Meta Platforms (NASDAQ:META) shares tumbled by over 1% today after the social media giant offered to slash the subscription fees for Facebook and Instagram in Europe by nearly half. The move is aimed at diminishing privacy and antitrust concerns in the region.
It started off with Meta introducing ad-free subscriptions for Facebook and Instagram in Europe in November. However, critics termed the fees as a charge on users to ensure their privacy, according to Reuters. If users choose not to pay a subscription fee then Meta can collect their data for targeted advertising. The company’s free service is powered by revenue from advertisers.
Meta maintains that the subscription service is aimed at complying with European Union norms and provides users with a choice. However, critics worry that other companies may choose to follow Meta’s actions. The pay-or-consent-to-data-collection model may not remain limited to social media platforms and can potentially be adopted by other industries as well. Now, Meta is open to slashing fees to accelerate the adoption of its ad-free feature and reach a new normal between its paying and non-paying user numbers.
Increasing Regulatory Headwinds
Meta’s regulatory challenges span across multiple markets. In Turkey, the company is facing a probe over the potential abuse of its dominant market position. In the U.S., it is being investigated by Federal authorities over its potential involvement in the illegal drug trade.
Upcoming Global Elections
Furthermore upcoming elections in major global economies are expected to keep Meta in the spotlight. In India, Meta is expanding its network of its third-party fact-checkers and is setting up an Indian Elections Operations Centre. The country goes to the polls in the coming weeks.
What Is the Price Target for Meta Stock?
Shares of the company have rallied by nearly 151% over the past year. Wall Street has a Strong Buy consensus rating on Meta alongside an average META price target of $528.80. This points to potentially limited upside momentum in the stock over the next 12 months.
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