Meta Platforms Inc. (META: NSD) is back in the FTC’s crosshairs after a U.S. court shot down its attempt to block a probe into alleged privacy violations by Facebook, its social media subsidiary. This latest development adds to the company’s growing list of regulatory headaches.
Court Rejects Meta’s Bid to Halt Investigation:
The FTC alleges Meta misled parents about their control over children’s activities within the Messenger Kids app. The investigation stems from accusations levied in May 2023. Meta responded by suing the FTC in November 2023 to prevent them from revisiting a prior agreement on the matter. The recent court ruling paves the way for the FTC to proceed with its investigation.
Potential Impact on Meta’s Business and Stock:
Investors are likely to react negatively to this news, with potential for a stock price dip. The investigation’s outcome could force Meta to alter its data collection practices or limit functionalities within the Messenger Kids app, potentially impacting user engagement and future revenue streams.
Conclusion:
This case highlights the increasingly stringent regulatory environment surrounding data privacy in the tech industry. Meta isn’t alone; other major tech companies are facing similar scrutiny from regulators worldwide. The FTC’s investigation could set a precedent for future data privacy enforcement actions.
