The European Commission said on Friday that it has preliminarily found TikTok and Meta (META) in violation of the EU’s Digital Services Act (DSA), which is meant to regulate big tech companies. Specifically, both social media companies are accused of failing to provide researchers with proper access to public data on their platforms, as required under the DSA. On top of that, Meta is also being called out for not making it easy for users on Facebook and Instagram to report illegal content or appeal decisions when their posts are taken down.
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Meta responded by denying any wrongdoing, saying that it disagrees with the Commission’s interpretation of the DSA. In fact, the company emphasized that it has updated its reporting tools, appeals process, and data access options since the DSA came into effect, and claims that these updates meet EU requirements. TikTok also defended itself by saying that it values transparency and has allowed nearly 1,000 research teams to access its platform data.
However, the company warned that making data more accessible could clash with Europe’s strict privacy rules (GDPR), and asked regulators to explain how to balance both laws. It is worth noting that the EU believes researchers need access to social media data in order to study potential mental and physical health risks. But the Commission said that Facebook, Instagram, and TikTok have made it too difficult for researchers to get reliable data, often leaving them with incomplete information. If the companies are officially found to be in breach, they could face major fines of up to 6% of their total global revenue.
Is Meta a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on META stock based on 40 Buys, six Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average META price target of $877.57 per share implies 19.6% upside potential.
