Meta Shares Look Set To Take Out $500 But Facing EU Backlash Over AI Data Practices

Coming off the back of a very strong day for Meta stock (NASDAQ: META), adding 3.79% on the day, comes further scrutiny from Europe. Shareholders will be hoping that this does not derail the momentum that has seen the stock add 42.96% in 2024 so far. Since bouncing off of support at the end of April around $430, the ascent has been steady, closing out most recently at $495.

Meta Platforms Inc. , the tech giant behind Facebook, is currently in the spotlight as it faces a series of complaints within the European Union regarding its plans to use personal data to train artificial intelligence (AI) models.

The series of 11 formal complaints have been issued by none other than NOYB, a European privacy advocacy group. This non-profit organisation is requesting that national privacy regulators take immediate action to forestall Meta's use of personal data without explicit user consent—a move that could be in breach of the EU's stringent privacy regulations.

The contention lies within Meta's proposed changes slated to commence from June 26. These changes would permit the company to utilise various forms of personal data, including private posts, images, and online tracking information for the purpose of enhancing its AI technology. Such a move has raised considerable concerns about the sanctity of user privacy within the European Union, a region with some of the world's strictest data protection laws.

Adding to the uproar is the EU Parliament's recent endorsement of a comprehensive regulatory framework for AI. This marks a groundbreaking development as it positions Europe as a front-runner in the establishment of global standards for AI. These regulations underscore the importance of ethical considerations and user privacy when developing and deploying AI technologies. Meta's intentions, as they stand with the current privacy complaints, could be seen as a direct challenge to this newly minted regulatory stance.

The scrutiny isn't only about the proposed AI data use; it also encompasses Meta's broader privacy practices. The EU has expressed concerns regarding potential violations of content regulations pertaining to child safety, spotlighting another dimension of the tech giant's privacy issues.

The challenges for Meta aren't confined to European borders either. The company is concurrently facing legal headwinds in the United States, where the Federal Trade Commission (FTC) has accused it of concealing critical information during examinations of its acquisitions of Instagram and WhatsApp. The regulator is actively pursuing a lawsuit aimed at disbanding Meta's alleged monopoly, which adds another layer of complexity to the company's legal predicaments.

Meta Platforms Inc. is presently navigating a tempestuous period marked by regulatory scrutiny on multiple fronts. With the convergence of EU privacy complaints, potential infringements of AI regulations, and ongoing probes into past acquisitions, the company's strategies related to user privacy and data utilisation are under intense examination. How Meta responds to these allegations and adjusts its practices could set significant precedents for the future of AI and privacy in the digital age.