance chasing, AKA promoting extreme and polarising content.
I wrote a year or so ago about the company’s annus horribilis, after the “Facebook Files” leaks in late 2021, and with hindsight it looks like I spoke too soon. What’s the Latin for “downward spiral”?
• Thompson Davy, a freelance journalist, is an impactAFRICA fellow and WanaData member.
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