Meta stock dips after allegedly breaching EU antitrust rules

Shares of Meta (META) are dipping after European Union regulators issued a preliminary finding accusing the company of violating the Digital Markets Act. The antitrust issue in question is the company's recently introduced ad-supported social networking service.

Yahoo Finance Reporter Dan Howley joins Catalysts to analyze the European regulatory agency's preliminary finding and what it means for Meta moving forward.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Nicholas Jacobino

Video transcript

Stock is under pressure this morning down over 2% of around 2% in the free market after the market open here, the company accused by Eu regulators of failing to comply with landmark anti trust rules over its recently introduced a supported social networking service.

Yahoo finances Dan, how he has the details for us?

That's right man.

This is uh a preliminary finding.

So it doesn't necessarily mean anything is going to happen to meta at this point.

But essentially what the European Commission is saying is that uh meta is in violation of the Digital Markets Act, which is basically that massive uh law in the EU that is supposed to kind of put the the rain on some of these big tech companies, whether it's Apple Microsoft or in this case meta.

Now what the EU Commission excuse me is saying uh is that uh meta is violating the D MA by not abiding by a particular guideline.

And in in reality, what what they're saying is that meta is offering two different versions of its products, Facebook and Instagram, uh with two different uh kind of uh rules that users have to follow either you can get meta uh uh excuse me, Facebook or Instagram for free.

Uh and allow meta to hoover up your data.

Uh That's the kind of ad free uh the ad version or you can get an ad free version, but you have to pay for it.

Now, the European Commission says that's not the same product.

Essentially.

They're saying everybody has to offer a similar product.

Uh If users don't want to have their data covered up, uh in this case, meta says, well, look, we're offering a similar product, you just have to pay for it.

And the European Commission says, no, that's completely different.

Users shouldn't have to pay for it.

They're also talking about uh users uh having their right to freely consent to having their data used.

And so this is a big deal for meta because they thought that they were going to be abiding by the new uh D MA rulings.

Uh Clearly the EC doesn't believe that.

And so they could be on the hook for up to 10% uh of their global revenue.

Now, that would be uh billions of dollars in fines, they have to pay more.

So if the European Commission finds that they're repeat offenders, and it's not just meta that, that the European Commission is going after, they're also going after Microsoft saying that they uh package their team software and gives them an unfair advantage and Apple over its app store practices.

And so you know, this is just another example of the, the European Commission kind of bringing the hammer down on these big tech companies.

And it's similar to, to what's happening in the US to a degree with antitrust.

But obviously, the the European Commission making faster moves and more moves.