Meta's $13.4 Billion Fine Heard Around the World! EU: "No AI For You!"

In the midst of Meta plunging -9.14% the past two days, a declining stock price should be the least of big Zuck’s worries right now. Why? Well because according to reports, Meta is staring down the barrel of a potential gut wrenching fine amounting to $13.4 billion. 

(Source: Reuters) 

In short, the EU is not too pleased with Meta tying its classified ads service, Facebook Marketplace, close with its social media platform. Oh and don’t freak out Meta investors, but while $13.4 billion might not seem like a lot compared to Meta’s $1.16 trillion market cap… this fine is set to be the equivalent to 10% of Meta’s 2023 global revenue. So, yeah, that sucks… 

(Source: Life Hacker) 

The argument, according to the EU, is that this Zuck bundle (marketplace + social network) puts competitors at an unfair disadvantage. (See: How to blame others for your non-creativity, for context). 

(Source: Giphy) 

Meaning if this decision goes through, it will go down as one of the most expensive slap on the wrists in history, with second place going to Credit Suisse’s $5.3 billion fine for selling off its toxic assets during the ‘08 crisis. Which is far worse if I do say so myself… 

(Source: X) 

Which is why Meta isn’t taking this lightly. They’ve been quick to dismiss the claims as baseless. "The claims made by the European Commission are without foundation," says Meta’s spokesperson Matt Pollard. They even tried to pull a Wall Street fast one and settle the investigation by limiting their use of competitors' data for Facebook Marketplace, but the EU wasn’t having it. Translation: Meta offered an olive branch, but the EU wanted the whole tree. Interestingly, the UK accepted a similar offer. Because, why not? 

(Source: Reuters) 

But, but, but… 

Just when you thought Meta had enough on its plate with this EU fiasco, the EU’s privacy watchdog has dug the knife deeper in the wound as they’re asking Meta to pause the training of its AI models on European data. 

(Source: Hacker News) 

I mean one would think AI would learn enough from our American nonsense but still, Rob Sherman, Meta’s deputy privacy officer, warns that this could leave Europe out in the cold when it comes to cutting-edge AI tech. 

With that said though, Meta isn’t alone in this regulatory maze. Apple recently decided not to launch certain AI features in the EU due to similar concerns, and Google is facing its own set of antitrust struggles. But the EU’s new AI Act, one of the strictest in the world, aims to protect user data and curb anti-competitive practices at all costs. 

(Source: Reuters) 

And when it comes to Meta’s main gripe? They can’t use public posts on Facebook and Instagram—both boasting a combined user base of five billion—to train their AI. In addition to this, Brazil has taken a similar stance, which Meta wasn’t afraid to call out as a “step backwards for innovation.”

(Source: Giphy) 

Obviously, this all comes to a head as Meta has been developing Llama, an open-source large language model, to compete with the likes of OpenAI’s GPT and Google’s Gemini. The plan was to roll out a multimodal Llama model that can handle text, video, audio, and images. But thanks to the EU’s unpredictable regulatory environment, Europe might miss out on these advancements. Think, Europe being the kid stuck with a VHS player in a Netflix world… at their own doing. 

(Source: Hit Network) 

This of course, leaves Meta and its investors in a world of uncertainty. With Meta facing a potential fine the magnitude of $13.4 billion, not only will this stifle their AI advancements in Europe, but the broader implications could set a precedent for how other tech giants are treated globally. See: If you can dance with one, you can twirl with two. 

(Source: DW) 

In the meantime, the tech industry is watching very, very closely on this, and you can bet Google and Apple’s overpriced lawyers are taking notes on this as well. As for investors, there’s no denying that whatever happens, the stock will be impacted. 

At the time of this writing, Meta is sitting -0.81% on the day… 

But as the ruling finalizes, one thing is for certain: The stock can either go up… or it can go down. (That’s a joke btw) 

Stocks.News holds positions in Meta, Google, Apple, and Netflix as mentioned in the article.