StockTok: Meta fined in India and Europe for antitrust violations

Welcome to “StockTok,” The Fly’s weekly recap of Wall Street’s reactions to social media stock news.

BUSINESS AI HIRE: Clara Shih, the former CEO of Salesforce (CRM) AI, announced that she will be leading a new Business AI group at Meta (META)… Earlier on Tuesday, she posted, in part, on X: “I’m thrilled to share today that I’ve joined @Meta to lead a new Business AI group. Our vision for this new product group is to make cutting-edge AI accessible to every business, empowering all to find success and own their future in the AI era. 200M businesses each month turn to @facebook @instagram @WhatsApp to connect with billions of consumers around the world. Meta’s Llama models have over 600M downloads to date, and Meta AI now has more than 500M monthly actives- not to mention the incredible ways we’ll bring these AI advancements into the physical world through AR glasses and VR headsets. Meta’s global reach and leadership in AI represent a generational opportunity for businesses, and I couldn’t be more excited and grateful to help take this from zero to one to scale.” Jefferies is “bullish” on the hiring and formation of a new Business AI group, viewing it as “a big step forward” in Meta’s push to monetize its AI with businesses and enterprises. The firm, which thinks Clara’s experience at CRM building Agentforce will be advantageous in Meta’s efforts to build Gen AI tools and agents for the more than 200M businesses that leverage WhatsApp, Instagram and Facebook each month, reiterated a Buy rating and $675 price target on Meta, which it calls a “Top AI winner.”

QUEST 3 COMPATIBLE: At Microsoft Ignite, Microsoft (MSFT) announced that it is extending Windows 11 availability to mixed reality devices. Windows in mixed reality brings the full capabilities of Windows 11 to mixed reality headsets, starting with Meta Quest 3 and Quest 3S. This will be available in public preview by the end of the year, Microsoft said.

FEED REFRESH: Meta’s Instagram says it is testing a way for people to reset the content recommendations they see in Explore, Reels and Feed when they want a fresh start. This feature builds on tools it already offers that let people curate what they see in their recommendations. “We want to make sure everyone on Instagram – especially teens – has safe, positive, age-appropriate experiences and feels the time they’re spending on Instagram is valuable. In addition to providing built-in protections from sensitive content with Teen Accounts, we want to give teens new ways to shape their Instagram experience, so it can continue to reflect their passions and interests as they evolve.” Instagram said it recognizes that parents “are concerned that their teens might see mature or inappropriate content online, which is why we have stricter rules around the kinds of content teens can see on our apps. In addition to removing content completely when it breaks our rules, we take steps to help prevent teens from seeing content that may be sensitive or mature. We avoid recommending it, and in some cases we hide it from teens altogether, even if it’s shared by someone they follow.”

M&A RUMORS: Trump Media and Technology Group (DJT), is in advanced talks to buy Bakkt (BKKT), a cryptocurrency trading venue owned by IntercontinentalExchange (ICE), two people with knowledge of the talks told Financial Times’ Philip Stafford. Trump Media, which operates Truth Social, is closing in on an all-share purchase of Bakkt, the report said, citing sources. The valuation under discussion was not immediately clear but Bakkt’s market capitalization stood at just over $150M on Monday, FT added. Shares of Bakkt exploded up 162% following the report on Monday.

MARKET DOMINANCE FINE: In a press release, the Competition Commission of India said, “The Competition Commission of India imposed a penalty of Rs. 213.14 crore on Meta for abusing its dominant position. This relates to how WhatsApp’s 2021 Privacy Policy was implemented and how user data was collected and shared with other Meta companies. The Commission also issued cease-and-desist directions and also directed Meta and WhatsApp to implement certain behavioral remedies within a defined timeline. In this matter, the Commission delineated two relevant markets i.e., the market for OTT messaging apps through smartphones in India; and the market for online display advertising in India. Further, Meta Group operating through WhatsApp was found to be dominant in the market for OTT messaging apps through smartphones in India. Furthermore, it was also found that Meta holds a leading position compared to its competitors in the online display advertising in India. Starting from January 2021, WhatsApp notified users about updates to its terms of service and privacy policies. The in-app notification stated that, effective 08.02.2021, users were required to accept these terms, including expanded scope of data collection as well as mandatory data sharing with Meta companies, to continue using WhatsApp. Under the previous privacy policy dated 25.08.2016, WhatsApp users were given the option to decide whether they wanted to share their data with Facebook. However, with the latest policy update in 2021, WhatsApp made data sharing with Meta mandatory for all users, removing the earlier option to opt out. As a result, users had to accept the new terms, which include data sharing with Meta, in order to continue using the platform. The Commission has concluded that the 2021 policy update by WhatsApp on a ‘take-it-or-leave-it’ basis constitutes an imposition of unfair condition under the Act, as it compels all users to accept expanded data collection terms and sharing of data within Meta Group without any opt out. Given the network effects and lack of effective alternatives, the 2021 Update forces users to comply, undermining their autonomy, and constitutes an abuse of Meta’s dominant position. Accordingly, the Commission finds that Metahas contravened Section 4(2)(a)(i) of the Act.”

AI CUSTOMERS: Some of Microsoft’s top customers of its Azure OpenAI offering include Adobe (ADBE) and Meta, both of whom spent over $1M on the AI services in September alone to make the top 10 customer list, The Verge’s Tom Warren reported. Both Adobe and Meta are mainly using Microsoft’s provisioned output for access to OpenAI models, which allows for dedicated model processing capacity instead of token-based offerings for text and image generation, the author noted.

VIEWS: Meta Platforms’ Facebook said Thursday that creators will now have a single distribution metric for all content types that’s calculated the same way across Facebook and Instagram. The new metric – called Views – tells you the number of times a reel or video was played or the number of times photo or text posts were on screen, and aligns with Instagram’s recently updated metrics. Views streamlines the various unique content distribution metrics into one, helping you understand how well your content is resonating regardless of format or Meta platform, the company said. Views also capture when people look at your content multiple times, telling you more about how interesting or entertaining it is. “On reels and videos, Plays will now be called Views,” the company said. “How Views are calculated will not change, so you should not see any meaningful changes to this metric other than the new name. As part of this update, we’re removing the separate replays metric. For Stories, photo or text posts, Views will replace Impressions. For these non-video formats, Views are calculated as the number of times they appear on a person’s screen, including repeat views. So for example, a person viewing a photo three separate times in the same day would count as three Views for that photo instead of one Impression. This means you may notice your Views are higher than your previous impression counts. In addition to the new Views metric, we’re updating our video metrics. Minutes Viewed and Average Minutes Viewed will replace Watch Time and Average Watch Time. Watch Time is the total amount of time the reel or video was played, including any time spent replaying the reel or video. It captures how long people watch down to the second, whereas Minutes Viewed rounded to the closest minute. Other metrics like Reach, 3-second views, 1-minute views, Reactions, Comments and Shares will remain unchanged. You can expect to see all these changes within Insights in Meta Business Suite and Professional Dashboard over the next few weeks. Views will be additionally available across all ads measurement surfaces for all ad formats.”

THREADS LATEST: In a post on Thursday, Instagram and Threads boss Adam Mosseri said that Threads had “more than 15M signups in November alone” and it is “going on three months with more than a million signups a day.” Mosseri added: “Know we have a lot more work to do, and our teams are working hard to get this community what they need. Appreciate you all.”

FAMILY CENTER LOCATION SHARING: Snap (SNAP) announced new location sharing features coming to Family Center, Snapchat’s in-app hub where it offers parental tools and resources. “Snapchat is already home to one of the most popular maps on mobile,” the company said. “More than 350M people use our Snap Map every month to share their location with their friends and family to help stay safe while out and about, to find great places to visit nearby, and to learn about the world through Snaps from around the globe. Soon, new Snap Map location sharing features in Family Center will make it easier than ever for families to stay connected while out and about.”

ANTITRUST FINE: The European Commission has fined Meta EUR 797.72M for breaching EU antitrust rules by tying its online classified ads service Facebook Marketplace to its personal social network Facebook and by imposing unfair trading conditions on other online classified ads service providers. The Commission’s investigation found that Meta is dominant in the market for personal social networks, which is at least European Economic Area wide, as well as in the national markets for online display advertising on social media. The Commission has ordered Meta to bring the conduct effectively to an end, and to refrain from repeating the infringement or from adopting practices with an equivalent object or effect in the future. Margrethe Vestager, EVP in charge of competition policy, said: “Today we fine Meta EUR 797.72M for abusing its dominant positions in the markets for personal social network services and for online display advertising on social media platforms. Meta tied its online classified ads service Facebook Marketplace to its personal social network Facebook and imposed unfair trading conditions on other online classified ads service providers. It did so to benefit its own service Facebook Marketplace, thereby giving it advantages that other online classified ads service providers could not match. This is illegal under EU antitrust rules. Meta must now stop this behavior.”

ALL STREAMS GO: Trump Media reported that it has completed the initial deployment of its cross-country network of data centers that power its custom-built content delivery network DC, and all planned data centers are now fully operational. “This is a big achievement in the continuing rollout of our TV streaming platform,” said TMTG CEO Devin Nunes. “We’ve optimized our CDN to operate fast, reliably, and with tremendous capacity, and the results are outstanding. As TMTG maintains nearly $700 million in cash and no debt, we’re turning Truth+ into a vital part of our effort to create an uncancellable free-speech beachhead for news, discussion, and entertainment.”

ADDITIONAL ANALYST COMMENTARY: Scotiabank initiated coverage of Sprout Social with a Sector Perform rating and $28 price target. The firm said that after a “choppy year” for the software sector followed by a strong three months, there is opportunity to generate alpha by continuing to own “clear market winners” as well as companies with re-rate potential on the benefits or artificial intelligence. Stock picking “has become more crucial than ever” with the bulk of investor interest being in semiconductors to questions on why certain software businesses should still exist beyond five years, the analyst told investors in a research note.

Piper Sandler raised the firm’s price target on Reddit (RDDT) to $150 from $115 and maintained an Overweight rating on the shares. The firm reported its October ad metrics indicate Google (GOOGL) is starting to monetize searches with “Reddit” in the title by posting paid links and products ads above organic results. The firm’s data has not seen an impact to Reddit users or pricing based on these changes. While debate remains on the sustainability of user growth, the ad data gives Piper more confidence in the organic top of funnel for Reddit growth, the analyst tells investors in a research note. Piper increased Reddit’s fiscal 2025 revenue and EBITDA estimates by 5% and 15%, respectively. It sees the company achieving a more robust monetization opportunity with average revenue per user growth of 9% achievable in 2025 and 2026, versus 7% previously.